1. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITAL
2011 ANNUAL MULTICHANNEL
TREND REPORT: PART II
Executive Summary
(Direct-To-Consumer, Publishing, Not-For-Profit)
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2. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITAL
DIRECT TO CONSUMER, PUBLISHING AND NOT-FOR-PROFIT:
LARGER MORE FREQUENT ORDERS PREVAILED
The heavy recession plaguing consumers and marketers during 2008 and 2009 loosened its grip
as consumers increased purchases but with temperance. Consumer interest varied significantly
during 2010 as more households tended to participate in non-Publishing offers but in general,
households purchased more frequently with larger value orders.
GROWERS BY OFFER TYPE
The Continuity market saw an 8% increase in sales due primarily to a strong 26% lift in
transactions per household, despite 17% decrease in average order value. Sales for Sweepstakes
offers grew 9%, also aided by a 22% increase in transactions per household although coping with
a 11% reduction in average order value compared to
2009. Health/Non Pharmaceutical sales were up 11%, % Change in Sales from 2009 to 2010
primarily from a 9% increase in average order value Solo Offers -6%
and despite a marginal 1% decrease Continuity Offers 8%
in transactions per household. Not-For-Profit was up
Sweepstakes Offers 9%
for all three offer types â Societal Benefit, Environ-
Health/Non Pharmaceutical Offers 11%
mental, and Medical offers â experiencing growth,
primarily driven by more gifts per donor, as donors Publishing
overall declined. For Publishing, only the studied Books - Health/Diet 43%
categories of Books â Health/Diet, Newsletters â Books - Health Offers -26%
Business and Financial, and Magazines â Hobby, were Books - Cooking Offers -9%
up (43%, 21% and 4%, respectively). Books - Hobby -9%
Books - General -16%
DECLINERS BY OFFER TYPE
Magazines - Hobby 4%
The Solo market saw a 6% decrease in sales, primarily Magazines - Home -23%
due to a 7% reduction in average order value. Most Magazines - Menâs Offers -31%
Publication category sales, were down compared to
Magazines - Childrenâs -36%
2009, with Books â Health down 26%, influenced by
Magazines - Womenâs -41%
fewer subscribers (28%), Magazines â Childrenâs down
36% due heavily to Magazines/Newsletters - General 13%
26% fewer subscribers and fewer subscriptions per Magazines/Newsletters -
21%
subscriber, and Magazines â Women declined 49% Business and Financial Offers
due to a 37% reduction in subscribers. Newsletters - Health -9%
Not-For-Profit
ANNUAL SHARE OF WALLET SPENDING Environmental Offers 13%
TRENDS Societal Benefit Offers 51%
Annual share of wallet of consumers was Medical Offers 2%
calculated by looking at the total dollar amount of
purchases from 2009 to 2010 captured across all Aba-
cus Cooperative member companies and then looking at the percentage breakdown of purchases
within various purchasing categories.
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3. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITAL
DIRECT-TO-CONSUMER
Visible in the Annual Wallet Share Spending Trends table, Solo buyers spent 13% of their wallet,
or $703MM, on Solo offers. Continuity buyers spent 10% of their wallet, or $265MM, on
continuity offers and Sweepstakes buyers spent the greatest amount on sweepstakes offers
with 16% of their annual wallet share or $701MM. Health/Non-Pharmaceutical Offers
captured the highest share of wallet at 18% of their buyersâ annual wallet spend, or $1.1B.
PUBLISHING
For Publishing subscribers, annual wallet spend was generally in the 2%-5% range with a few
exceptions: The Newsletters â Business and Financial offers had the highest share at 12%, or $84MM,
Books â Health Offers were 7% and $17MM. The Magazine groups of Hobby offers, Womenâs offers,
and Home offers had the lowest share of wallet, with each claiming a 2% share and $29MM, $26MM
and $20MM, respectively.
NOT-FOR-PROFIT
In the Not-For-Profit sector we analyzed three key categories including Environmental Offers,
Medical Offers, and Societal Benefits Offers. The trends of donors across these categories were
generally strong and include an 11% share of wallet, or $272MM, for Environmental Offers. Medical
offers received 9% of their donorsâ annual wallet share, or $324MM, and 13%, or $276MM, for Societal
Benefit Offers.
KEY CONSIDERATIONS FOR TODAYâS MARKETERS
In addition to the key considerations given in prior Trend Reports,, including the importance of
implementing strategic share gain strategies and leveraging the power of a marketing database
to gain a 360o view of customers, key considerations in this yearâs report focus on strategies that
enhance the customer experience and build long-term loyalty, exploit all media options, utilize
data to more effectively cultivate the housefile or improve the use of complementary marketing
efforts, and leveraging full-service marketing solutions providers.
FOCUS ON THE CUSTOMER EXPERIENCE â More has changed in marketing in the past five
years than over the past 50 years. Consumers are more empowered and in control of the marketing
experience than ever before. The Internet and social media have resulted in a proliferation of
channels, and consumers have less time to shop and buy. Marketers need to develop an approach
to deliver relevant interactions that anticipate and respond to the many ways consumers want to
engage with, shop, and buy from brands. This requires that marketers have the ability to leverage
data and technology to engage with customers in 1:1 conversations across all channels in real-time.
Using a data-driven approach, dramatic results occur when marketers create customer experiences,
fueled by relevance and drawn from customer intelligence.
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4. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITAL
EXPLOIT MEDIA OPTIONS â While seeking to acquire customers, Direct Mail still
delivers results. In a pure channel comparison, it produces higher sales per household than
Online. Understand which prospects and customers have a preference for engaging with your
brand Online and through email to strengthen the marketing mix and append existing housefile
records with a complete set of targeting data. With advanced solutions now available, tailoring
banner ad placement to deliver your messages to the audience most likely to respond further
improves visibility and effectiveness.
CULTIVATE HOUSEFILES â Marketers made strong efforts to build housefiles through
effective prospecting but cutbacks over the past few years still demand attention. Appending
existing customer data records with new insights will help make the most of customer marketing
efforts, especially in the new era of 1:1 marketing.
MAXIMIZE PROFITABILITY â While rising costs are impacting marketers in many direct and
indirect ways, from postage to raw materials, and distribution, marketers must continue to focus
on reducing costs while still achieving top line revenue targets. Thorough understanding of
which targets and segments are reducing their purchases will also help deliver stronger returns
on investment. Identifying the near-term value of targets will also enable marketers to bring
the most cost-effective customers into the housefile. More marketers are consolidating the
bulk of their needs with a single provider enabling processing time to be reduced, faster speed
to market, attaining efficiencies of scale and bundled pricing to improve total ROI, and relief for
overloaded staff. Best-in-class marketing service providers are able to provide a full toolbox of
necessary services and solutions direct marketers need such as large and growing universes of
prospect names, housefile modeling, hygiene for both mail and email files, plus insightful and
in-depth analytics.
Each year our industry continues to change and evolve to new market forces and emerging
trends. The 2011 Abacus Trend Report seeks to quantify the trends that are shaping the
marketing environment and provide a tool that enhances the strategic decision-making
capabilities of marketers. Through our end-to-end suite of offerings, Epsilon Targeting is
committed to helping organizations reach their marketing and business goals by overcoming
the challenges of our dynamic business environment, improving top-line performance, and
identifying areas to reduce processing and mailing costs.
UTILIZE EPSILONâS ADDITIONAL RESEARCH - In an effort to help marketers leverage
the power of customer insight to build relationships, drive results, and boost ROI, Epsilon
conducts several thought leadership projects in addition to the Abacus Trend Report. The
trend summaries, research, whitepapers, and industry best practices cover the most pressing
topics facing marketers today, as well as the emerging challenges in our dynamic industry.
For more information please visit www.epsilon.com.
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5. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITAL
ABOUT THE TREND REPORT
DATA SOURCES
Two main data sources were used to compile the Abacus Cooperative 2011 Trend Report. These
sources leverage the combined technology and data assets of Abacus and comprise a wealth of
transactional data unmatched in the direct marketing industry.
ABACUS COOPERATIVE
The data housed in the Abacus Cooperative database does not include all direct transactions
conducted in the U.S., but does provide a representative view of multichannel industries.
The report analyzes 626 multichannel offers with activity across channels.
For this Trend Report, analysis was also conducted on a subset of the Abacus Cooperative
members consisting of multichannel merchants, which we refer to as the âMultichannel
Benchmark Group.â Each of the merchants in this group separates its call center and web data.
This provides a stable group of merchants for analysis over time which isolates channel shifts
and differences in seasonal purchasing patterns by channel.
ABACUS CHANNELVIEWÂŽ DATA
For an analysis of in-the-mail circulation trends, we have identified a separate comparative group
of 39 Consumer multichannel merchants from Abacus ChannelView with full activity from
January 1, 2009, through March 31, 2011.
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