Fresh Data Blog
Fresh Data Archive
Case Study: Direct Mail Drives eCommerce Acquisition
Date: February, 2014 --
is not only the beginning of the New Year in China, it also sees the perennial
reappearance of the UK’s popular TFM&A exposition at Earl’s Court, which
Data Services always attends. As with China and elsewhere, ecommerce is seeing
dramatic growth in the UK. For example, in December online sales grew by over
19% year-on-year and accounted for 18.6% of all non-food retail sales, up from
16.5% in 2012.
to the British Retail Federation, the most successful merchants in this market
are those who have made their sites accessible to smartphones and tablets, keeping
with a trend we’ve also seen in China and the USA.
does this mean the humble letter or postcard has been left behind? Hardly. In
many respects, it’s becoming a driver of traffic, as demonstrated by the UK retail
is a huge retail chain of full-line and convenience grocery stores. It was
founded in London in 1869 by John James Sainsbury and his wife Mary Ann. It has
grown to become one of the UK’s largest retailers, selling general merchandise
and clothing in addition to its signature grocery business.
is huge, having 1,016 stores nearly equally divided between supermarkets and
convenience stores. It is (1) not afraid to use the data it has “to hand” as
one says in the UK; and, it is (2) not afraid to do things a bit “off center”,
like using postcards to drive traffic both to physical retail locations as well
as its online store.
with nearly every store in the UK trying to get customers on to their websites,
and with a new service to launch – online ordering of groceries - how is one to
stand out from the crowd? They are offering
a grocery shopping service, but how to get customers to experiment with it
online, especially given that other chains offer the identical service? This
was the challenge.
company decided to use direct mail to introduce and promote a new view of the
brand, a new emotional connection, and a new shopping service in their grocery
stores: ‘Try Something New Today’. In short, they wanted to beat the
competition by getting their customers to try the online shopping service with
Sainsbury’s before they tried another provider’s service.
all, how different can a company make the service of assembling a grocery
order? Getting prospects to shop with you first provides a huge advantage and
it’s quite likely that this advantage will carry through even in the face of
better offers made by competing stores! And
competition there is with the likes of Waitrose, Tesco, Iceland, Gregg, and
Where to Start
project was intensely data-driven, something famously mastered by the giant
competitor Tesco, whose use of data for prospecting and customer retention is
legendary. The starting point was the data generated by its customers’ use of
their “Nectar” cards.
is a loyalty program under which the customer’s purchases at participating
merchants earn points which can be redeemed, as with most loyalty programs. The
cards generate consumer data across every conceivable category of commerce:
groceries, clothing, dining, travel, sports, entertainment, pets, travel… even
charitable giving! In short, the data aggregator is not the credit card company
itself, but the “central” loyalty card company, whose card holders may be using
many different credit cards, where the consumer’s purchases would be generating
non-combinable loyalty points.
a wealth of consumer behavior data such a program generates, and what a
playground for the data analysis experts!
analyzing Nectar card data, the analysts built up a picture of the various
customers’ shopping habits – and used those to send out relevant and engaging
postcards. Each postcard reminded customers about the benefits of online
shopping. They also encouraged shoppers to ‘try something new’, offering new
recipes and suggestions on how to shop, as well as money-off coupons. In this
way, Sainsbury’s changed shopping from something boring and functional into
something of interest.
rates for some pieces were as high as 49.25% – more than four times response
targets, with a CPR of £1.66, and an average order value of £86.89. Ongoing
testing indicates that it works without incentives too – showing that it’s the
brand that counts rather than just money-off coupons.
goal is to drive customers in-store, online or both, Data Services has the
necessary data management and analytics technology and services to help your
organization achieve its goals!