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The UK Direct Mail Catalogue Market What lessons can we learn?

The UK Direct Mail Catalogue Market What lessons can we learn?. Ray Morris-Hill Associates. Introduction. Direct Mail is the fastest growing segment of the UK catalogue market In the Middle to Upmarket sectors the market is developing similarly to the USA

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The UK Direct Mail Catalogue Market What lessons can we learn?

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  1. The UK Direct Mail Catalogue MarketWhat lessons can we learn? Ray Morris-Hill Associates

  2. Introduction • Direct Mail is the fastest growing segment of the UK catalogue market • In the Middle to Upmarket sectors the market is developing similarly to the USA • Close study of this development over the last 10 years produces key lessons for any Direct Mail catalogue Ray Morris-Hill Associates

  3. Key Lessons • Merchandise • Inventory Management • Creative Presentation • Circulation and Customer Recruitment • Fulfilment • Financial Ray Morris-Hill Associates

  4. The UK Home Shopping Market Sales £ million Sales Pta ‘000 million Growth % vs LY Total Retail £167,551 41,218 +4.4% Home Shopping £7,551 1,858 +3.4% of which: Agency Mail Order £4,048 996 +0.3% Direct Mail £1,515 373 +12.1% Other Home Shopping £1,988 489 +3.7% 1996 Data Source: Verdict Research Ray Morris-Hill Associates

  5. Home Shopping Share of Total Retail Home Shopping Sales Share of Retail £ million Pta 000 million (% vs LY) Clothing £3,492 859 (+6.3%) 12.8% Home £2,336 575 (+7.3%) 6.2% Other £1,723 424 (-6.5%) 1.7% Total £7,551 1858 (+3.4%) 4.5% 1996 Data Source: Verdict Research Ray Morris-Hill Associates

  6. 5 Big Companies dominate Big Books Agent Commission Middle to Lower Market “Free” Credit Offer Thousands of small young, companies Smaller Catalogues No Commissions More Upmarket Cash with Order or Charge for Credit Company Characteristics Agency Direct Mail Ray Morris-Hill Associates

  7. Merchandise • Determine the target customer and select merchandise to meet this customer’s requirements • Why would they buy this item, by mail order, from you? • Items not Ranges • Limited Merchandise offers lack credibility • Repeat winners Ray Morris-Hill Associates

  8. Inventory Management • Forecast stock to determine: - Re-orders of fast selling lines - Clearance of surplus merchandise • Back orders are necessary, but monitor, control and inform the customer • Price aggressively to clear slow moving lines • Use almost every opportunity to clear old stock • Do not get emotionally attached to stock! Ray Morris-Hill Associates

  9. Creative Presentation • Item must be shown well enough for the customer to determine if they want to buy it • Personality marks you out from the rest • Image may enhance personality but it is the product that sells • Repeat winners • Paper weight and quality • Do not give too much space to low price items Ray Morris-Hill Associates

  10. Circulation and Recruitment • Key code every segment of your mailing • Use RFM to segment your customer list • Re-mail your buyers • Use Mail Order Buyer lists • Repeat winners • Try all methods of recruitment - Lists, Ads, PR, Retail names, Friends … Ray Morris-Hill Associates

  11. Fulfilment • Decide on your Customer Service Policy and communicate to all staff • Make the Policy consistent with Personality • Use a tried and tested computer system • Keep your staff informed • Plan ahead for growth Ray Morris-Hill Associates

  12. Financial • Make a Plan • Start with enough Cash • Tight Cost control • Accurate, Timely and Relevant Reports are essential • Evaluate Profit or Loss of each activity * See also “Top Ten Tips for More Successful Catalogues” - Catalogue & Mail Order BusinessMay/June 1998 Ray Morris-Hill Associates

  13. Summary • Learn from everything you do • Repeat winners, drop losers • Plan activity • Tight financial control is essential to survival and success • An integrated business Ray Morris-Hill Associates

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