Online businesses turn to old-school offline marketing

News of Amazon​.com's plans to publish a holiday toy catalog came as no surprise to entrepreneur Michael McCarthy.

When Amazon's toy catalog popped up in a conversation recently, he smiled, reached into a bag and produced an Amazon Restaurants direct-mail pitch sent to a friend in Minneapolis. He was confident that just seeing "Amazon" in the return address of a direct-mail piece would seem like news.

He was right.

As it turns out, though, maybe it shouldn't have been surprising that the world's leading e-commerce company plans to distribute paper catalogs and is going after new customers with direct mail.

What e-commerce companies are demonstrating is that the marketing tactics of e-commerce need not be electronic. They just need to be effective.

"Amazon gets it, that these offline channels work," said McCarthy, CEO of Minneapolis-based marketing technology firm Inkit. "A lot of these big companies still are trying to go digital so much they've put blinders on. Guarantee you some companies in town would be shocked to learn that Amazon is going to direct mail big time."

McCarthy is careful to describe the business he and co-founder Abram Isola entered as direct-mail technology. Inkit is still in the startup phase, only launching its product last summer and with fewer than a dozen staffers. Yet they are clearly on to something.

In visiting New York City, McCarthy had puzzled over the billboards and subway ads for young companies such as Casper, one of the handful of leading bed-in-a-box e-commerce retailers. Why are venture-capital-funded startups putting up subway ads to run alongside those of a bail-bond shop?

Anybody with a mailbox probably realizes that direct-mail advertising hasn't exactly disappeared as digital advertising flourished. Response rates for direct mail have generally declined in the recent past, but gently.

What McCarthy is talking about, though, is a smarter version of direct mail. It need not be the same postcard mailed around the neighborhood. It can easily be personal.

Retailers and consumer-services providers have all the data they need to create very personal messages to send through the mail. The bigger challenge was connecting to companies to print and mail them.

That's the problem Inkit solves, and that's why it pitches itself as a software company. It owns no printing equipment.

A good example might be what to do about a problem called cart abandonment, when a customer stops the online shopping process short of pressing "buy," leaving a couple of things in the shopping cart.

The e-commerce company knows that has just happened, or at least one of its machines does if an employee does not. The retailer knows how many pages were clicked through before the clicking stopped. And it knows what the customer previously bought.

So how about a personally addressed postcard, arriving within days, with a special offer for an item left in the shopping cart?

Reading something that personal from a retailer might seem a little creepy. Yet thanks to our experience with Amazon, Netflix and other companies that make personal offers and recommendations, consumers have grown to expect retailers to know all about their habits and tastes.

That kind of capability for direct mail was one thing senior marketer manager Mike Black, of Minneapolis-based restaurant takeout delivery company Bite Squad, found appealing in the approach of Inkit.

The whole process, Black said, could take six weeks or more, from lining up the printer and other vendors to figuring out where the mailing should go. The project chewed up a lot of time of employees, too.

And it just wasn't efficient enough. That led Bite Squad to lean more on digital tools in its marketing, including customer e-mail. The approach that evolved out of meeting with Inkit was to start using direct mail much like it used e-mail.

"By integrating [Inkit's direct mail] with our e-mail platform, we are able to leverage the same creative, and we have a trigger that fires when a customer has reached a certain order threshold," Black said. "We send them a customized piece that says thanks for being a loyal Bite Squad customer. And it's all hands free."

The mail Inkit produces for Bite Squad arrives within a few days of the customer placing that last order, with a message Black described as "very specific."

Bite Squad hasn't completely abandoned broader approaches when entering a new market, Black said. But here again it's open to the old ways that still work, as Bite Squad has lately been testing billboards and commercial radio.