All things being equal, if you have a good direct mail business, you have a better chance for success in retail. In fact, things don’t have to be very equal!
- Why is this mail order/retail relationship so important?
- Common inventory. Before you even start expanding into the other marketing channel, you have the opportunity of having one inventory base. This alone can save you thousands of dollars.
- Advance knowledge of what sells. Through either channel you’ve been exposed to what customers want. This knowledge is invaluable because the customers aren’t changing-just the way in which you reach them is changing.
- Advance knowledge of vendors. Who sells what, volume discounts from the other channels, and special relationships for faster delivery are all a help. Just finding out where to buy something you wish to sell is often far more difficult than one would think. These advantages become even more important when imported merchandise is considered.
- Proven advertising techniques. When you’ve sold through one channel, you have to learn what advertising communication is most effective, which products or services are best helped with advertising, and which media are most effective. Marketers spend years trying to figure out what you already know.
- Advertising of one channel helps the others. No matter which channel you started with, you will have some sort of name and reputation. These will precede you because you will be going to the same segment of the audience. Taking advantage of this reputation can mean the difference between success or failure for either or both of the ventures.
- Catalog remnants can be sold in stores. Without a store, there is nothing worse than having just a few of something left. Too many to discard. Too few to offer in the wide distribution of your catalog. Just the right amount for retail.
- A way to get business from out-of-town customers. At retail you have both out-of-town customers and people who have moved away. You’ve built a reputation with them. Mail order provides a method to continue to obtain profitable business from them.
- Your catalog is charged on an incremental basis. If you are already in mail order, your catalog will be your main form of advertising. If you then open a store, you concentrate more catalogs into that area. You should only have to charge the incremental print run cost, postage, and lists against those catalogs. This should give you an advertising efficiency advantage over non-mail order retailers.
- Offering your customers an alternate shopping method will get you business that would have gone elsewhere. Your regular retailer may be confined, too busy to shop, or living for six months somewhere else. Your mail order customer may prefer to see-feel-touch on certain items, or may need a further explanation of the product.
- Retail site selection. Your pattern or density of mail order customers tells you where to put stores. This rather easy research is best done by comparison. Take your list and the subscription list of the publication that best represents your market. Compare these two on a zip code by zip code basis.
You need to know the universe or population you mailed to, to determine the percentage of penetration you would expect. Where you have the best penetration, and the market is large enough, will be the places you have the best chance.
Most of the people who are doing well in retail or mail order have expanded into the other channel. Most result in success stories.
Why do you need to think of both channels when starting? It might be best for you to do both at the same time. There are so many common aspects, as we have discussed previously, that it doesn’t take double the effort. This also gives you the chance to consider buying a mail order company and expanding it into retail, or taking on a retail operation and expanding it into mail order. You are also reminded that if your idea for mail order can’t be translated to retail, you reduce your chance for success. This does not necessarily hold true if you are in retail or are considering expanding into mail order.