Culture, Economics, Marketing

Along The Amazon: The Real Invasion

The Brown Marmorated Stink Bug: perennial invader.

For the two previous summers, our community has been infiltrated by legions of quietly intrusive stinkbugs.  They seemed to magically appear, just out of the corner of our eyes, posing on a wall or lampshade.  

Amazon Prime van passes the broken shell of a Macy’s store.

Little did we know that these were just the first wave, doing reconnaissance for the main invasion: Amazon. Now, virtually on every street, at every corner, we catch a glimpse of an Amazon delivery truck slipping in and out of view.

Amazon first broke into our consciousness in 1995 with a simple concept: a place to buy books online.  Their ads claimed access to all of the world’s contemporary literature available, and their warehouse was in outer space, “The World’s Biggest Bookstore”.  We might have listened.

Today Amazon is the world’s second largest company, by market capitalization, following Microsoft, and just ahead of Apple.  It has the world’s second largest retail sales volume, following Walmart.  

Barbarians at the gate: Amazon vans use shuttered Macy’s parking lot in Northbrook, IL.

It has up-ended the retail business model.  In 1997 3% of its sales were attributed to third party sellers.  Today, 58% of its sales come from third party.    In response, 2019 saw the closing of 9,300 big brand retail stores in the U.S.  The shift will continue.

The most physical sense of Amazon’s presence is its growing fleet of delivery vans.  In 2019, Fedex and UPS and the United States Postal Service delivered approximately 13.9 billion parcels in the United States.    But on its own, Amazon dropped 2.5 billion pieces at our doors.  According to Morgan Stanley, that will increase to 6.2 billion in the next 3 years.

The Amazon convoy. Dispatched regularly in 10-15 vehicle sorties on Butterfield Road.

I remark on these stats primarily because we watch the daily procession of Amazon trucks that travel Butterfield Highway, between Libertyville and Mundelein. The company has leased space to stage its fleet in an available lot on Technology Way on Libertyville’s west side.   There, independent owners and employees are regularly dispatched in squads of 10-15 vehicles at a time to head south to Allanson Road in Mundelein where they will pick up their allotted parcels for delivery.  The system is efficient, and it is supported by a good road, courtesy of Lake County.

Staging area in west Libertyville.

Just over the Illinois/Wisconsin Line, there is a vast Amazon distribution center off of US Route 94.  It measures several football fields in size, plus parking lot.  Not coincidentally, directly across the highway sits an equally large U-Line facility that makes shipping boxes. One wonders if there is a tunnel.  According to Amazon’s 2018 statements, the company has 230 million square feet of fulfillment space.  Its premises house nearly 650,000 employees.  One might also wonder how many of those people used to work for Sears, Macy’s, Pier One Imports, Abercrombie & Fitch, Office Depot, Victoria’s Secret, The Gap, and Payless Shoes.

This is not a critique of Amazon in any way.  The company’s mission statement is in part to serve a “customer-centric obsession”.  To that end, it has grown from simply books to sales of more than 100 million items.  Its website lists not a few business diversifications, but a vast portfolio of divisions relating to fashion, video streaming, groceries, pharmaceuticals, publishing, music, movies, web services, home automation and home security.

We can mourn the loss of the local store, but we have gravitated toward a business model that for much of our wants and needs, is just plain easy.

I wish I could feel as good about the stink bugs. 

 

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direct mail, Marketing

Victoria, Golf and Testing

Golf 2011-11-734

Every magazine’s sales tool: the “blow-in” card.

The beauty of direct mail is that you can test to find out what works.

So that is why Victoria’s Secret and Golf Magazine enjoy your attention today.

Victorias 2011-11-735

“Pretty” is nice, but in direct mail it’s the offer that counts.

Opening the December issue of Golf Magazine, 4 different blow-in cards fluttered onto the kitchen table.

Why 4?   Because there are a number of triggers to test on the reader.

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This card focuses on the discount off regular price.

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The FREE gift is the sales incentive here.

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Buy one, get one free for a friend, plus a FREE gift.

As it turns out three of the cards have identical offers, but each with a different deal. Or look. One will feature the discount off the cover price. Two will bathe the reader in yellow ink, but one of those is really pushing the FREE gift–a really cool Golf Distance Finder, with “BEST DEAL!” screaming to check the top box. The fourth card is a gift sub card, making a two-for-one deal, plus a very classy Free Gear Bag.

Each card is key-coded to track which works best. Kudos to the subscription manager who recognizes that one deal does not suit all people.

Based on response, you can bet they will tweak the next set of cards, but odds are, they won’t reduce the count: four.

Now turn to Victoria’s Secret, where we get two mailers within the same week, each taking pre-eminent positioning at the kitchen table during lunch.

Victorias 2014-11-733

The mission of these cards is to drive traffic. At least one will snag the reader.

May I note that the “staff” over at Victoria’s don’t probably enjoy lunch?

Fortunately, they do get full, heated-room privileges, which accounts for their restive, but somewhat hungered composure.

The two mailings are spectacular for their origami and construction. Best of all, each mailer contains 4 different mini-cards with specific deals.

Each card’s mission is to entice the shopper to get to the store.
If the Free panty doesn’t do it, the Free Tote Bag will.

Victoris Secret 2014-11677

The advantage of personal direct mail– the ability to track and analyze.

The production on these pieces is clever. One is a 10-page booklet, with 4 mini-cards attached to one page. The back of each card has a live bar code on it. Meaning they can track response to the mailing, the offer, and yup, to the shopper too.  Yikes!

Victoris Secret 2014-11676

Four cards in a 10-page mailing: unstoppable!

The cards themselves are 24 mil, meaning for you lay folks, thick enough to jimmy a hotel lock.

But they are small, demanding less space in your wallet or purse.

I recall as a small youngster having a wad of direct mail coupons which I pretended were dollar bills….kept them in my plastic wallet. I liked flashing “money” when shopping with my mother. I don’t think she would have gone for the Victoria’s cards so much.

Testing through direct mail offers the luxury of control: distribution, offer, targeting and tracking.   When done well, marketers can get the most for their dollar spent.  That means they learn to send you things you like, and don’t send you things that turn you off.

Sharing testing strategies across different media, like mail and magazines is also productive, and enhances perspective.

Gee Dad

“Gee Dad, it looks better over here!”

So I wonder, could we test the FREE Golf Distance Finder with Victoria’s Secret?

 

Thanks for reading this far!   I hope your mail box provides as much enjoyment as does mine!

 

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