Direct Mail Marketing

What Amazon’s Holiday Toy Catalog Teaches Us about AI Direct Mail

December 4, 2018
Author
Rachel Wedlund

We talk a lot about e-commerce retailers embracing AI direct mail. Online brands ranging from Stitch Fix to LendingClub to WayFair have jumped on the postcard automation bandwagon, and this doesn’t surprise us at all. Direct mail marketing works, especially when paired with cross-channel digital strategies.

But even we weren’t expecting this: a holiday toy catalog from Amazon.

Yes, the Godfather of e-commerce itself made an AI direct mail debut this holiday season, and it did so in a big, nostalgia-filled way.

Amazon ai direct mail
Source: Amazon

Analysts say the holiday toy catalog is part of Amazon’s plan to fill the void left by Toys ‘R Us. However, Amazon is already beating major brick-and-mortar competitors—including WalMart, Target and Costco. So why bother with a holiday catalog at all?

Why is Amazon Embracing AI Direct Mail?

We can’t say for sure why Amazon invested in a holiday catalog, but we do have some ideas. Most e-commerce brands use artificial intelligence direct mail  (direct mail that is data-driven and automated) as an arm of a larger digital strategy. Direct mail is a powerful, physical form of marketing that reaches a consumer base increasingly burned out on digital.

And the best performing direct mail is customized for each recipient, giving them a push to visit a brand’s website. This brings them back into an online funnel, with renewed interest and vigor.

Amazon’s holiday catalog may well be a test as the e-commerce giant works to integrate direct mail into its online marketing strategy. We would not be totally surprised to see cart abandonment postcards as well as re-engagement mailers from Amazon in the future.  

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What Can We Learn About Artificial Direct Mail From Amazon?

While we can only speculate when it comes to Amazon’s goals and motives behind the 2018 holiday catalog, there is still much to learn from the direct mail strategy as we see it.

Here are 5 takeaways about AI direct mail from the holiday catalog.

1. Direct mail has a strong emotional impact. Use this to your advantage.

Direct mail remains a dominant channel in the Digital Age because it has something digital just can’t touch. Direct mail is tangible. It’s real. In fact, direct mail elicits such a strong emotional response consumers who receive direct mail remember the brand 75% of the time, according to a Canadian neuromarketing firm. And when consumers receive digital messaging, they only remember brands 44% of the time. Research by Indiana Digital gets at the heart of this, finding consumers experience a massive increase in oxytocin levels (38%!) when they receive paper mail.

Amazon is maximizing the emotional impact of direct mail in at least three ways:

  • Timing: Amazon sent this catalog during the holiday season, a time when we are inundated with marketing messages. If ever there is a time to cut through the digital clutter, this is it.
  • Format: A holiday catalog invokes nostalgia. It reminds us of flipping through toy books as kids, dreaming up our wish lists. This is mail we want to sit down with over a cup of hot cocoa.
direct mail catalog
Source: Amazon

  • Design: The catalog’s front design resonates. It shows two kids playing make-believe in a box (a Prime box, of course). Anyone who knows children knows they often enjoy the box more than the toy itself. So, Amazon is poking fun at itself a bit here, as well as making a touching brand-to-human connection. Amazon gets it. Now we’ve got a warm, fuzzy feeling and are in a buying mood. Let’s look inside.

2. AI direct mail should be trackable.

amazon qr code direct mail
Source: Amazon

You should test, track and measure AI direct mail just as you do email, pay-per-click and social. Amazon does this by using QR codes that route to product pages. Other brands do this by listing dedicated landing pages on their direct mail. (Target opted for a trackable coupon code in its 2018 Holiday Catalog).

3. Segment your list and improve your ROI.

Amazon didn’t send its catalog to its entire customer base. Of course, it would have been enormously expensive to do so, and not all consumers are good targets for this type of direct mail.

We don’t know what data sets Amazon used to create its mailing list. But the fact that Amazon narrowed its list is important. We highly recommend integrating your CRM with Inkit’s direct mail software to refine your direct mail segments, customize direct mail messages, and trigger mailers. This can vastly improve your ROI as opposed to large-scale mailers with generic messaging.

4. Direct mail has staying power. Make sure your content reflects the timeline.

If you’re a Prime member, you know Amazon’s pricing isn’t like other retailers. You can put something in your cart in the morning and find the price has changed by your lunch break. These real-time price changes are likely the reason why the retailer didn’t include pricing in its catalog.

While missing prices will affect conversion, this is definitely the best choice for Amazon. Price motivates consumer action, but it is better to leave it out than risk false advertising and customer frustration. Amazon could have included a coupon as a mitigating motivator to compel action, but this might have felt off-brand. However, it could have also given the catalog an extra special touch (since Amazon doesn’t normally offer discount codes), ensuring customers look forward to receiving Amazon’s future mail.

Are You Ready to Test AI Direct Mail?

Are you thinking about adding AI direct mail to your 2019 marketing strategy? One of the easiest ways to get started (and one of the best ways to get stakeholders on board) is with a postcard test. Repurpose a successful email promotion for print and compare results. Let us know if you’d like a free demo of our direct mail software.

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