Why DTC brand Parachute prefers direct mail to display ads
With digital advertising dragged down by low conversion rates and a failure to rope in repeat customers, the direct-to-consumer bedding maker Parachute Home is trading the inbox for the mailbox.
Parachute, which sells products like high-end sheets, quilts and towels, counts direct mail as one of its largest ad expenditures. It uses the outlet to let customers know it launched a new product category, or push customers into nearby stores. Meanwhile, CMO Luke Droulez said Parachute avoids banner ads on websites because of their low conversion rates. Such ads, Droulez said, are ubiquitous, inundating to customers and low drivers of revenue for businesses. Shifting spend to direct mail is about control of not just quality, but also quantity. For instance, when Parachute launched a new line of tabletop products, including napkins, table-runners and towels, the company used direct mail to promote the products to new and returning customers — driving up average purchase sizes.
To send smarter direct mail — meaning personalized, targeted advertisements based on customer location and behavior — Parachute works with PebblePost, a platform specializing in “programmatic” direct mail. Along with Parachute, other PebblePost clients include the online delivery service Boxed, Dermstore and Tumi.
As DTC brands reach the limits of online advertising, startups and larger players alike are turning to new twists on old-school strategies — including catalogs, postcards and brochures. Companies are aiming to take back the space they used to occupy on mom’s kitchen fridge and grandma’s coffee table by using data to improve a more traditional method of advertising. It’s also become a less cluttered ad space, as media budgets have shifted online.
“We don’t want people to receive more than one postcard per quarter, because at a certain point, I don’t want people’s mailboxes to turn into their inboxes,” said Droulez.
To personalize direct mail pushes, PebblePost founder Lewis Gersh said the service identifies a consumer and pinpoints where he or she lives. PebblePost clients like Parachute can use that data to generate a customized mailer in real-time. Gersh said personalized online ads have become overly invasive as the ability of agencies to follow an individual online has improved.
“You’re barraged with digital ads re-targeting you,” he said. “A consumer shouldn’t need a restraining order against a company for six weeks to look for a pair of socks.”
Direct mail can also drive in-store foot traffic, which is becoming more relevant as DTC brands open more stores. A company can send would-be or return customers a coupon that can only be redeemed in a physical store — an effort to increase foot traffic — or offer a personalized suggestion for a quick online purchase.
Parachute operates four retail stores, with a fifth set to open in San Francisco in the coming weeks. Droulez said direct mail has been the single most effective way to drive customers into its stores.
“With retail, it’s been great, because you can geo-target within a certain radius, so it allows us to combine different messages and reach different customers,” he said.
Subscribe to the Digiday Retail Briefing: A weekly email with news, analysis and research covering the modernization of retail and e-commerce.
More in Marketing
A number of marketers are frustrated that they aren’t getting the premium service they believe they’re shelling out for.
Digiday+ Research: A definitive ranking of brands’ and agencies’ marketing channels, where social reigns supreme
For brand and agency marketers, social media holds the top spot by far when it comes to spending and confidence that the channel drives marketing success.
As a 54-year-old brand, Red Robin is revamping its digital efforts with a cookie-less future on the horizon.