The competitive environment for Farmers is very challenging with a wide range of competitors in each category in which it operates, e.g. in fashion there is a plethora of chain stores and boutiques for all demographics, in beauty there is pharmacy, supermarket and online, and in homewares there are aggressive competitors. Retail sales have been under constant pressure since the GFC and Farmers has fought hard to meet sales budgets.
Farmers Club was launched in August 2011 to support sales growth and better understand customer behaviour. Farmers has always used direct marketing as part of its marketing mix, but two years on from the Farmers Club launch they have the requisite data richness to influence the way they go to market at a strategic level.
The way the Farmers Club programme is managed demonstrates all direct marketing best practice techniques and these have delivered for the business on many levels.
The segmentation strategy is used as a targeting tool for marketing activity and as a shortcut for tracking the shape of base via the migration between segments as a result of direct marketing.
Direct mail and email are used as key channels for different messages, the former being used as a high engagement channel whereby content and incentive testing is standard. Predictive response models have been developed for their sales events, having come to better understand the various segments as Farmers Club becomes more established. And the email programme is among the smartest in market, with data-driven content delivered dynamically.
For the first time, Farmers are using data insights to proactively drive targeted marketing activity as a launch-pad for products/brands/departments. The ability to use data to quantify opportunities for suppliers has led to a step change in how suppliers and buyers work together, and direct mail/email is used increasingly to target marketing messages, where before they would have simply purchased a page in a catalogue.
Key Direct Marketing results:
• Average response rates to a One Day Sale event are between 12-17%
• The One Day Sale event on 9 May was Farmers’ biggest trading ever – even compared to the Christmas period
• Approx. 9.2 million pieces of personalised direct mail and approx. 18.3 million highly targeted emails were delivered in the last 12 months
• Weekly email open rates average 35%, well above industry standards. Click-through rates average 17.8%, again well exceeding industry averages
Direct marketing now sits alongside TV and catalogues (traditional go-to channels for all retailers) as an integral part of the Farmers marketing mix.
Quite simply, direct marketing is now seen as a primary sales-driving channel for Farmers.