Shift from traditional mail order channels to online continues

The Annual Multi-Channel Report from Abacus in the US highlights the growing importance of online for mail order companies.
While the report highlights the shift from traditional mail order, such as telephone, mail and fax, to online continues, the report says that the majority of households continue to order through the traditional channels, with these accounting for 55% of orders, down 4% from 2004.
At the same time, 25% of direct sales for multi-channel merchants were made via the web in 2005, compared with 20% in 2004. The proportion of dollars and transactions generated online continue to grow strongly at 19% and 17% respectively year on year.
It reveals a 14% increase in the number of transactions and total sales for multi-channel retailers in 2005, up from a 10% increase in 2004, further demonstrating the continued growth of the online channel in mail order.
According to Abacus, the latest increase was driven by the purchasing activity of 62m households making approximately 257m purchases via direct channels in 2005, worth USD31.3bn in sales.
For the majority of the larger categories, good growth continued: with children’s products putting in the biggest jump up 11% to USD1.3bn; fashion and accessories was up 9% with sales of USD8.6bn; home decor and furnishings up 5% with sales of USD5.4bn; and men’s products up 6% with sales of USD3.1bn.
The report found that the average order sizes for catalogue and online transactions continues to change, with traditional channels remaining static while web order values grew by 2.7%.
Brian Rainey, CEO of Abacus, said: “We’re excited about sharing the insight we uncovered for this year’s trend report because it indicates the continued patterns of the ever-evolving channel landscape. The results captured within the report are valuable to marketers that are broadening customer contact strategies and focused on maximising their marketing investments.”
Despite this, and the fact the US faced unforeseen national disasters and a postal increase in 2005, direct mail performance was up on the previous year. Overall, direct mail performance was 10% greater in 2005 than in 2004 on similar circulation volumes with response rates for prospecting being 14% higher and sales per book 17% higher than the previous year.