LAFAYETTE, CO — August 19, 2008 — Abacus, a division of Epsilon, today announced the release of the 2008 Abacus Trend Report, which reveals that revenue from consumer offers grew 5% over the prior year despite the beginning of a broad economic slowdown. The report, which is based on aggregated merchandise purchase data from the Abacus Cooperative database, indicates marketers need to focus on strategies that streamline the marketing process and reduce the variable costs associated with marketing investments.
“The insights in this report reflect the market sentiment and the shift in marketing behavior that continues to change the landscape for our clients,” said Brian Rainey, Abacus’ president. “Understanding multi-channel transaction data and behavior is a vital component of marketing strategy.”
Online Sales Continue to Drive Growth
The study found the transition to online purchasing continues to grow and the Internet remains the purchase channel of choice over the call center/mail channel. Additionally, the percentage of sales taking place online has grown over 40% over the last four years – increasing 11% in the most recent year alone to now make up 56% of all direct consumer revenue.
According to a Harris Interactive study conducted for iCongo, one third of US adults with Internet access are more likely to shop online – versus in a store – due to high gas prices. In addition, other motivations for shopping online include free shipping, lower prices and the ability to shop any time.
Not All Customers Are Created Equal
The study examined the behavior of multi-channel buyers versus individuals who purely shop online, at retail locations or by call center/mail and found that multi-channel buyers are highly valuable to Business-to-Consumer marketers. Compared with other repeat buyers, multi-channel buyers represent 69% of therevenue and spend nearly twice the amount per household. The total value of Business-to-Consumer multi-channel buyers grew year-over-year with a 15% higher transaction rate and a 10% higher dollar per household. Business-2-Business multi-channel buyers also grew year-over-year with a 30% higher average transaction rate and a 14% higher average sale.
First transaction attributes like original source, month of acquisition, and initial spend continue to be highly correlated with customer potential and can be a predictor of future customer value for segmentation and contact strategy decisions.
Direct Mail Circulation is Steady
The current direct mail environment is particularly challenging following the May 2007 postage increase and other rising costs associated with direct mail production and fulfillment. Despite these factors, direct mail circulation remained relatively steady with a 1% decline over the prior year in prospecting volumes. The study shows a notable shift in circulation from prospecting to deeper house file penetration. An understanding of near-term value by list source is critical when optimizing circulation.
Methodology
Two main data sources were used to compile the 2008 Abacus Trend Report. These sources leverage the combined technology and data assets of Epsilon’s Abacus Cooperative database and comprise a wealth of transactional data. The analysis also looked at the “Multi-Channel Benchmark Group,” a subset of the Abacus Cooperative members consisting of multi-channel merchants. For a sneak peek at 2008 trends, the analysis identified a separate comparative group of multi-channel merchants with full activity from January 1, 2008 through March 31, 2008. Note: Due to methodology changes between Trend Reports, it is recommended that year-over-year activity be examined within a single Trend Report, as opposed to comparing prior versions that may include different merchants.
About Epsilon
Epsilon is the industry's leading marketing services firm. Ad Age ranks
Epsilon #1 U.S. Marketing Services Firm and #1 U.S. Direct Marketing
Agency. Services include strategic consulting, database and loyalty
technology, proprietary data, predictive modeling and a full range of
creative and interactive services including brand and promotional
development, web design, email deployment, search engine optimization
and direct mail production. In addition, Epsilon is the world's largest
permission-based email marketer. Epsilon is an Alliance Data company.
For more information, visit www.epsilon.com or call 1.800.309.0505.
###