In the next decade, direct marketers need to get ready for the European invasion, get rid of their inventory and bone up on their linguistics.
These were just a few of the predictions futurist Donald R. Libey, managing partner of consultancy Libey-Concordia, shared with attendees at the New England Direct Marketing Association’s spring conference on Thursday.
Retailers are learning that DM is profitable, he said, pointing to DM’s annual 9% growth rate. In 2007, DM is projected to net $3 trillion in profits. By 2012, that will jump to $5 trillion.
“It’s humongous. It is the largest form of commerce in the world,” he said. “We have arrived.”
Retail is a discounting strategy, he said, while direct marketing – built on database expertise and customer service – is not. But while DM is the best there is at analytics, less than 10% of DMers use RFM to drive their business.
In 10 years, smart multichannel marketers will have zero inventory. Product will still be king, he said, but the ability to turn around on a dime and have flexibility and speed will be vital. He cited drop shipping as something companies need to utilize to stay ahead.
Asia and Europe want our business he said, noting the dollar isn’t going to get stronger anytime soon. “We’re standing on the cusp of the European invasion of U.S. marketing,” he said, noting that 90% of European catalogs use RFM. “They may be better than us and they’re coming.”
Access to products and customers is going to be huge in the future, he said, noting that Google and search is controlling access. Of the last four hires he helped facilitate, Libey noted that all were English majors with masters in linguistics. “Scrabble players,” he said, who specialized in word association.
“Net gnats” are also a danger to DMers, he added. These “pests” specialize on one tiny product niche, like a particular kind of sausage. A larger food products cataloger might not notice them buzzing around, until there are 40 of them eating up a whole category of sales.
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