Amazon Misses the Mark With its Holiday Toy Catalog
Amazon.com is great at tackling new lines of business. The path from online bookseller to one of the world’s most valuable companies was forged through its entry into music, video, cloud computing, advertising and groceries. And yet for all of Amazon’s rich data, deep pockets and top-tier talent, it's making rookie mistakes in one of the most established marketing channels around: direct mail.
For the 2020 holiday season, Amazon made its largest push yet into direct mail with a huge (and expensive) toy catalog, which arrived in the homes of millions of Americans. Based on an informal survey of our staff and partners, and a thorough analysis of the catalog itself, it's abundantly clear that Amazon isn't adhering to the best practices for direct mail that have been developed over the past century.
Targeting is Inaccurate
We polled our staff across the country to see who received the catalog and who didn’t. It immediately became clear that Amazon’s targeting was off the mark.
Amazon mailed catalogs to single women with no kids. It mailed catalogs to families with grown children in their 20s and above, yet many families with younger kids — those most directly in its market — didn’t receive a catalog at all.
Amazon’s targeting should be built on robust models combining social demographic variables with transactional data, including transactional data from other’s children’s retailers, not just on the Amazon platform. It’s likely, based on the informal sample we’ve taken, that Amazon neglected both its own rich data sets as well as the transaction data available from third parties.
In-Home Arrival Date Was Too Early
Based on historical data, we've found that the peak response period for toy catalogs is mid-November to early December. The third week of October is too early. Mom isn't buying gifts yet. She had likely just spent a ton of money on Amazon’s own Prime Days, buying things for her household. Holiday toy buying takes place later and closer to the holidays — even in a pandemic-altered season like this one. Amazon, with its unique ability to guarantee two-day shipping for Prime orders, missed an opportunity to capitalize on a competitive advantage for late-season toy buyers.
The Format is Too Long for a Short Sales Cycle
Amazon’s catalog was huge: 92 pages with a perfect bind and loads of fun, but ultimately unnecessary frills in the form of stickers and coloring pages for kids. Even with Amazon’s unparalleled resources, this is likely a big waste when one considers the fact that the in-home date was ill-timed for a shorter sales cycle.
Catalogs don’t have the long sales curves that they used to. Sales are 70 percent complete in the first month after delivery, meaning that the Amazon Toy catalog’s curve was going to peak by mid-November, prior to the height of the gift-giving season.
These miscues underscore the uniqueness of the direct mail category. Many smart, well-funded marketers that have excelled in other channels find that direct mail confounds many of their well-tested assumptions. When it comes to the format, the timing and the targeting, bigger and earlier isn't better.
Amazon can afford to waste a few bucks, and it will certainly be smart about learning from the errors here. However, the lesson is clear: getting catalogs right requires dedicated and specialized expertise. Nothing about it is obvious.
Polly Wong is managing partner, strategic/e-commerce/creative services at Belardi Wong, the leading direct marketing firm in the industry, working with more than 100 retailers and best-in-class brands.