Since starting out in Stow-on-the-Wold in 1991, Scotts & Co has become the UK’s premier independent direct retailer. Here Nigel Swabey, Chairman, gives us a fascinating insight into the secrets behind that success.
Please tell us about your business.
Scotts & Co is a direct catalogue and online retailer. We have what we believe is the largest customer database of catalogue and online customers in the country. We mail about 30 million catalogues each year under 5 separate titles, many of which, like Scotts of Stow, is nationally recognised brands. We’re just shy of £50 million in sales and have over 4 million active customers this year has grown by over 40% since 2019.
What sets your business apart?
We are passionate about innovation. We search for products that are new, unusual or in some way different to what you’d expect to find in the shops. Products that are problem solvers, time-savers, energy savers. Products that offer great value. We shop the world for new ideas like these that we can introduce to the UK market.
How has the pandemic affected your business?
Our business was already growing fast before the pandemic, but in April of 2019, we realised that more than ever, consumers were appreciating the sheer convenience of home delivery. At that point, we decided to double the print runs on our most famous titles and increased our mailing volumes. This resulted in many weeks last Autumn/Christmas when orders were 80%-90% up on the previous year. In the first quarter of 2021, we are increasing mailings of our catalogues further, with a fourfold increase in mailing volumes to 12.2 million.
What plans do you have for the future?
Smart mailers made the most of the ‘Back-to-Business’ postal discounts of 35% that were made available in 2020 during the pandemic. They used the opportunity to test reactivation of some of their dormant (up to 12 years dormant) customers and experimented with new prospect mailings. In our case, those test mailings revealed that we can successfully mail millions of additional customers who are clearly keen to hear from us. We don’t always expect to break even on our prospect mailings, but smart mailers are guided entirely by ‘mail-order maths’. A lower postal cost means a much lower break-even point and therefore much bigger mailing volumes. We went for broke and it paid off with even 12-year dormant Scotts customers coming in above breakeven point and therefore much bigger mailing volumes. We went for broke and it paid off with even 12-year dormant Scotts customers coming in above break even.
What advice would you give to other business owners?
If direct mail is part of your media mix, then ‘do the maths!’ Count the source-codes orders you’ve received and then attribute back the ‘match-backs’ to your advertising spend on mailings. That’s all those ‘source unknown’ orders that you’ve received through all other channels and which match back to your mailing file. You do match back all respondents to your mailing file, right…Right? If a new customer places an order online 30 days after you’ve mailed them with a catalogue, the mailing was the dominant trigger, not the Google ad, the re-marketing ad or the affiliate hit!
Sadly, too many CEO’s are marching to the drumbeat of the internet and are allowing their online marketing teams to claim credit for orders that were actually generated by mailings, just because the customer chose the company’s website as the most convenient channel for the transaction. At Scotts, some of us have been doing this for over 45 years. We know how to identify the origin of orders and we know that paper is by far the most cost-effective medium for generating footfall to retail stores and traffic to websites.
What do you look for in a supplier?
We are looking for partners we can trust – suppliers who listen to our concerns and who are sensitive to those concerns, whether it be about the quality of the products they are supplying or the timing of their deliveries. In logistics, it’s not all about price. It’s about your supplier’s sensitivity to your timing imperatives, your needs in terms of mailing supplies and the management of order flows.
How does Whistl support your organisation?
That’s an easy one. Of all the DSAs (Downstream Access Suppliers) Whistl are by far the most responsive and attentive to their clients’ needs. Much as we all love Royal Mail, their retail team is simply not able to move as fast and are not able to be as responsive or creative in coming up with ideas to resolve tactical challenges. No surnames, but if any Whistl clients have had the experience of working with Sharon, Andy or Nick, they’ll know what I mean when I say that it is a pleasure to work with them. I know postal affairs as well as most, but I’m still learning from these guys.
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