Since the introduction of the computer and the internet, most of the manufacturers have found

themselves at an advantage by making direct sales rather than having to deal with the retailers

and wholesalers. Direct marketing, as the name sounds, refers to an approach of both; channel

free distribution and channel free communication, and stresses the fact that the communication or

distribution is carried out without the use of intermediaries, such as retailers or wholesalers.

Research has proven that such direct links between the manufacturer and the final customer not

only allows the manufacturer to absorb the profits previously consumed by the middlemen, but

also to maintain a close, personal link with the existing and potential customers of their

respective products.

Direct marketing became a powerful tool at the time when the cost of communication
was falling rapidly. The subsequent proliferation of low-cost internet access opened up
opportunities for companies to deal directly with thousands or millions of individual
customers in a way that was previously unimaginable, and only manageable through
the use of intermediaries. The cost of communication has continued to fall with new
communication channels emerging, presenting opportunities as well as challenges for
direct marketing. The opportunities derive from the greater choice of low-cost means of
communicating with current and potential customers. But it is a challenge for firms to
evaluate the effectiveness of this proliferation of new channels. A more significant
challenge is the lack of control over communication which this increase of channels
implies, as consumers are increasingly able to communicate among themselves, and in
this high load communication environment, the direct marketer has to compete for
attention with messages from a wide range of peer group-based media.

Direct marketing is a subset or sub-discipline of marketing. It is a special type of marketing that

has two basic differences that distinguish it from other types of marketing. The first

differentiation point is that it focuses on dealing directly with and conveying the message

directly to the consumers, without involving any intermediaries or intervening media. The

second is that direct marketing emphasizes on and calls for a measurable and traceable response

from the customer on which it is applied, notwithstanding the medium. Sometimes, direct

marketing is considered a controversial sales technique. The most common of these techniques

are wanted or unsolicited emails, telephone calls, brochures or coupons etc. however, the
controversial issue is that sometimes it is felt that direct marketing infringes the basic right of

customers to privacy (Zahavi and Levin, 1997a).

Retail Marketing Opportunities

However, with the major players developing their online grocery activities, and competition
intensifying, so the retailers have responded with higher above-the-line marketing spend in
2010. In 2010 Tesco increased the advertising spend supporting its online operations by
more than 600% in response to the strong push by Sainsburys, which was the second-
highest spender in the year with more than 1 million invested in above-the-line spend on
its online operations. Ocado increased advertising spend more than 60% in the year.
Direct mail remains the medium of choice
Direct mail accounted for almost two thirds of advertising spend on online grocery,
representing a decline from its peak of nearly three quarters of spend in 2009. However, it
should be noted that spend on this channel rose from 2.2 million in 2009 to 3.6 million in
2010, the loss of share reflecting even faster growth in Direct mail is preferred as a channel
as it enables operators to target geographic areas more effectively, including new areas they
are entering as well as established areas where usage remains low. Going forward we will
perhaps see more television advertising of the service as coverage becomes more
widespread, with Asda and Tesco already standing at around 97% country coverage.

Sainsbury
Despite the ongoing tough economic climate, Sainsburys enjoyed a solid year of growth in
2010. Sainsburys headline growth rate was above the comparative rises at Tesco and Asda,
enabling the company to grow market share.

Sainsburys reported that it saw some 21 million transactions per week in the year, one
million higher than in the previous year. Efforts to improve price points with the expansion
of the Basics brand along with the relaunch of the Taste the Difference range reportedly
boosted performance.

Increasing investment in non-food lines has been a major driver of sales growth in recent
years and this continued in 2010/11, with non-food sales reportedly increasing three times
as fast as food. In some of the largest outlets, own-brand lines are being mixed with
branded items in certain categories, such as electricals, as the company seeks to give its
stores real destination status. Sainsburys TU clothing line is now reportedly the seventh
largest clothing brand by volume sales in the UK, while a number of general merchandise
categories have achieved sales growth in excess of 20%.

New outlets and store extensions have provided a considerable boost to Sainsburys store
network in recent years. Over the past five years gross sales space has increased 10%, with
most new stores in Scotland, Wales and the South West where the company has been less
well-represented. Store extensions have tended to be more of a feature in the South and
East, with non-food offerings being introduced or extended.

Sainsburys is playing catch up with its non-food ranges, trying to both improve and expand
them to compete more effectively with Asda and Tesco.

Although it comes from a lower base, the rate of non-food growth has undoubtedly been
impressive, at three times the rate of food and with certain categories defying the tough
economic climate with more than 20% growth in 2010. The TU brand has built a strong
following and Sainsburys is now reportedly the seventh largest clothing retailer in the UK by
volume with its mix of high-street fashions at supermarket prices.