April 30, 2001, 12:00 AM

How richer e-mail graphics make for richer e-retail sales

With graphics, e-mail marketing gets sophisticated—and creates some stunning results.

It’s no secret that pictures of products can do more for retail sales than words. And now with advances in computer technology, e-mail marketing is catching up with that concept.

Major retailers, including Eddie Bauer and Egghead.com, as well as more specialized merchants such as

RedEnvelope.com and FritzGifts.com, are incorporating HTML into their e-mails, producing heavy graphics that are bringing in more customers and transactions. “Customers like to see pictures,” says Martin McLanan, CEO of RedEnvelope.com. “It’s that simple.”

How much more do they like pictures? Response rates increased anywhere from 25% to 100% among retailers who have used HTML e-mails. RedEnvelope, which sends promotional e-mail to 400,000 customers, is one retailer that saw response rates double. “We’re a product-driven company,” McLanan says. “When someone sees a hot item on an e-mail message they can go right to the site and buy it. And you can mix up the creative to put special offers on top or a special product on top, do drop down menus or use various image sizes to promote items. HTML allows customers to get closer to the product.”

About.com, which operates Bargaindog and StyleSpeak e-mail newsletters, which offer online deals and fashion to subscribers, introduced graphic e-mails in 1999 after a year of sending only text messages. Response rates increased 33% right away, says David Biesel, vice president of marketing for About.com’s direct division.

Graphically rich e-mails even deliver a benefit before customers look at the offer: Once customers are used to receiving a graphically rich e-mail from a particular marketer, they are more likely to open it than they are to open text e-mails. Egghead.com, for instance, has found that its marketing e-mails are opened now 40% more frequently than text e-mails because customers see the graphic in their e-mail previews. “That 40% has the WOW! Factor,” which prompts customers to buy more, says Jeff Sheehan, president and COO of Egghead, which sends e-mail marketing messages to 3.7 million customers.

Marketers send out 17 billion e-mail messages a year, says Forrester Research. Of that amount, market participants say about 40% are HTML-based. And all that growth has come in just the past year.

Retailers have wished for some time to be able to use the same kind of marketing to their online customers that they use to their offline customers. But until recently the technology to allow them to do so was unavailable.

Graphic-rich e-mails are sent in HTML format that allows the pictures to be imbedded into the e-mail message. Without HTML, marketers would have to send graphics as an attachment. Marketers say most recipients will not bother to open an attachment to a marketing message.

Browsers are steadily being upgraded to read HTML e-mails. Today, as many as two-thirds of browsers are capable of viewing HTML e-mails. And that number is growing steadily. Evidence of the wider acceptance of more sophisticated browsers comes from America Online. The largest provider of Internet access to consumers in October 2000 released AOL 6.0, which can read HTML e-mail. Previous versions could not.

Marketers welcome the upgrade, since sending HTML e-mail to consumers whose browsers are unable to read HTML e-mail is not only ineffective marketing, but it also risks turning off-or worse, antagonzing- customers who may have sat through the process of opening the message, only to see just another text-based marketing e-mail.

Sniffing around

Enter “sniffers,” which are another technological advance that make HTML e-mails possible. Sniffers allow marketers sending HTML e-mails to figure out what kind of browser a customer has and whether the browser can support a high-tech e-mail. Sniffers have been key in determining which messages are opened and read. “Sniffer technologies have gotten better at identifying whether consumers can read HTML files,” McLanan says. “That’s been the biggest improvement.”

Without sniffer technology, a retailer would not know who is not able to open the messages. “We’re having a hard time gauging the technology to see if the consumer is able to open the e-mail or if it’s garbled,” says Tom Fritz, president of FritzGifts.com, which has been trying out graphic e-mails for about five months and has not implemented sniffer technology. A single employee develops the creative HTML messages, which are sent to a database of 10,000 subscribers.

A bigger impact

Even so, Fritz says the company is seeing benefits in its HTML efforts. “We’re confident that our graphic e-mails are having an impact even though we may not have everyone on our list that is able to read HTML,” Fritz says. “We believe we’re making a bigger impact on 60% of the people who can view the graphics, and that we’re more likely to convert those people to buyers.” FritzGifts plans to use both text and graphic e-mails to develop a marketing mix until it has a more definitive understanding of what works best. FritzGifts is considering the use of sniffers.

Meanwhile, About.com finds that sniffer technology is helping to make the investment in graphic e-mails worthwhile: “Our hesitancy to send graphic e-mails was that we were never sure if the consumer knew what they could open, and that would result in wasted money on e-mails,” says Beisel. “But now we’re moving from communicating with the consumer at the lowest common denominator-text that everyone can read-toward more graphics.”

The cost of creating and sending HTML e-mails is minimal and easily covered by an increase in response rates and sales, users say. Egghead.com’s Sheehan says it costs “less than pennies per e-mail.” Now that Egghead.com is doing the job internally, he says it costs “even fractions of pennies.” While the company initially worked with Digital Impact, Egghead now does its HTML e-mails in-house with a team of four and e-mails are sent via a list serve. “We saved about 75% of our costs by doing this ourselves,” he says. “And because of the lower cost we are e-mailing more people.”

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