April 21, 2004, 12:00 AM

Merchants step up e-mail to maintain customer loyalty, study says

In a survey of 98 online merchants’ e-mail marketing strategies during Q4 of last year, The E-Tailing Group found mass merchants, home-and-garden and apparel retailers to be the most aggressive in using e-mail to spur repeated buying.

In a survey of 98 online merchants’ e-mail marketing strategies during Q4 of last year, The E-Tailing Group found mass merchants, home-and-garden and apparel retailers to be the most aggressive in using targeted e-mail to spur last-minute and impulse buying among their regular customers. "In most cases, it’s more about loyalty than prospecting, because the end result is you wind up with more loyal customers," says E-Tailing Group president Lauren Freedman.

But she cautions that retailers need to be careful about the frequency and content of e-mail to assure that it’s suiting the interests of their customers. "There can be a fine line between sending something that’s relevant and scaring loyal customers away," Freedman says.

The study, which compiled more than 1,000 e-mail marketing messages from Oct. 6 through Dec. 6, found that mass merchants sent the largest percentage of that e-mail, 16%, followed by home-and-garden and apparel merchants, each at 15%. It also noted that mass merchants and books-and-music retailers averaged the most e-mails sent per week, at 1.6.

Retailers in the gifting category sent only 6% of the total e-mails received by the study, but accounted for 30% of the e-mails sent during the two weeks prior to Christmas. Online drugstores accounted for only 4% of e-mails, a low figure that may be tied to the scheduling of fewer pharmacy promotions during the competitive pre-holiday period, E-Tailing Group says.

Individual retailers cited in the survey for the sending the most e-mails, and most frequently, were Barnes & Noble, with average 48 e-mails per week; Overstock.com, 3.3; SmartBargains.com, 3.1; Buy.com, 2.6; and Zappos.com, 2.8. Freedman notes that Barnes & Noble lets its customers sign up for multiple e-mail options to personalize their marketing communications, while Overstock, Buy and SmartBargains rely on frequent e-mails to let customers know about their frequently changing list of special deals. She adds that shoe retailer Zappos, whose business model is largely based on spreading the word about its customer service with free shipping and broad selection, is relying a lot on e-mail to get the word out.

"Whatever, the motivation, we caution about respecting the customer and not deluging them with too much email," Freedman says. "In order to avoid being considered ˜spam` it is important to keep targeted email content relevant, timely and whenever plausible, let customers opt-in regarding frequency and content."

If done properly, targeting customers with relevant messages at the right frequency, she adds, e-mail can do more to build loyalty than other marketing initiatives. "It keeps the merchant top of mind, that’s the goal," she says.

The E-Tailing Group released the following average number of marketing e-mail messages by sent out per week during the survey period by retail category:
--Books and music, 1.6
-- Mass merchants, 1.6
-- Department stores, 1.1
-- Consumer electronics, 1
-- Home and garden, 0.9
-- Office suppies, 0.9
-- Apparel, 0.8
-- Drugstores, 0.8
-- Accessories, 0.7
-- Health and beauty, 0.7
-- Computers, 0.6
-- Sporting goods, 0.5
-- Pets, 0.5
-- Toys and games, 0.5.

 

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