July 24, 2008, 12:00 AM

How segmenting e-mail fashions better response rates for Intermix

After an expanded customer database at women’s fashion apparel retailer Intermix led to sharp drops in its e-mail marketing click-through rate, a new segmented e-mail system brought the rate back up to about 50%, the retailer says.

After an expanded customer database at women’s fashion apparel retailer Intermix led to sharp drops in its e-mail marketing click-through rate, a new segmented e-mail system brought the rate back up to about 50%, director of e-commerce Don McNichol says.

“Now we can continue adding to our customer database and move the needle back up to the higher open and click-through rates we used to see,” he says. The retailer, which operates 24 stores in addition to IntermixOnline.com, had been getting open rates of 40% and click-through rates of 60% before an expanded customer database dropped those rates down to about 20%, McNichol says.

In May, Intermix deployed the Auto Target e-mail segmentation application from iPost, an e-mail services provider. “This has enabled us to segment our customer database in an efficient manner to see who’s responding or not responding to offers,” McNichol says. “It makes us more efficient in the relevancy of messaging.”

The Auto Target application uses RFM analysis, monitoring the recency, frequency and monetary value of individual customers’ interactions with Intermix. “We’re tracking all purchase behavior extending from e-mail to our web site, and also doing some multi-channel shopping analysis to see how e-mail is driving in-store sales,” McNichol says.

By segmenting customers by interest in specific products and in types of offers, such as price discounts or opportunities to buy the latest fashions, Intermix is able to send e-mail that customers are most likely to want to receive, he adds. The Auto Target application allows Intermix to set business rules that automatically trigger particular types of e-mail offers based on customer interests, but Intermix also manually reviews Auto Target data to look for ways to further segment its customer base and sharpen its marketing, McNichol says.

“We are able to target our notorious sale customers without sending discounts to the entire customer database, and send other e-mail to customers not concerned about sale items who just want the hottest fashions of the season,” McNichol says. “But we also learn how many customers want the hottest fashions but also want the sale items.”

Intermix also uses Auto Target to track and respond to customers’ shopping behavior in stores as well as online. It occasionally offers coupons in stores as an incentive for shoppers to provide their e-mail addresses, then ties their in-store as well as online shopping activity to e-mail marketing. “Some customers want all the latest fashion news but only buy in our stores,” McNichol says. “If we only paid attention to what happens online, we wouldn’t send these customers targeted offers.”

Intermix, which operates 24 stores in several major metropolitan areas, does about 8% of its sales online, McNichol says. The online channel has been growing at a high double-digit growth rate, and the retailer is planning to begin offering international shipping of online orders this fall.

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