April 14, 2010, 12:00 AM

Flash-sale site HauteLook gets the word out fast with a new e-mail system

HauteLook, which offers brief sales with deep discounts from about 850 retailers, wanted to get its daily e-mails to its 2 million customers within five minutes. It says it chose e-mail provider StrongMail because it was able to do the job.

Time is of the essence at HauteLook.com. The sample sale site hosts about 12 sales per day offering items at deep discounts. Sales begin each weekday at 8 a.m. Pacific time and last 48 to 72 hours. HauteLook’s business model makes the timing of its marketing e-mails extremely important, says Kerry Bennett, director of marketing communications for HauteLook. The retailer wants the daily e-mails it sends to its 2 million members to hit inboxes right before sales start.

“It is very important to get e-mails to our members right around 7:55 a.m. every day,” Bennett says. If the retailer sends messages too early, they’d fall off the member’s radar screen; too late, and an item could be out of stock before the consumer had a chance to buy, she says.

HauteLook, which offers sales from about 850 retailers, recently moved to e-mail vendor StrongMail from a different provider because StrongMail’s technology enables it to get messages out to members within a five-minute period. Before, consumers would receive e-mails over a 30-minute time span, Bennett says.

Ryan Deutsch, vice president of emerging media at StrongMail, says his company can deliver messages faster because StrongMail connects directly to HauteLook’s data sources. This means that HauteLook never has to spend time pulling e-mail lists from a database and then importing them into its e-mail system before sending an e-mail blast, Deutsch says.

“We directly connect to our client’s data, whether it’s in a Teradata data warehouse or with SAP,” Deutsch says. Teradata is the data warehouse unit of NCR Corp. SAP offers accounting and other business management applications.

Additionally, StrongMail’s software is installed in HauteLook’s data center. Because the program is part of HauteLook’s network, HauteLook doesn’t have to share storage, memory and bandwidth with other companies. “Like any system, with an e-mail platform there is a finite number of resources and clients sharing platforms are always competing with each other for these shared resources,” Deutsch says.

For example, if a client on a shared platform schedules an e-mail campaign to launch at the same time as 10 other companies that are trying to send millions of e-mails simultaneously, it could take longer for messages to reach inboxes, he says.

“If a retailer using a shared platform sends a 24-hour sale promotion to a list of 20 million recipients at a peak delivery time, the mailing could take so long to deploy that the last 2 million e-mails arrive after the sale is over,” Deutsch says. “Not only is the retailer embarrassed-they have a big-and potentially expensive-customer service issue on their hands. But if HauteLook wants to send out a very limited-time promotion, it can do so and know that the e-mail will be received when it is intended it to be received.”

 

Shar VanBoskirk, vice president and principal analyst with Forrester Research, says StrongMail’s installed program offers benefits-including added security, control, and potential cost savings.

 

“This is a great option for companies that have a concern with data security, like financial services firms who just can’t let customer data outside of their own data centers,” she says. “An installed solution gives a marketer more control of delivery and data.”

 

And she adds because a company doesn’t pay StrongMail for hosting, it can be cheaper than other options.

 

But there are challenges with going this route, she says. For example, if a company is sending out huge volumes of e-mails from software installed in-house, that can slow its own network, she says. The data don’t go away with an installed program, they are just managed internally instead of by the vendor, she says.

There are options, for retailers who don’t want their messages delayed but don’t want to host their e-mail in-house, VanBoskirk says. Providers that host e-mail programs for several companies typically allow clients to schedule delivery times to avoid traffic jams, she says.

The process to switch to StrongMail took about two months, Bennett says. HauteLook would not say if the new system cost more or less than its old e-mail provider. Although the company just finished moving over recently, Bennett says she is already noticing higher e-mail click-through rates. And she says customers who do click through to the site from an e-mail are spending more time and money on the site than before.

Additionally, HauteLook plans to use StrongMail’s social media marketing capabilities to allow customers to share deals and messages on social networks. StrongMail also enables it to test incentives for social sharing. For example, HauteLook could test “get three friends to join and get a $20 coupon” versus “get one friend to buy and get a $10 coupon.” HauteLook can then use the StrongMail system to identify the top influencers and reward their loyalty with customized offers. About 60% of HauteLook customers discover the site through word of mouth, Bennett says.

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