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

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.

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.

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.”

IRCE 2008 Conference Multi-Media CD-ROM

About.com’s Biesel says the only real costs associated with graphic e-mails are developing the creative message and then paying for the bandwidth to deliver those messages. Biesel concurs that the costs overall are minimal because retailers are making up for it with better consumer responses to the HTML e-mails.

Graphic-rich messages make e-mail marketing perform more like television brand advertising, says Paul Sotloff, chairman and CEO of DirectNet Advertising, an online marketing agency that works with such retailers as Booksonline.com and Dirt Devil. “Rich media increases the space and amount of information that can be presented to a consumer, more so than text e-mails or even flat Internet banner ads,” he says. “Rich media matches needs with wants and provides the benefit of a product. You can create an overview of a brand or make an offer for a specific brand by providing that graphic information. The consumer can see the value of it by seeing it in use, seeing the color, size and other features of the product.”

As with any application on the Internet, a vendor community has arisen to help retailers handle the technology. Vendors provide management of databases, e-mail delivery, sniffer technologies, creative and technical support to develop campaigns, as well as analytics that give results. “We can track impressions, click-throughs and successful actions from the e-mails we deliver and we can go back to the retailer and tell them which creative elements caused a product to be sold,” Sotloff of DirectNet says. DirectNet is licensing sniffer technology and combining that with an analytics service that will be able to sort customers by type of e-mail they can receive, he says. Other vendors are DoubleClick, which About.com uses, e-Dialog, CyBuy and Digital Impact, which Red Envelope and Eddie Bauer use.

As bandwidth increases, some e-mail marketers believe bigger graphics can mean bigger sales. About.com’s Bargaindog and StyleSpeak e-mail newsletters have started to use larger pictures. “We’ve moved to e-mails with larger pictures and by doing so we can even double the response rates if we put together a creative message with larger pictures that really feature the product in a prominent way,” says Biesel. “The more images you can use to show what a customer can buy, the better you are merchandising your products.”

andrea@verticalwebmedia.com

New York-based CyBuy, working with CheetahMail e-mail service and online jewelry retailer Ice.com, is reporting huge increases in conversion rates versus non commerce-enabled e-mails. Results from the most recent e-mail marketing campaign with 200,000 of Ice.com’s
1 million customer based show that commerce-enabled e-mails generated a better than fivefold increase in conversions and reduced the transaction process by 75%, from an average of 18 minutes to 4 minutes, according to Domenic DiMascia, CEO of CyBuy.

For the ice.com campaign, CyBuy set up the graphic-rich messages and provided the technology to allow for purchase via the e-mail browser, while CheetahMail managed the message deployment and reporting and tracking technology to monitor results.

CyBuy’s proprietary commerce-enabling technology has two versions: one e-mail message opens a pop-up window, called a daughter browser, when a customer opens a commerce-enabled message, and the other version embeds the order form right into the e-mail message box. “By giving consumers the option to order right from the e-mail, which is connected to the retailer’s supply chain and transaction systems, we shorten the distance between the offer and the sale and make it easier for the consumer to make a purchase,” says DiMascia. Although he did not disclose pricing, he says this service offering adds only about 15% to the average costs for sending graphic e-mail messages to a customer base.

Consumers who can order directly from e-mail do not have to click through and navigate through a retailer’s web site to find and buy what they were offered in the e-mail message. For a retailer that relies on impulse buys with its e-mail offers, this formula works. “We have two problems selling jewelry online: consumers are not sure they should trust us in our jewelry and they’re not sure they should trust the Internet,” says Pinny Gniwisch, executive vice president of marketing at Ice.com. “Therefore, we need to touch consumers with a quick response so they can make an impulse buy. If consumers have to come to the web site to find a special offer they sometimes get sidetracked and forget about the initial impulse to buy what we offered.”