E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
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24/7 Real Media, which counts Stamps.com, BankRate.com and Scholarships.com among its clients, also encourages multiple approaches. It is building on its core offerings of list brokerage and management by expanding its e-mail service bureau offerings. “We have more closely aligned our e-mail division with our promotions division,” Tifft says. “We are able to package our data-capturing services and account-acquisition programs much more aggressively.”
Combining the services allows 24/7 Real Media, which has a database of 38 million names, to understand what motivates consumers. For instance, the company knows what percent of recipients will respond to an e-mail coupon that the consumer redeems in a store. “Because we’ve had most of the names for more than a year, we have a sense of what works for those names,” Tifft says. He notes, however, that no behavioral information is attached to individual names; it’s aggregated to groups. “We are absolutely within industry norms for privacy,” he says.
Knowing what the consumers in the e-mail database will respond to is a relatively new development in the e-mail marketing business, Tifft says. “There are any number of companies who can claim they have 25 million names in their database,” he says, “but very few can claim that they are managing that database to the customer experience.”
Understanding what motivates consumers and having the right list with the right ingredients will be a key part of 24/7 Real Media’s success, Tifft says. “It will be critical to enhance the quality of the list and move toward a more qualified e-mail user and away from thinking that a name is a name is a name,” he says.
That trend is already developing as marketers gain a better understanding of how e-mail marketing works. “Users are becoming more sophisticated,” Tifft says. “They’re more used to doing e-mail marketing, they know what will work and so there’s not as much testing.”
Soon, retailers will be looking more and more at the return they attain on their marketing investment, Tifft says. “It used to be about capturing names with no need to target,” he says. “But now it’s becoming a direct marketing business and everyone’s doing ROI.”
Growing numbers of e-mails, increasing numbers of consumers getting e-mail addresses and retailers growing more sophisticated in their use of e-mail marketing may all point to a maturing market, but there’s plenty of opportunity left, Talavera says. Among the challenges that will continue to face the industry, she predicts, will be the need to maintain current e-mail addresses in a market where the average e-mail address changes every year; large corporations’ increasing filtering of employee e-mails, which will cause consumers to switch e-mail addresses to personal accounts; and the consolidation of e-mail addresses as consumers react to higher prices that e-mail services will charge. “Once marketers get good e-mail coverage, they’ll still have to maintain the lists to keep them current,” Talavera says. “There will be some segments that will always need this service.”