E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
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Others focus on opt-in e-mail only. Novator Systems Ltd., which manages several retail web sites, including FTD.com and Warner Bros.’ WBShop.com, sends e-mail only to customers who have requested to receive it by accepting offers at the sites. Its most popular and effective e-mail marketing is a reminder service, under which customers choose to receive alerts about anniversaries, birthdays and other dates for which they need to buy gifts. And that kind of e-mail marketing, people like to receive. “In one day, the e-mail conversion rate at one of our sites went from an average 3%-5% to 28% as the result of a reminder service,” says CEO Mark Fox.
Just because customers have signed up to receive certain e-mails, though, doesn’t mean the retailer doesn’t have to continuously manage the list, experts say. “People forget,” Lewis says. “You have to constantly remind consumers why they signed up for e-mail in the first place.”
Another approach that retailers report customers responding to is e-mail promotions tied to specific buying behavior. “We’ve learned how customers responded to swimwear or sleepwear in the past, and then by segmenting our e-mail list based on purchasing behavior, we get a better response rate,” says Ken Weil, vice president of new media for Victoria’s Secret and the head of VictoriasSecret.com. “E-mail marketing is more effective for us now than it was a year ago. As we get smarter about how to approach our customers with e-mail, they respond better.”
Victoria’s Secret, which maintains a list of 6 million e-mail addresses, uses a hosted e-mail service from Digital Impact. It delivers huge amounts of e-mail customized to different groups of customers by shopping behavior, Weil says. “So it’s segmented to the right people at the right time,” he says.
Still others tie an e-mail promotion to specific products that customers have purchased. Hewlett-Packard Co., for instance, designs e-mail campaigns around the lifecycles of sold products. “If they sell you a printer, they know when it needs a cartridge, so they send out an e-mail message or newsletter based on what you bought, when you bought it and when you’ll need accessories for it,” says Lewis of Digital Impact, HP’s e-mail service provider.
Going 1 on 1
Developing a one-to-one relationship not only increases the chances that customers will open the e-mail and respond, but also is valuable in fighting the new spam filters that Internet service providers have implemented, experts say. While ISPs such as Yahoo and AOL won’t reveal what they base their spam-blocking on, for fear that spammers will learn ways to circumvent it, they are open to legitimate marketers who feel they have been unfairly labeled as spammers.
But retailers have to prove that they are not just dumping e-mail into random consumers’ mailboxes. “When spam became a problem and e-mail delivery portals began to address the issue, at first they did things crudely, and just said that anyone sending a lot of e-mail is bad,” says Weil of Victoria’s Secret. “In our case, they didn’t understand that the mail was from us for our customers.”
Armed with records of customers who had opted in to receive its e-mail, Victoria’s Secret took its case directly to ISPs. “We helped them to understand that we’re not part of the spam issue,” Weil adds, “but we had to go one on one, working closely with AOL and others.”
Yahoo uses an in-house-developed SpamGuard filtering system that automatically detects and then filters inbound spam into a Yahoo Mail subscriber’s personal bulk mail folder. Yahoo systematically places in the bulk folder certain types of e-mail widely recognized as spam, but it considers direct appeals from marketers who contend their e-mail is being unnecessarily blocked. In that case, it helps a marketer to have records of opt-in requests from customers.
Yahoo also encourages marketers to work directly with their customers to make sure customers are not inadvertently customizing filters to their inbox that block e-mail they’ve requested. Yahoo allows a user of its free e-mail service to create up to 15 customized filters to direct mail into personal folders. Subscribers to the Yahoo Mail Plus fee-based service can create up to 50 customized filters.
Yahoo e-mail users can also report suspected spam to SpamGuard by clicking on links to identify certain messages as spam. “The feedback we receive from these links plays an integral role in our continuous improvements to the SpamGuard system,” a Yahoo spokeswoman says. “Users are able to customize their spam-fighting efforts by blocking addresses, setting up customized filters and blocking HTML messages.”
Yahoo says it constantly upgrades its SpamGuard system to deal with the unceasing efforts of spammers to get around its filter, such as by adding jumbled words and letters to their messages so as to make key words less noticeable to filters. “Our team is constantly monitoring the various techniques spammers are employing,” the spokeswoman says.
But if retailers can work with ISPs to help them define spam, they’re up against another challenge when it comes to consumer-operated spam filters. For instance, Cloudmark, a San Francisco-based anti-spam software company, reports having signed up more than 300,000 users of its SpamNet system, which attaches to a user’s Microsoft Outlook application. SpamNet, which is available for free in its beta version at Cloudmark.com, enables users to click on e-mail they consider spam to have it permanently blocked not only from their own inboxes but also from the inboxes of other SpamNet users.
Using data collected through SpamNet, Cloudmark recently introduced SpamNet Beta 9, a version designed to block what’s known as ScrambleSpam, which uses large amounts of randomly jumbled characters to get through filters designed to block key words and phrases.
A number of virus software providers also are developing anti-spam software. Peter Firstbrook, analyst with researchers Meta Group Inc., reports that Trend Micro Inc., Network Associates Technology Inc. and Symantec Corp. are the leading contenders to have anti-spam modules within a year. Other software makers developing anti-spam applications include Computer Associates International Inc. and U.K.-based Sophos plc.