E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
E-mail marketing companies and web analytics vendors are merging their services so e-retailers can send the right e-mail marketing message to exactly the right prospect.
Marketers have long aspired to one-to-one marketing, sending the perfect pitch to a customer based on her individual interests at the moment she`s most inclined to buy. And though the task of compiling and capitalizing on the data needed to support true one-to-one marketing keeps it an illusive goal, marketers continue to try to reach it. "It`s the continuing pursuit to find the right message at the exact moment when a customer will convert to a sale," says Heather Blank, director of e-commerce and business development for Petco Animal Supplies Inc.
Blank and other marketers are finding that one-to-one marketing is finally moving within reach thanks to the integration of web site analytics and e-mail marketing applications. By using site analytics tools to compile and analyze data on shoppers` activity, then using that data to drive targeted e-mail marketing campaigns, marketers can create campaigns that drill down to smaller segments of shoppers based on information compiled from virtually limitless measurements of customer activity.
More repeat buyers
Marketers can measure, for example, how recently and frequently shoppers browsed for a particular type of product, and if and how often they abandoned a shopping cart, made a purchase, or came back later to buy something else. And with that information integrated into an e-mail campaign management application, they can send e-mail marketing messages designed for consumers based on particular sets of shopping and browsing behavior. To continue the cycle of analytics and marketing, marketers then use the same set-up to analyze how customers responded to those targeted e-mails and use that information to better design subsequent campaigns. And so on.
"We`ve definitely seen an increase in repeat buyers and revenue due to our e-mails," says Jason Roussos, senior vice president of strategic development at CompactAppliance.com, which began experimenting about a year ago with combined site analytics/e-mail, earning back the cost of the system in the first nine months.
Combining site analytics and e-mail campaigns may not yet be true one-to-one marketing, but it`s closer to it than marketers have ever been before--and it is taking marketing to a whole new level. Retailers now face the challenge of having more data than they know what to do with, but as technology does the grunt work of gathering useful customer information, they`re now able to concentrate more on designing the most effective marketing campaigns. "It`s a great opportunity and it makes my job more challenging," says Jeff McCall, vice president of customer relationship management at GSI Commerce Inc., which operates web sites for more than 40 retailers, including Tweeter Home Entertainment Group`s Tweeter.com, The Sports Authority`s TheSportsAuthority.com and Kmart Corp.`s Kmart.com.
Combining web site analytics with e-mail marketing programs is still in the early stages and only a few retailers are providing details on how they`ll implement it. But the trend is gaining steam, as major site analytics vendors and e-mail services providers work to integrate their technologies and retailers begin to see results of highly targeted e-mail campaigns. Among 52 users of web site analytics tools surveyed by Forrester Research Inc. earlier this year for its June report "What Matters to Web Site Analytics Users," 49% said the use of site analytics data was important for analyzing and generating e-mail campaigns.
Supporting the work that CompactAppliance, Petco, GSI and other retailers are beginning to do in combining site analytics and e-mail is a high level of competition among site analytics providers. Market leaders including Coremetrics Inc., Omniture Inc. and WebSideStory Inc. are all taking steps to expand their technological capabilities vis-‡-vis complementary marketing applications from leading e-mail providers like Responsys and CheetahMail.
With site analytics almost becoming a commodity, industry experts say, analytics vendors have no choice but to expand capabilities--and the expansion of choice is into marketing applications. "All analytics companies want to be in marketing interfaces," says Eric Peterson, web site operations and technology analyst for Jupiter Research. "They`re all frantically competing with each other and prices are falling, so they`re trying to figure out what they can do to be on top."
And it isn`t only the market leaders that are winning over retailers. CompactAppliance, after finding the services of Coremetrics and Omniture too expensive for its marketing budget, decided to go with Manticore Technology Corp., a 4-year-old company that offers its own built-in analytics and e-mail capabilities. Others are also making technology inroads. For instance, online marketing services provider DoubleClick Inc. recently introduced its integrated SiteAdvance analytics tool, and search engine marketing company OneUpWeb recently introduced its ROI Trax.
The integration of site analytics technology into e-mail applications is part of a broader trend that is also pushing site analytics into integrating with other marketing applications, including site search and comparison shopping rating services. (See "Site search technology`s new goal: Making e-retail web sites think," Internet Retailer, June, 2004). "Coremetrics and others want marketers to always turn to them for the success of online marketing activities," Peterson says. "They`ll tell retailers to send their message through CheetahMail or some other e-mail services provider, but measure its impact on sales with their site analytics."
While Omniture and Coremetrics have already made inroads in working with e-mail campaign management systems from companies like Responsys, E.Piphany and @Once, WebSideStory may be upping the ante with its recently announced IPO. Although it hasn`t said specifically how it will use the targeted $57.5 million it hopes to raise, it has said it will use the proceeds to acquire new technological capabilities. "Omniture and Coremetrics have to decide how to answer that," Peterson says. "The problem will become how to differentiate themselves in the analytics market for more than six months."
That`s good news to marketers, who can expect to see analytics vendors continue to improve and expand their offerings to stay competitive. "In 2004 and 2005, especially if WebSideStory is successful with its IPO, we`ll see a dramatic uptick in these kinds of relationships between analytics providers and e-mail marketing technology," Peterson says. (WebSideStory was unable to comment for this article because it was still in a government-mandated IPO quiet period.)