E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
The e-mails have a 7.6% conversion rate.
If you boil down the strategy behind premium products manufacturer and retailer WWRD US LLC’s efforts, it’s pretty simple and anything but unique, Joe Schmidt, WWRD’s director of e-commerce, the Americas, says. “Get our customers to shop more and spend more,” he says.
But for WWRD and its three brands—Waterford, Wedgwood and Royal Doulton—that’s proven difficult because it has a large number of customers who buy from one of the brands, then don’t return for a while, if ever again.
That’s why the week before Thanksgiving the retailer began using LifeCycle Grid, a new product from e-marketing vendor Listrak aimed squarely at reengaging shoppers via e-mail and encouraging them to buy again from a retail web site.
The product enables WWRD to group its customer base, based on how recently and how often they buy. For instance, it grouped together customers who have bought once or twice on one of its sites in one bucket, three to four times in another bucket and five or more times in a third bucket. WWRD then created a second grouping based on when customers made their last purchase—for instance, within the last 30, 60, 90 or 365 days.
Once the retailer defines the groups, the system automatically sends e-mails that feature a discount offer at specified trigger points. For instance, the system might send an e-mail when 365 days have passed since a one-time shopper made her last purchase, or when 60 days have elapsed since a more regular customer last bought an item.
The e-mails have a 7.6% conversion rate, says Schmidt. That would be 280% higher than Internet Retailer Second 500 Guide’s estimate of a 2% average conversion rate on http://na.wwrd.com. Moreover, the average order is 37.9% higher than typical orders on the sitE, he says. Internet Retailer estimates in the that the retailer’s average ticket on the site is $300. WWRD declines to disclose its conversion rate or average order.
80% of all the orders stemming from LifeCycle Grid e-mails, and 75% of all revenue, come from shoppers who have only bought from WWRD once or twice and whose last purchase was at least 365 days ago, says Schmidt.
The success of the campaign is one reason WWRD increased its spending on e-mail marketing in the fourth quarter last year 14% over the same period a year earlier (Schmidt declined to share the cost of LifeCycle Grid). That followed similar increases that ranged from 10% to 15% throughout the previous three quarters.
E-mail, says Schmidt, generates a higher return on investment than paid search, affiliate marketing and comparison shopping engines. “Our strategy has been to take everything we had been doing in e-mail and do more of it,” he says.
WWRD is No. 840 in the Internet Retailer Second 500 Guide.