E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Simple but effective tactics help retailers get their e-mails read by consumers.
To get more utility out of its e-mail list, vitamins and supplements e-retailer Natural Partners Inc. was looking for ways to increase its e-mail marketing campaigns' open rates. Last November, it decided to try limited-time daily deals, making them available only to shoppers who subscribed to an e-mail list specifically for these offers.
The merchant encouraged consumers to subscribe to the e-mails in the weekly e-mail it sent to consumers on its general e-mail list. It also generated a list of customers who opened Natural Partners' weekly e-mails most often and sent them a message saying it was their last chance to register for the limited-time daily deals.
Then Natural Partners began sending the daily-deal e-mails to the special list it created. Open rates for the e-mails were high—one of the e-mails registered an open rate of 76%, the e-retailer says. It credits the appeal of daily deals and the ability to segment a list based on consumers' open rates for the success. Natural Partners used services from digital and mobile marketing firm Knotice Ltd. to segment the list.
"We found out the accounts that most often opened e-mails were generally our online purchasers, and they preferred to be contacted through e-mail," Brittany Johnson, marketing manager at Natural Partners, says. "The daily-deal e-mail blasts worked well for us because not only did we have the right audience, but we also only ran the daily deals for a very short amount of time."
The deals themselves were successful beyond just the high open rates, Johnson says. Consider the results for one of the daily-deal e-mails: Natural Partners sent 649 e-mails and subscribers opened 308 for an open rate of 47.46%. The e-retailer typically sells seven units per day of the product highlighted in the e-mail but sold 128 at the deal price, a 1,729% increase in sales. These open and response rates are typical for Natural Partners' daily-deal e-mail offers, Johnson says. She declines to reveal what Natural Partners pays Knotice for the e-mail marketing and customer profiling systems.
Key performance indicators
To be successful in e-mail marketing, marketers must ensure their e-mails are delivered to customers' inboxes without incident and convince customers to open the messages. The U.S. retail industry average marketing e-mail delivery rate is 96%, according to a 2012 study by e-mail marketing services provider Return Path Inc. The average open rate for North American retail industry marketing e-mails is 20.5%, according to a 2012 study by e-mail marketing services provider Experian CheetahMail.
The yardstick for e-mail deliverability used to be measured by whether recipients flagged messages as spam. Too many spam flags and the providers of e-mail services to consumers, such as Yahoo, Google, Microsoft, Comcast and others (typically referred to anachronistically as Internet service providers, or ISPs, even though they don't necessarily provide a consumer's Internet service) would block a sender's messages. But the simplicity of that cause and effect led marketers to game the system, bloating their subscriber rolls with subscribers who didn't complain but were not engaged.
ISPs today measure how customers engage with the e-mail messages they deliver, such as the open rate, and that plays a role in deciding whether they'll deliver future messages from the same sender, experts say. To entice consumers to open their messages, marketers are using varied strategies, including daily deals, segmenting, timing, personalization and special symbols in subject lines.
Managing the inactive
"It's a new world for deliverability," Chad White, principal of marketing research at e-mail services provider ExactTarget, says. "You have to manage inactive subscribers."
At chain apparel retailer J. Jill, e-mail marketing manager Kate DeLanders has launched an automated program that seeks permission from inactive subscribers (she declines to reveal what percentage of her list is inactive) to send them e-mails, even though it already has permission from when the subscribers first signed up.
J. Jill, which uses e-mail marketing services and technology from Responsys Inc., turned to this tactic to weed out inactive consumers and make its list more active and engaged, which is what the e-mail inbox providers are looking for.
"They are not active at this point. It will hurt us a lot more if we keep sending them e-mails," DeLanders says. "The Internet service providers want to make sure our IP address is sending to people who are actually opening and clicking and engaging with our e-mails. So this is a proactive approach. It's like flossing: No one wants to do it but you must to stay healthy."
Once a merchant successfully delivers an e-mail, the next step is to get the consumer to open that message. For J. Jill, timing turned out to be key to better open rates.
With the system it was using prior to Responsys, J. Jill sent out e-mails in batches every few days. The merchant was running remarketing campaigns, e-mailing customers who abandoned carts or browsed products on the site but left without taking any action. But because the previous system, which DeLanders declines to name, was oriented toward batching e-mails every few days, a cart abandonment e-mail could hit a consumer's inbox a few hours after that consumer left or a few days later.
Responsys switched J. Jill over to daily e-mails and the merchant saw immediate success.
"Relevancy was really crucial with these messages," DeLanders says. The new schedule produced a 3.6% lift in cart abandonment e-mail open rates and a 24.2% lift in open rates for e-mails sent to consumers who only browsed the site.
Having these two types of e-mails arrive much closer to the time a customer abandoned a cart or browsed the site made all the difference, DeLanders says.
She says it is not clear if the increased open rates had an effect on J. Jill's delivery rate, which she says has always been very high. "We'll immediately remove a subscriber if they are deemed undeliverable," she says.