Online Retailers' Email Marketing Report Card: D+ Average
Our annual review of email marketing practices of major online retailers, "2011 Top Retailers Study: Benchmarks, Trends and Tactics for Better Marketing," is just out, and the findings are disappointing.
From basic practices such as welcome emails to more sophisticated cart abandonment recovery emails, too many retailers are still missing in action.
Our analysis looked at a dozen email marketing practices of Internet Retailer's Top 500 retailers. Following is a review of a few key areas:
1. Social Media Integration: "C+"
Incorporating social network links in promotional emails has not only gone mainstream - 78% of Top 500 retailers include social links, up from 60% in the 2009 study - it also has evolved.
Of the retailers including social links, 71% are incorporating "Like/Follow" links such as Facebook "Like" or "Follow us on Twitter." Another 11% are including only social-sharing links (share to social/share with your network), and 18% are including both Like/Follow and social sharing.
I found this evolution kind of fascinating. A few years ago, incorporation of social links was, of course, just beginning, but social sharing was a main approach as the "new forward-to-a-friend."
But because most email marketers forgot the key ingredient - creating email content that was shareworthy (http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=100168) - subscribers soon ignored these links much as they did forward-to-a-friend links.
So, they went running to the new kid on the block - the Facebook "Like" button. Using email to grow your Facebook, Twitter, YouTube and other social fans and followers is clearly a good use of the email channel. I think the next marketer challenge, however, is figuring out how to monetize or better integrate these social channels.
2. Abandoned-Cart Reminders: "D"
For many retailers, cart recovery emails are the first or second largest source of revenue from their email program. For some reason, however, the message still hasn't gotten through. Only 17% of the largest 500 online retailers send reminder emails when a customer abandons a shopping cart.
The low adoption rate might be a result of the additional things required to implement cart programs, including integration between the Web analytics provider or ecommerce system and ESP and use of sophisticated business rules.
But, given that the average cart abandonment rate is 60% to 70%, and some companies report average revenue per email of up to 100 times higher than their broadcast emails, can online retailers really afford not to implement these programs?
Among the retailers that do deploy cart recovery emails, the majority (76%) sends a single email. Only 4% send a series of three or more emails. While there is no magic right number, many retailers are having tremendous success with a three-part series.
The first "service-oriented" email is typically sent either within about an hour or 24 hours of abandonment, followed by a second 1 to 3 days later, and a third about a week later.
Cart-reminder emails also raise a common question I hear: to offer an incentive to bring the shopper back to the cart or not? In our study, 51% of retailers did offer an incentive in one or more of the reminder emails.
My recommendation: Don't offer an incentive in the first email, but then perhaps a modest one in the second email and your most aggressive offer in the final email of the series.
3. Opt-In/Opt-Out Processes: "D"
One third of top retailers allow new subscribers to select frequency, shopping or channel preferences during the opt-in process. Of those, shopping preferences (e.g., women's vs. men's apparel; camping vs. cycling) are offered most often (56%), followed by channel preferences (35%) and frequency (33%).
Another one-third (34%) offer alternatives to opting out when the subscriber clicks the unsubscribe link. Surprisingly, this was a decline from the high water mark of 40% in the 2009 study.
From where I sit, this is another poor showing from the most sophisticated retailers. We know that a high percentage of people that click the unsubscribe link simply want to receive fewer emails, modify preferences, change their email address or opt-in or out of your different email streams.
So, why are two thirds of retailers fumbling this most basic practice and giving their subscribers only the option of saying goodbye?
Use of welcome emails is another weak showing: 32% of retailers do not send a welcome email after opt-in. What's with that? In 2011, this number should be 100%.
Is it that IT and marketing are not in synch during this opt-in process? Is it that marketers have been asleep and don't understand the value of these first-touch emails that manage expectations and generate sales out of the gate?
Example: One of our clients uses a three-part welcome series and sees revenue per email that is 10 times higher than its average revenue per email from broadcast emails.
In the future, however, I see "on-boarding" emails replacing or supplementing welcome emails. These on-boarding programs immediately put new subscribers into a targeted series of emails with content and offers based on previous Web behavior and/or opt-in data.
If you are an online retailer, I'd love to hear how you've chosen which initiatives to move forward on versus pushing off to the future.
Until next time, take it up a notch.