Commentary

More Retail E-Mail, But Delivery, Open And Click-Through Rates Lag

More Retail E-Mail, But Delivery, Open And Click-Through Rates Lag

Internet Retailer reports that even though pay-per-click advertising and social networking are gaining status in retail marketing circles, E-mail remains one of the best one-on-one marketing tools retailers can use to attract and retain customers.

The Internet Retailer latest monthly survey finds that merchants are expanding both the size and scope of their e-mail programs. The April survey of all subscribers of IRNewsLink, analyzed by Vovici Corp. finds that, of the 302 merchants taking part in the survey, 94.5% are building bigger opt-in lists and 64.7% are conducting more e-mail campaigns than a year ago.

The report says that 65.2% will increase the size of their opt-in e-mail lists between 10.1% and 40% this year

  • 4% expect to grow their file between 40.1% and 50%
  • 22.4% will expand the list by more than 50%
  • 8.4% say their list will expand by less than 10%

Only 28.8% of merchants in the survey maintain an opt-in list of fewer than 5,000 names.

  • 22.6% with a list of 5,001 to 30,000 names
  • 14.4% with 30,001 to 100,000 names
  • 19.9% with 101,000 to 750,000 names
  • 2.1% with 750,000 to 1 million names
  • 12.2% maintain more than 1 million names in their e-mail lists

But the Internet Retailer survey report says that many merchants still have flaws in their e-mail marketing programs that may result in fewer readers and customers. The survey reveals that only 40.2% of all merchants are delivering between 90.1% and 100% of their e-mail messages, with 19.1% delivering 80.1% to 90%. By that measure, only 59.3% of respondents have acceptable e-mail delivery rates.

Jordan Ayan, CEO of SubscriberMail LLC, says "The fact that more merchants aren't reporting better delivery rates tells me they aren't doing the right mix of list management and data analysis. If I had to grade... most merchants would only get a C on their report card."

Only 17.1% reported e-mail click-through rates of 15.1% or more.

  • 51.8% report click-through rates of 2.51% to 15%
  • 10.3% fewer than 2.5%
  • 20.8% that don't know

"With only average or below average open and click-through rates, retailers are clearly missing a key opportunity," Ayan says.

The Internet Retailer survey finds that 47.8% of merchants list increasing web sales as their main objective, followed by 17.2% who see customer retention as the top goal and 12.7% who use e-mail to attract new shoppers, 19.7% who want more multi-channel customers or higher tickets and conversions and 2.7% that don't know.

While the survey indicates that retail marketing managers are working to improve the effectiveness of their campaigns, many aren't paying close enough attention to conversion rates. 29.5% of respondents to the survey don't know their conversion rates from e-mails. Only

  • 4.5% of retailers have a conversion rate from e-mails of more than 10%
  • 27.9% have conversion rates under 1%
  • 25.4% have conversion rates of 1.1% to 4%.
  • 12.7% have conversion rates of 4.1% to 10%.

A low sales conversion rate is a key indicator that merchants need to adjust their approach to e-mail marketing. Today only 56.6% of retailers segment their e-mail lists, which could be segmented to identify recipients by demographics such as age, sex, annual income and past purchase histories to generate more effective campaigns.

Today, says the report, e-mail generates 1% to 2.5% of sales for 18.7% of all retailers in the survey and between 2.51% to 15% of revenue for 37.4%. But 20.4% of chain retailers, catalogers, virtual merchants and consumer brand manufacturers also cite e-mail as generating more than 15.1% of their total revenue, including 11.1% that count on e-mail messages and campaigns to drive more than 25% of total sales.

"E-mail will continue to grow as a marketing vehicle, particularly as direct marketers look at even higher postage rates," says Ayan. "But a bigger program won't necessarily deliver better results if a retailer just takes a one-size-fits-all approach. If only 60% of a campaign is being delivered, the other 40% is a huge missed opportunity."

E-Mail Open Rate(% or respondents)

 

All respondents

Store-based merchants

Catalog

Virtual Merchant

Consumer Brand Mfg

< 1%

2.8%

1.7%

1.7%

4.3%

0.0%

1-5%

11.4

12.1

12.1

9.4

18.2

5.1-10%

8.3

5.2

10.3

8.6

9.1

10.1-15

9.0

8.6

8.6

10.1

6.1

15.1-19

13.5

13.8

15.5

15.1

3.0

19.1-25

12.8

13.8

19.0

10.8

9.1

>25

24.2

24.1

20.7

20.3

36.4

Don't know

18.0

20.7

12.1

21.4

18.2

Source: Internet Retailer, April 2007

 

E-Mail Click Through Rate(% of respondents)

 

All respondents

Store-based merchants

Catalog

Virtual Merchant

Consumer Brand Mfg

1-2.5%

10.3%

12.1%

11.9%

9.1%

6.1%

2.51-5%

23.0

15.5

32.2

22.1

24.2

5.1-10%

19.2

17.2

16.9

20.0

24.2

10.1-15

9.6

5.2

10.2

11.4

9.1

15.1-25

8.2

8.6

13..6

6.4

6.1

19.1-25

12.8

13.8

19.0

10.8

9.1

>25

8.9

17.2

5.1

6.4

12.1

Don't know

20.8

24.2

10.2

24.7

18.2

Source: Internet Retailer, April 2007

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