Email remains among the simplest and most cost effective ways to reach consumers, delivering ROI of up to 3,800 percent, according to the DMA. We’ve all heard about how personalized emails can increase conversion rates, basket size and so much more, but what happens when an email is designed to reach a new potential customer for the first time?
To guide CMOs and CFOs on how to make the most of their email marketing programs, RSR Research and Coherent Path set out to discover the general practices that can make or break a retailer’s email strategy.
“We conducted this research from the point of view of the consumer,” says RSR Research managing partner Steve Cowen. “We didn’t pretend to have the right answers going in.”
RSR and Coherent Path analyzed nearly 140 retailers on the Internet Retailer Top 500 list, exploring specific email elements that could indicate where retailers are over- and under- investing in their subscriber lists — leaving money on the table.
The resulting report, Measuring Email’s Effectiveness, evaluates top retailers across three main categories: email frequency, catalog exposure and email content. RSR used a third-party tool, MailCharts, to gather all emails a retailer sent to an “unknown” or generic user (ie, someone not subscribed to a retailer’s loyalty program, who hadn’t registered any click-throughs or preferences) over a defined period of time in order to score each retailer’s performance across categories.
The results were often eye-opening. Just six retailers — Sport Chek, GNC, Timberland, H&M, Zappos and Beachbody — send 100 percent of emails optimized for mobile. Shockingly, 83 percent of retailers don’t send any mobile-optimized emails at all.
While this may seem “inexcusable” in our mobile-centric world, Rowen says organizational siloes may be the culprit. “Some retailers are so segmented that they might have a mobile experience that’s fantastic and a desktop site that’s lackluster — or vice versa,” he explains. “As a retailer, the experience you’re putting out there should be ubiquitous. It shouldn’t be great in one channel and not in another.”
RSR Research managing manager partner Nikki Baird, who spearheaded the project, says this report is an objective first step in critically examining retail email strategies. “Despite this being an incredibly profitable channel for retailers, the vast majority received the equivalent of a failing letter grade and even the top performers have room for improvement with their C+ scores,” she says. “No matter the individual grade, retailers would do well to consider how factors such as frequency, catalog exposure and content are impacting their email campaign strategies.”
According to Rowen, it’s “no surprise” that 120 retailers received what amounts to a failing grade. “There’s no real link between what email’s real power is and what it means to a consumer,” he explains. “Retailers should see these results as a benchmark, and more forward-thinking retailers should say, ‘now I know what I can do differently.’”
The retail brands that earned the highest score out of 100 points are:
Club Monaco (79.9)
Crabtree & Evelyn (76.8)
BCBG Max Azria (76)
Hudson’s Bay (75.1)
What top-scoring email programs have in common
First and foremost, highest-scoring retailers were mindful of email frequency, sending an average of one email daily. The top five retailers, listed above, averaged 32.7 out of 33.3 possible points for email frequency vs. an overall average score of 21.0.
Many high scorers also included multiple product categories per email to ensure the greatest possible reach in the event that the main/featured content was unappealing to the reader.
Leaders also tended to avoid subject lines that were too heavily promotional.
Chart leaders: apparel brands
Apparel retailers led all verticals with the highest average score of 57.6, and excelled in email frequency (23.5 of 33.3) and email content (16.2 of 33.3 – tied with big box specialty retailers).
How do pure-play e-commerce companies fare against multichannel?
Despite their wholly digital existence, pure-play etailers stumbled when compared with their multichannel brethren operating both digital and physical storefronts. RSR found that online retailers promote either too much or too little, with a median score for emails with or without discount and promotional language at 48 percent vs. 41 percent for multichannel retailers. That could be because these digitally native brands must fiercely protect their email lists since they can’t rely on foot traffic to drive sales. And without stores to act as showrooms, etailers need to use email as a vehicle to expose more of their product catalog to a larger audience. At the rate they are going, it would take 3.51 years to expose their full catalog to a single shopper, compared to 2.53 years for multichannel retailers.
Given how much content bombards us every day, a lot of very smart people are studying the “attention economy” to identify the right strategies for engaging with consumers. “We’ve reached an oversaturation point,” explains Rowen. “You have to pick and choose what you pay attention to.”
And what catches the consumer’s eye as she scrolls through her inbox? A relevant subject line. “What’s interesting is the direct relationship between categories in the email and the subject line itself,” says Rowen. “We penalized retailers when there was a disconnect between the subject line and the content. You can’t clickbait people and you can’t bury the lead. You can’t make them scroll down too far to find what’s referenced in the subject line.”
The full report includes a ranking of the top 50 highest scoring brands, the top three brands in each industry vertical and the top three brands in each category: email frequency, catalog exposure and email content. What’s more, the report offers guidance for retailers on the journey to elevating their email marketing strategies and performance.
“With heavy-hitters like Amazon gaining a huge piece of e-commerce’s marketshare, retailers simply can’t afford to ‘mail it in’ when it comes to their email strategy,” said Coherent Path CEO James Glover. “This first-of-its-kind research on the practices that make a successful email program paired with the availability of our custom email effectiveness reports arm brands with a much-needed reality check on where they stand, and actionable ways to improve their email strategy.”