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GUEST COMMENT Email marketing: what retailers can learn from other sectors

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Email marketing is proven year-after-year to be an extremely important channel for retailers, those doing it right enjoy not only more business, but both higher customer engagement and satisfaction levels. But how exactly is email marketing used by retailers, which areas are showing successes (and failures) and what can this sector learn from its peers?

Because digital marketing has evolved over the last decade, bringing email marketing into its centre, email has shown a spectacular growth compared to other channels in the marketing mix. Using data collected for the Adestra/Econsultancy Email Marketing Industry Census 2016 – a survey of over 1,100 digital marketers around the world – we have drilled down to sector level, analysed tactics and strategy, so making the data more useful for marketers. This way marketers can learn from each other and even cherry pick (and test) good ideas that already work in other sectors.

ROI is the key stat

Showing a return to form, retailers are seeing an impressive ROI from email marketing. 82% say ROI is excellent or good, well above the industry average as a whole (see Fig.1). It’s worth noting that two sectors have pipped them to the top slot however: travel and hospitality and charities, government and NFP.

Fig.1 How do you rate the email channel in terms of return on investment?

(Results show Excellent or Good)

However, it’s not all roses, retail performance is distinctly ‘middle of the road’ in many areas. Directly plotting sales against investment budgets shows that overall email still punches above its weight for every sector. Retailers achieve 21% of their sales from email marketing, yet only spends 13% of its total budget to achieve this – which is slightly below the industry average.

Confidence, it appears, has never been higher in email marketing overall. All sectors have seen a lift in their own email performance from 2015, some considerably more than others (-when asked How do you rate the performance of your company’s email campaigns?). However, retail email performance has slipped back in recent years relative to other sectors. Having topped the charts two years ago, firms in this sector are currently in fourth position, just a single per cent above the industry average.

In the last 12 months alone, we’ve seen other sectors adopt new email tactics and practices that enable them to ‘harvest the low hanging fruit’ and adopt best practices to close the gap on the industry leaders in performance terms, and even overtake them.

Innovating with email

Innovation in email marketing is vital – it explains how this channel has adapted to stay at the top of ROI charts year after year. No other channel drives more return if you keep innovating, improving and following best practice guidelines.

With an eye on the future, retailers are the most innovative sector (see Fig.2), and feel most strongly about innovating with ‘creative behavioural triggers’ and a ‘greater use of dynamic elements (video content, GIFs, countdown clocks etc.)’, as well as ‘using the email address as an identifier on external platforms’.

Fig.2 How do you intend to innovate with email over the next 12 months?

Retail mobile strategy

Given the growth in mobile usage, building a strategy to satisfy consumers is critical. With such a consumer-focused audience and the engagement potential that mobile affords, optimising email for mobile should be an area in which retailers are leading by example. On the contrary, as Fig.3 illustrates, while they had shown progression in 2014-15, this has dropped back slightly this year to 24% while the leaders are continuing their upward trajectory – travel and hospitality (32%) and print/publishing and media (33%). Retailers do still remain above average in this respect. Putting this into context, retail customers are faced with three quarters of companies without a clear mobile plan. So most readers will see average email rendering and likely a poor mobile experience – representing a huge opportunity for improvement, and raising engagement.

Fig. 3 How would you describe the extent to which your company has a strategy for optimising email marketing for mobile devices? (showing ‘quite’ or ‘very advanced’)

What can retailers learn?

Choosing which tactics to prioritise (and which to defer) is a crucial decision that directly impacts results. Keeping focus on these and ensuring they are refreshed and up to date is not easy; Retail has dropped from third to fifth spot and this could be one reason that explains the mediocre performance. Conversely, both charities and travel/hospitality have seen ROI and performance shoot up as they adopt new email tactics – notably remarketing, content personalisation, behavioural targeting, advanced segmentation and transactional email for marketing.

Drilling further into the data shows what has changed since last year for Retail. The tactic that has shown the biggest percentage drop is ‘sharing on social media channels’ (this is down 22% from last year) – perhaps this means that social media marketing is showing diminishing returns. In addition list cleansing is down 13% in just 12 months – it’s important to keep on top of the basics of good marketing practice, this being one.

With the EU General Data Protection Regulation (GDPR) being applied in 2018, and forthcoming UK legislation that will meet the same regulations, email marketers are going to have to change how they operate, particularly in terms of dealing with the new requirements for ‘explicit consent’ as well as the ‘right to be forgotten’. Retailers quickly need to get on top of the implications, as currently 26% of retailers are not aware of any legal changes that might affect their activities. Additionally, two-thirds admit their practices are not yet compliant with EU law changes – which is a cause for concern. Changes for businesses entail having to remodel their workflows and processes to ensure compliance (such as data collection, CRM, and providing audit trails).

Despite an impressive ROI from email and strong results in previous years, many aspects of the retail sector’s performance are largely middle of the road; however, the sector has a great future potential if it can focus its efforts. Marketers must use the experience and successes of their peers and look at the opportunities, services and tactics available to really make the email channel work harder for them. Experimenting, testing and innovating have been key to successful email marketing over the last decade, and will continue to be so.

Visit here for a full copy of the Email Sector Report 2016.

Jennifer Watkiss is head of marketing communications at Adestra

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