metrics from 400 retailers: what drives the most revenue?
DESCRIPTION
Retailers know that email is generally an effective mechanism for driving sales. However, 20% of potential sales are being lost because retailers do not know how to leverage email to drive the highest revenue and lifetime value from their customers. We will share data, email tactics and strategies supported by our client base of over 450 retailers that illustrate which best practices are really performing in 2013: What specific categories of email are delivering the highest sales and revenue for retailers in 2013 How, where, and when to use email strategically across the shopper lifecycle What consumers are telling retailers about their desires for desktop and mobile email communications Quantitative results you should strive for based on the achievements of your peersTRANSCRIPT
Metrics from 400 Retailers: What Drives the Most Revenue? Best practices to maximize revenue and customer lifetime value through email marketing
KEY TAKEWAYS
Email continues to be a top driver of revenue for retailers
Adding customer-centric marketing to your email strategy can drive substantially higher conversions and revenue
Always ask yourself….“what would Julie do?”
A TALE OF ONE CITY (AND TWO GREAT COMPANIES)
What’s common?
Maniacal focus on the customer
THE JEFF BEZOS IMPERATIVE – THE “EMPTY CHAIR”
Ensure the customer is always represented
WHY THE IMPERATIVE TO BE CUSTOMER-CENTRIC?
► Accounts for 25-35% of all ecommerce
► Grew revenues by $13.9B last year
► Spent $2B on technology last year
$13.9B
Amazon
2012 Growth
$14B
497 of IR Top 500
2012 Growth
THE NORDSTROM IMPERATIVE – “BLACK BOOK” CLIENTELING
Treat each customer as an individual
“WHAT WOULD JULIE DO?”
+ Hi, I’m Julie
CURRENT STATE OF CUSTOMER-CENTRIC MARKETING
HOW DO CONSUMERS FEEL ABOUT IT?
WHAT CAN RETAILERS DO?
WHAT APPROACHES WORK BEST?
2013 - 5TH ANNUAL CONSUMER STUDY
HOW DO CONSUMERS FEEL ABOUT 1:1 INTERACTIONS?
Source: the e-tailing group
TOP REASONS CONSUMERS SAY THEY ABANDON
Source: the e-tailing group
You must stay engaged until the consumer is ready
to purchase
1
2
3
Warning: Amazon will stay engaged – if you don’t, you are giving up
AND CONSUMERS WANT YOU TO STAY ENGAGED
3 out of 4 consumers want personal email alerts as part of an integrated cross-channel shopping experience
Source: the e-tailing group
CONSUMERS INCREASINGLY VALUE 1:1 CONVERSATIONS
53% 66%
51% 64%
37% 44%
41% 34%
35% 39%
25%
25%
19%
21%
11%
RETAILERS WHERE I SHOP PERSONALIZE MY EXPERIENCE
RECEIVE PERSONALIZED EMAILS FROM RETAILERS
VALUE RETAILERS WHO PERSONALIZE ACROSS CHANNELS
PURCHASE MORE BECAUSE OF PERSONALIZED EMAILS
PURCHASE MORE BECAUSE PRODUCTS RECOMMENDED
2013 2012 Source: the e-tailing group
Current State Of Customer-Centric Marketing
HOW DO CONSUMERS FEEL ABOUT IT?
WHAT CAN RETAILERS DO?
WHAT APPROACHES WORK BEST?
Best Practice: Three emails – within 24 hours, day 2 and day 7
SITE ABANDONMENT CART ABANDONMENT
• You leave an item in your cart
• What would Julie do?
• She’d reach out to you and remind you
• She’d offer the product abandoned, but also an up-sell, and maybe even a down-sell
• She’d repeat this process a couple of times, maybe even with a special offer on the last attempt
• You leave the site empty-handed
• What would Julie do?
SITE ABANDONMENT
• Does she recognize you?
• She’d look at how engaged you were
• She’d recognize categories and products of interest, and depth of interest
• She’d send you a personalized email with a mix of products
Benefit: Site abandonment alerts deliver 16 times greater reach than cart abandonment alone
PURCHASE AND SHIPPING CONFIRMATION
• You just checked out and are receiving your order confirmation
• What would Julie do?
Bottom Line: These types of emails have the highest open rates of anything you send – don’t waste them!
• She’d look at what you bought
• She’d assess your interests and past shopping behavior
• She’d offer complementary products for cross-sell that match your interests + purchase
NEW PRODUCTS OF INTEREST NEW PRODUCTS OF INTEREST
• A new product arrives in the catalog
• What would Julie do?
Benefit: 2-3X Average Email Conversion Rate
• She’d look in her little black book and find all clients with an interest in this type of product
• She’d call each one individually and invite them to come back
• She’d be waiting with that product and others that each customer most wants to buy
ADVERTISING AUGMENT EMAIL WITH DISPLAY ADVERTISING
• You are no longer opening their emails?
• What would Julie do?
• She’d try to engage you in other ways, perhaps a display ad?
• She’d show you products of interest, products recently abandoned, etc.
• She might throw an offer out to entice you back
• She’d spend only what is necessary…
Current State of Customer-Centric Marketing
HOW DO CONSUMERS FEEL ABOUT IT?
WHAT CAN RETAILERS DO?
WHAT APPROACHES WORK BEST?
CUSTOMER-CENTRIC EMAIL OUTPERFORMS INDUSTRY AVERAGES
19% Higher
2X Better
3X Lower
Customer Centric Industry Average Customer Centric Industry Average Customer Centric Industry Average
EFFECTIVENESS INCREASES OVER TIME
Wine Enthusiast
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00% Ja
n-0
8
Ma
r-08
Ma
y-08
Jul-0
8
Sep
-08
No
v-08
Jan
-09
Ma
r-09
Ma
y-09
Jul-0
9
Sep
-09
No
v-09
Jan
-10
Ma
r-10
Ma
y-10
Jul-1
0
Sep
-10
No
v-10
Jan
-11
Ma
r-11
Ma
y-11
Jul-1
1
Sep
-11
No
v-11
Jan
-12
Ma
r-12
Ma
y-12
Jul-1
2
Sep
-12
No
v-12
Jan
-13
Customer Centric Email Revenue Performance Index
Time Period: January 2010 to December 2012.
$159
$375
$760
$-
$100
$200
$300
$400
$500
$600
$700
$800
1 2 3
Ave
rag
e C
ons
ume
r Sp
end
Number of Engaged Channels
Avg Consumer Spend 5X improvement
MORE CHANNELS, THE HIGHER LIFETIME VALUE
PRIORITIES, PRIORITIES…
ATTRACT
CONVERT
NURTURE
Top seller emails
Abandoned site & cart email Order confirmation
Shipping confirmation Post-order follow-up
New products of interest Pricing / offer changes Seasonal newsletters
Sales / promotions
1
2
3
4
5
Email Best Practice in Action Sports Unlimited
Mike Neff, Director of eCommerce
Sports Unlimited - Background
History
• Started 1983 with one brick-&-mortar store • 1998 went online • 2008 shut down brick-&-mortar
Challenges:
• Site traffic is declining; acquisition costs are high
Main Areas of Focus 2013:
• SEO (lost traffic) • Site conversion rate (conversion testing) • Refocusing on customer loyalty
Ongoing Strategies:
• Bronto segmented emails • MyBuys web recommendations and email alerts
POST CART ABANDONMENT PRODUCT ALERTS
• Sent 2x weekly • Automatically segment to individual
subscriber
PERFORMANCE METRICS
Sales Growth:
Cost Per Acquisition: pay for sales you receive
Customer Loyalty:
100% Increase
(2+ purchases)
50%
33%
0%
10%
20%
30%
40%
50%
60%
Revenues
2011 2012
ORDER CONFIRMATION EMAIL
SITE ABANDONMENT ALERTS
• Sent after consumer leaves the site
• Targets consumers while they’re still in shopping mode with products and offers they were browsing
• Identifies infrequent shoppers in the house list, bring them back to buy.
Q & A Sports Unlimited
Mike Neff, Director of eCommerce
MyBuys
Chip Overstreet, SVP Business & Corporate Development
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