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Personalization represents a significant opportunity for brands and retailers seeking to create a closer relationship with customers, yet most haven’t made much progress in this area.
Less than 10 percent of retailers claim to be “highly effective” at personalization, according to Exchange Solutions’ Retail Personalization report, and yet Gartner analyst Gene Alvarez believes that 2018 is the year that retailers with well executed personalization programs will outsell laggards by as much as 30 percent. Boston Consulting Group research, also cited in the report, indicates that companies incorporating personalization are already seeing a revenue lift of 6 percent to 10 percent.
Companies can use personalization to slash customer acquisition costs by as much as 50 percent, increase marketing spend efficiency between 10 percent and 30 percent, and juice revenues by 5 percent to 15 percent, according to McKinsey and Harvard Business Review research cited in the report. Last April, retailers indicated that real-time personalization (39 percent) was a higher priority than app-based marketing (38 percent), location-based marketing (34 percent) and virtual assistants (33 percent), according to eMarketer.
Email marketing remains one of the biggest vehicles for personalization, and CoherentPath set out to discover how retailers engaged customers in the first 45 days post-purchase, looking at customers who made a purchase and those who did not (but had given the company their email address). The goal: to determine if brands are personalizing how they market to “purchasers” versus consumers who had made themselves known to the brand but hadn’t transacted yet.
With an average score of 54.2, apparel retailers fared the best of all verticals, including sporting goods (51.2) and department stores (48.6). J. Crew was the sole apparel retailer—and one of just three overall—that scored above 70 points, and received high marks for keeping its email frequency close to the overall average (sending about one per day), matching the subject line to the email content most (75 percent) of the time, and leveraging the subject line to exposure product categories more than one third (34 percent) of the time.
The lowest score, 26.9, went to discounter T.J. Maxx for sending 80 percent fewer emails to customers who had purchased—and thereby engaged with the retailer—than those who had not.
In its “How 100 of the Top Retailers Engage Shoppers in the First 45 Days and Beyond report,” CoherentPath rated retailers on four metrics: the amount of emails sent to customers who purchased, the number of times the same emails were sent to both purchasers and non-purchasers on the same day, how many emails were sent exclusively to the purchasers, and the quantity of discounts offered to the purchasers.
Some brands, such as Tory Burch and Costco, dispatched no email beyond the customary order confirmations and shipping notifications, CoherentPath found, and just 26 percent of the time, apparel retailers’ emails were unique to the recipient.
On the email frequency metric, Free People earned a perfect score, and Anthropologie, Maurices and dressbarn also landed in the top five, for not overly spamming customers’ inboxes by sending close to the average of 0.96 emails per day, according to the report. More than 90 percent of the time, Victoria’s Secret and The Shopping Channel fired off two emails per day, while HSN, QVC, Patagonia, and Levi Strauss never sent more than one daily email.
Apparel retailers also led all verticals in how well they leveraged email to expose their total product catalogues and categories, according to CoherentPath, with Barney’s, Hudson’s Bay and Neiman Marcus earning perfect scores. It takes just a year on average for these retailers to exposure their entire catalogues, far lower than the three years it would take a third of all retailers. What’s more, they promote specific categories in more than 30 percent of their email subject lines, giving a shout out to subcategories more than 25 percent of the time.
Ann Taylor, Nike and Victoria’s Secret also performed well in this metric, taking an average of just 0.66 years to expose their catalogues. By contrast, QVC and Eddie Bauer never used subject lines to highlight categories while HSN and lululemon and rarely (less than 2 percent of the time) exposed categories in email content.
Although no retailer truly led in the “email content” category, Orvis, J.Crew, Dick’s Sporting Goods and Saks Fifth Avenue landed in the top five, with Orvis leading for its fully mobile-optimized emails and subject lines well matched to the content. Apparel retailers made significant year-over-year improvement in how often subject lines align with content, moving up to 55 percent from 43 percent.
Even more important, according to CoherentPath, retailers are shifting away from shamelessly promotional email subject lines. Though Land’s End’s subject lines called attention to a promotion or discount 75 percent of the time, just 42 percent of emails sent by apparel retailers highlight an offer, slightly over the 37 percent from the year prior. Overall, 39 percent of all retailers’ emails feature some sort of promo.
Retailers are making more of an effort to optimize for mobile as consumers increasingly access their inboxes from smartphones and other small-form-factor devices. CoherentPath found that 37 percent of all emails were mobile optimized, up significantly from just 17 percent in the last study. However, while 16 of the top 100 retailers always sent mobile-optimized messages, 51 never considered the mobile factor in their email marketing.
Email marketing messages are growing in length. Sixty three percent of retailers’ email require two scrolls or more to reach the end, and emails from Cabela’s, Dillard’s and Old Navy always require recipients to scroll two or more times, the report found.
In a separate study, Bluecore evaluated how retailers leveraged tailored emails along with the usual “batch and blast” approach. While an email calling attention to an abandoned product the consumer was looking at was the most likely to be opened (41.47%), customers were most likely to click through emails notifying users of a decrease in product price. Abandoned-cart emails drive the highest engagement (2.05%), highest revenue per email at $2.53 and greatest revenue per click at $16.29.
