Leading Retailers Lack Effective Email Personalization Strategies

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Most of today's top Internet retailers fail to leverage consumer persona data when sending post-purchase email campaigns, thereby reducing click-through rates and the likelihood of follow-up sales.
Marketing

Because consumers are increasingly aware of the technologies brands have at their disposal, shoppers now expect retail messaging to be tailored to their individual interests. But, while companies consider personalization to be an important element of their overall business strategy, few marketing leaders have yet to move beyond transactional data in an effort to deliver such messages.

SimpleRelevance's "Email Fail" report examines the average online retailer's successes and shortcomings with regard to email personalization in order to demonstrate where leading brands lag. Thus, researchers analyzed the email campaigns of 20 top Internet retailers, as outlined by the 2013 Internet Retailer Top 500, to determine how effectively these companies leverage data-driven personalization capabilities.

Researchers began by creating two fictional customer personas-Sophia and Chet-to explore how companies leverage customer information, transaction history, and interaction data with regard to personalization. Sophia and Chet were both assigned email accounts and user attributes so researchers could adequately purchase goods from 20 leading Internet retailers. Each gender-specific item bought within the six-week period fell between $20-$40, and every transaction led Sophia and Chet to sign up for the given brand's email newsletter. Once complete, researchers then analyzed all subsequent emails based on product recommendations, image optimization, time of send, and other such criteria to see if said messages reflected the individual's traits and preferences in any way.

Overall, these top Internet retailers failed to perform at peak levels. Researchers even had to remove Walgreens, Sears, and CVS from their data set because these leading brands failed to send any post-purchase promotional emails, ultimately leaving 17 companies to evaluate.

The following statistics emphasize where most retailers lag, thereby highlighting the strategies that, with some work, could help these top brands maintain their leadership positions:

  • Of the 418 total emails received, only 37 offered personalized product recommendations. While 78 messages used phrases such as 'items just for you' and 'recommended for you' to imply personalization, more than half contained generic content.
  • Overall, 104 of the emails evaluated didn't include any product recommendations. Of those emails, 16 featured product feedback requests (i.e. ratings and surveys) on items they'd ordered.
  • Forty-six percent of recommendations received were generated on an individual basis, while 56 percent were delivered based on categories. Only 10 percent contained personalized images, with 19 emails failing to include any images at all.
  • Because most shoppers only click through emails during one hour each day, said Magic Hour differs for every user. However, only 4 of the 17 companies evaluated sent messages during Sophia and Chet's predetermined period of 9-10 a.m., thus garnering increased click-through rates.
  • Of the emails sent late in the day, nearly 35 percent contained daily deals, rendering them useless if unopened until the next day.

Key takeaway: To expand upon their overall findings, researchers created two alternate personas-Bob and Rhonda-to determine how the companies in question treat inactive users. Bob and Rhonda signed up for each retailer's email newsletter, but neglected to engage any further. By the end of the study, researchers noted no definitive difference between how retailers treated the active and inactive. None of the 17 companies observed altered their email send frequency based on interactions in any way, reemphasizing the average retailer's failure to personalize the email experience. Customer data exists right at these retailers' fingertips, yet few have integrated said insight to support strategic development. From behavioral patterns to product preferences, customer data offers companies the tools they need to sustain growth and cultivate relationships, as such insight enables retailers to target the consumer's interests directly. Thus, companies must use this information to adjust email campaigns accordingly and establish strategies that cater to the individual, for that's what personalization is all about.

EXPERT OPINION
EXPERT OPINION