Metrics from 400 Retailers: What Drives the Most Revenue?

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

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2.00%

4.00%

6.00%

8.00%

10.00%

12.00% Ja

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Ma

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Jul-0

8

Sep

-08

No

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Jan

-09

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Jul-0

9

Sep

-09

No

v-09

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-10

Ma

r-10

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Jul-1

0

Sep

-10

No

v-10

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-11

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Jul-1

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Sep

-11

No

v-11

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-12

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No

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-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

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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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