Press Coverage

The Last Blast: Retailers Are Moving To Behavioral Emails

Originally posted on June 7, 2018 by MediaPost.

Email remains the most profitable channel. But batch-and-blast mailing is fading out as behavioral targeting takes over — especially in retail, according to Marketers Are On A Mission, a study by SmarterHQ, Cheetah Digital, Liveclicker, and Mailcharts.

Amazon is the elephant in the room: A full 95% of the retailers put a high priority on figuring out how to compete with the giant. Behavioral targeting seems to be the answer.

Of the hundreds of marketers polled, 54% say email drives the highest percentage of revenue for their brand. Second is paid-search advertising, followed by social media and display.

But ROI depends on how they use email. Kara Holthaus, VP of client services for SmarterHQ, says behavioral emails drive 60% more conversions than mass marketing emails for her firm’s clients.

Perhaps because companies have mastered the email channel, they are posting only an average 7.75% budget increase in email compared with 16.75% for multichannel, 13.25% for websites and 13% for social media.

The picture changes slightly when you ask what they’re investing in.

Almost 83% are putting money into data/analytics. But 68.5% are spending on email deliverability.

Moreover, even some of the other budget items are related to email. For example, 66.7% are budgeting for content marketing, and 57.2% for personalization/behavioral marketing. In addition, 33.3% are putting dollars into contextual marketing, and 48.7% in personalization/behavioral marketing.

Communications frequency? Social media tops it, with 11.18%  Second is email, with 8.72% communications per month. However, that may be too much, given that for millennials the frequency is only one to three emails per month, according to the study.

In contrast, marketers deploy SMS 2.44 times a month, with mobile push at 1.84 times.

Retail is the only sector to plan a decrease in the number of mass-marketing emails in favor of behavioral campaigns. However, 62% of their marketing is still mass send, and only 38% is individual.

In contrast, 63% of travel & hospitality marketing is individual and 37% is mass send. Media, entertainment and telecom are at 73% mass and 27% individual.

Their top priorities (other than competing with Amazon) are:

  • Creating a more personalized customer experience
  • Increasing budgets to invest more in multichannel
  • Sending more behavior-based messages

Amazon has a slight advantage on price, but a whopping one on ease of transaction. In comparison, traditional retailers beat Amazon on the in-store experience, brand loyalty and product expertise.

But Amazon wins on one other point, a familiar one — 35% of its sales are directly attributed to behavioral marketing.