February 20, 2007
BrainTrust Query: Why are retailers in the dark ages when it comes to email?
By Anna Murray, President, e*media division tmg-e*media, inc.
Editor’s note: The author will be speaking on this topic at an upcoming MarketingSherpa
conference. She hopes to make use of your comments in this discussion for her presentation. You may also respond to Ms. Murray directly by using the feedback form on her BrainTrust
profile page.
Imagine the scenario: Into my inbox pops a beautiful email. It has a gorgeous, appetizing shot of lemon caper salmon. The salmon – the wild organic kind – is fresh and just arrived this week. How do I know? Because, the email is from my local Food Emporium. I can make that recipe tonight. Oh, and I also get special savings on oranges and facial tissue.
It’s a beautiful picture. Too bad it doesn’t exist. It’s one of the Great
Unanswered Questions of the internet: Why are retailers so slow to catch on
online opportunities — especially email?
The data right now is incontrovertible.
Targeted email drives in-store sales. In fact, just this week on RetailWire we
saw the discussion about recent Deloitte & Touche research emphasizing the importance of “pre-shopping” activities
to drive sales. (See RetailWire 2/15/07 – Connecting
with Pre-Shoppers and Following Through In-Store) One of the most important pre-shopping tools:
email.
Here’s the other thing, in my wallet, I have five frequent shopper
cards that are falling out all the time. So it’s not as if these stores don’t
have data on me. And — while my memory isn’t perfect — I really think I
wrote down my email address on, like, three of those frequent-shopper applications.
And I never get an email. Never. I am the laughing stock of my office for
being on nearly every email list ever known. But from retailers? My local grocery
store? Never, ever, not once, nada, nil, nothing. I recently surveyed major
grocery chain websites, and not one of them had an email newsletter that
I could sign up for (with the exception of Whole Foods).
I’m not talking here
about retail chains that do e-commerce. Of course I get email from Target
and Fresh Direct. That’s because I buy from them online. I’m talking about
brick-and-mortar retailers communicating with me through email.
Why, why
is this touch point missed entirely? Please, Mr. Food Emporium, could you
send me an email once in a while telling me that you’ve got cherries in stock?
Oh, and I’m sure there are about 47 brick-and-mortar stores in our zip code
that would pay you for co-registrations. And I would like to hear from them,
too.
Discussion Question: Why aren’t retailers using email to communicate with
their consumers and drive in-store sales?
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It is not just a missed opportunity but another level of selling that is being missed. I do not think retailers are not taking advantage of the email vehicle on purpose, but my experience has been with a lot of new initiatives that unless a specific profit center can be developed and measured then the hurdles of implementation are much higher
In your example of the beautiful salmon…that is one piece, but the missed additional opportunity is to create a long term bond with solutions for one’s overall dietary needs. Articles about what’s new and different in research (things like red wine and chocolate can be good for you), exercise tips, important phone numbers and contacts in the community, new restaurants and little league. Almost like a community newsletter from the one place that has the highest potential visits on a monthly basis.
The objective is not to be item price driven or even event driven…but lifestyle choice driven as MY STORE does all these other things in my life and I happen to shop there for food.
I think Mr. Raftery has a grand idea here. We DO get too much email. For what it’s worth, I have no problem getting email offers from supermarkets; I subscribe to them all over the country (using fake zip codes and such) because I want to see what they’re up to. (But as to the point about Food Emporium, well, I used to live in NY, and I’m not surprised.) Too often, supermarket emails are just like the store flier. And they’re never customized to my needs: aging boomer, diabetic, loves to eat healthy, buyer of certain specific foods over and over again). Perhaps if, as Dan suggested, supermarkets could find web sites where I buy regularly, and have a real relationship, they could piggyback. If I saw a reminder about salmon from my Price Chopper on the site of traveocity, duluth trading or firehouse, it would be a lot more effective than expecting me to wade thru Price Chopper’s weekly flier online.
The key challenge is CONTENT. Most grocers have tried email at some point, but many stop sending emails because their customers haven’t responded well to them. While some customers might love the lemon caper salmon recipe, others might not be interested at all. So, how can a retailer deliver content of interest to ALL of their customers? The answer is personalization.
There’s a real sweet spot we’ve found where the interests of customers and the objectives of retailers come together: personalizing the weekly ad.
To the consumer, it is a customer service helping to identify the items they buy that are on sale. The email is a personalized “pre-shopping” tool that saves them time as they plan their grocery trip and saves them money by making sure they don’t miss out on any savings.
To the retailer, it is a powerful promotional tool that gives each customer their own, personalized “reasons-to-visit” the retailer each week. Even if customers are tempted by competing retailer ads or by Wal-Mart, the customers know that they can save at the retailer on items they want to buy.
A great byproduct of the weekly specials emails is that it establishes a regular, weekly communications link with customers, providing an opportunity for further dialogue.
As with yesterday’s discussion regarding why retailers are stocking HMR alternatives from other branded outlets, I think this thread cuts to the heart of the food retailing challenge. In this case, the fact that food shopping is generally a very low involvement activity for consumers. Because of that, retailers fear their “push” emails will be viewed as SPAM, and they don’t think they can get enough shoppers to opt in to a “pull” campaign to make it worthwhile.
Here’s an example of my point. I belong to the Cabela’s Club, the DR owner’s club, the Vive Le Vin (my local wine shop) club, etc. and I have signed up for email offers from all of them. And I welcome them. I shop at Jewel and occasionally get a mailer that indicates they know my purchasing habits, but that’s about it.
Did you catch the key word? I “belong” to the “club” versus I “shop” at the “store”? As others have pointed out, successful email campaigns are premised on permission marketing. And to get permission, you have to warrant an action on consumer’s part. And to warrant the action, the consumer has to be involved enough with your shopping experience to want to be “part of the club.”
To do that, food retailers must stand for something more than “a place to buy brands of food.” They have to create a theme, appeal to a lifestyle, carve out a “unique selling proposition”–a distinctive positioning. They need marketers.
The challenge for retailers in using email is complex because it calls for the effective combination of four different skills: e-marketing communications, database management, shopper insights and sku selection. Sunday circulars are far easier and more cost efficient because they communicate a wide range of offerings at the cost of newsprint. When it comes to communicating with consumers via email to drive in-store sales, it’s a different kettle of fish.
The key rules are ensuring:
1) “Good” email addresses in a technically sound database. The rule of thumb is 1/3 of all email addresses need to be re-qualified every year.
2) Strong customer understanding and segmentation within the customer database. Not every consumer will be motivated by lemon caper salmon.
3) The right products are featured in the email,
4) Solid creative abilities to develop motivating emails.
Don’t circulars or even web sites sound a lot easier?
But if you have solid insights into your customer needs, you can attract customers to stores with higher margin skus that match their highest purchase interests.
The basic principles of good retail management–strong variety of attractive products, good pricing, solid promotional skills–should be applied to retailer emails, but they become all the more powerful through one-to-one targeting.
Yet many retailers do not have these skills resident in their own organizations or the time to devote to developing email campaigns. While they can realize higher margin sales through through email efforts, they need to be willing to make committed sales and marketing efforts supported by key partnerships. That’s how you catch fish.
Food retailing is the backwater industry for using ecommerce and Internet initiatives. Not even using them effectively, just using them. With some minor exceptions, these retailers have missed the trend. Yes, there is inertia (and where isn’t there inertia?) to contend with on hiring, expenses, anniversary marketing calendars, and on and on. The real challenge (echoes of my comments on an earlier discussion topic) is why food retailers don’t understand that they can get a true competitive advantage out of using the Internet.
Use the emails to drive traffic, use personal shoppers to pre-shop non-perishables, use web pages to provide area specific information (green initiatives, support for local farmers, etc.). Do these cost money? Yes. Will the return justify it? It’s something that has to be measured but in my humble opinion the answer is a resounding yes. Imagine how a food retailer would stand out if it took even a few steps in this area.
The roadblocks listed above are so ingrained in food retailing that the general tone of the comments is understandably permeated by frustration. It is tough to see the cornerstone segment of retailing so progress-impaired. It is also very possible that a variation on the email marketing model in this discussion is a more realistic route. For example, how about retail collaboration across segments? We saw how well this worked for gift cards this past holiday season. News flash: people who now get emails from their favorite department store or clothier also eat. Food retailers do not need to reinvent this wheel. We all get too much email anyway. Rather, they can partner with a non-food retailer who has a viable consumer network support system and link up to their mutual benefits.
Primarily because they are grocers and are waiting for someone else to do it for them or come up with a program that charges suppliers a fee to participate in this advertising. I don’t know about everyone else but the last person on earth that I would give my email address to is my local supermarket. Why? Because I know:
1. they would sell the information the moment they had the chance.
2. the “specials” would only be what a supplier PAID them to send.
3. I know they don’t have any real interest in helping me with anything. If they did, they would do away with their “privilege” cards. Who ever heard of a merchant that granted anyone the privilege of shopping in their store?
It would be wonderful if all ClubFresh customers at A&P SuperFresh stores received email reminders. But sadly, it is not the case.
Giant Eagle occasionally sends me email alerts, separate ones for Market District and others for regular Giant Eagle stores.
Sparkle Stores in the Youngstown-Canton OH area send Sparky’s Deals emails every two weeks. A&P Canada/Dominion sends their flyer to me weekly in an email. So does Royal Ahold Giant/Stop & Shop.
I would love to get a weekly email newsletter from Ann Page telling me about wonderful specials, new foods, fresh arrivals at my A&P family of stores. Email definitely is an underused source to reach out to a supermarket’s customer base.
Managing an electronic marketing campaign, along with a traditional print campaign and in-store campaigns are usually too much for most grocers. They have enough issues controlling their logistics cycle as well as creating a customer service vehicle that continues to exceed their customer’s expectations. Add to this an electronic e-mail marketing push, and you have another issue for retailers to worry about. The better companies are recognizing this and are either purchasing the knowledge (like Sears purchase of Lands’ End) or are growing this awareness in-house. These tools are clearly a great way to gain a competitive advantage in the retail market, and the leaders of tomorrow are adapting to the technologies of today. They understand that success is based upon adapting to today’s technologies while they still offer a competitive advantage.
SPAM emails from businesses are already such a big problem I would think consumers would be offended, unless they specifically requested the emails. Mr. Selbert mentioned that consumers unsubscribe at a rate of 9%. That’s because they have learned that unsubscribing only puts them on more SPAM lists. A while back, we discussed having supermarkets send text messages to consumers. There may be a few lonely people out there that like this sort of thing, but I think most consumers will find it to be annoying.
Shoppers and Retailers are in constant dialog about promotional offers. If most retailers surveyed their loyal customer base, they’d find that more than 75% of their best customers use email as a primary source of communication, at least once a day. It is clearly a best practice for retailers to engage their best customers in their preferred method of communication.
The question then is: how can retailers get really good at email dialog? The key is for retailers to learn how much and when to employ the email. Every email user has a threshold of how much unsolicited email they can tolerate. The key for retailers is to stay under that threshold. Otherwise, your email will find its way into the Spam folder and worse, in commercial spam filtering software.
The messages must be relevant and compelling tied to customer needs and interests. Business Intelligence software is key to help retailers select customers based on their purchasing and email behavior. After a message goes out, it’s also vital to track the behavior of the recipients. Did they delete it with reading? Did they hyperlink to your web site? Did they purchase? What sales lift occurred in contrast to a control?
An email campaign requires a person to run it. That increases the head count. It’s very hard to get permission for a head count increase, even 1 more person. And most retailer promotion calendars are mirror images of last year. If there was no email event last year, there won’t be one this year. Obstacles to innovation are very high in retailing.
From Integrated Retailing:
Yes, shoppers read email! Email ads have the potential to emerge as one of retailing’s most effective marketing tools. As high-speed Internet access becomes more widespread at home and at work, retailers are now able to reach more consumers with sumptuous photography and sophisticated text messages. Stores can even market at the level of the individual shopper, sending customized pitches that target specific customers with specific items, based on their previous buying behavior.
Email marketing is the most immediate, versatile and one of the cheapest forms of advertising. Do email ads work? On average, consumers open them at a rate of 33% and unsubscribe at a rate of 9%, according to Forrester Research. Shoppers click through to retail sites at an average rate of 11%, and place an order at an average rate of 4.3%. But savvy retailers use email as a way to generate more spending in all channels. Neiman Marcus customers who shop via all three retail channels, for example–catalogs, online and stores–spend six times as much as customers who shop in just one.
One of the greatest strengths of email is its capacity for customization. Gap, for example, segments email recipients by nine different customer groups, including gender, shopping behavior, merchandise category and price point. From there the company relies on both mathematical metrics and human intuition to determine which emails are appropriate for each customer segment.
Other retailers have similar systems. When signing up for email from Nordstrom, subscribers can choose to receive messages about women’s or men’s apparel, petite- or plus-size fashion. The messages are further customized according to online purchases. Neiman Marcus goes a step further; subscribers who arrive at its Web site via an email ad may find their favorite designers or items highlighted on the home page.
Retailers like email’s immediacy. Neiman says its core luxury consumers consider it a priority to see the latest styles right away, a demand the company takes great pains to satisfy.
It is definitely, a lost opportunity that would complement the brick ‘n mortar business. And it is very possible that, given the younger generations, the source of purchasing may be dominated by the retailer’s website and emails, in the short term (to the younger target audience).
It is so discouraging, as the RW article points out, that there isn’t an everyday manager who operates the emails going out and responses coming in. This is consumer interaction…not the same ad or announcement for the week.
The disconnect is obvious! Would it not be feasible to be told by a retailer “10 days ’till the ripe bananas are in.” Or, “we are featuring our famous signature cream cheese with chocolate swirl, cake, all next month.” Instead we get non-intrusive and uneventful…whatever.
The retailer could even give a service tip, like “all second quarter you can count on our new line of cruise wear being fully stocked,” or “we’ll give you $6 on your next cruise wear purchase.” Talk about being newsworthy, and committed to keeping the consumer from going elsewhere!
It is time for retailers to treat your email and web site as an easy and interesting communication vehicle to use; and as a knowledge based marketing tool. And not as, “of course we have emails sent out daily to our shoppers”…too bad the emails are turn offs, and not shopper enticements and loyalty builders! Hmmmmmmmmmmmmmmmmm
Anna, you raise a worthwhile question here and you illustrate it well by proposing that supermarkets use email to communicate availability of seasonal items. If Office Depot and Southwest Airlines can inform me of special deals via email, certainly grocers can do the same. So your question, “why?” deserves a moment’s attention. I can think of several possible reasons:
First, many supermarkets don’t capture customer email addresses in the first place. Many try to keep the frequent shopper card sign-up process as streamlined as possible. Often the only required information is a phone number (no name needed).
Second, supermarkets are especially gun-shy regarding privacy advocacy groups, who persist in criticizing frequent shopper programs in conspiracy terms. With business already operationally complex, the judgment may be, “why make waves?”
Third, most supermarkets haven’t invested much effort or money in developing the direct marketing and customer managed relationship skill sets required to make email communications effective and value-added to consumers. In fact, few even have a plan yet.
Fourth, most chains haven’t begun to get local with their marketing or execution. Makes little sense to send out a national or regional email promotion for an item that is likely to be out-of-stock or not on display in 30% of stores. Email messaging would only call closer attention to the implementation failures that continue to plague the industry.
Fifth, supermarkets probably haven’t figured out a way to make their suppliers pay for this.
These challenges can be resolved with systematic effort, however, and I think there’s a heckuva good idea here. I’d be very happy to have my local Safeway inform me by email that it has received a shipment of very good wild salmon from Alaska, or that the very brief domestic apricot season was upon us. This is about extending the store into the customer’s pantry in a way that adds value without price discounting.
The important thing about any email campaign is it has to help create “community” with the people receiving it. To do this it requires some sense of a personal nature and that in and of itself makes it difficult for a retailer to execute on any type of a large scale. Any retailer thinking about doing any type of an email campaign is also going to be reminded of Starbucks attempt to deliver a coupon via the internet to a select area of the country. We all watched the campaign backfire and this was from a retailer who wrote the book on creating “community.” No wonder most other retailers are scared to try anything and will default to not doing anything until they are forced to by their competition.
Sorry, Anna, but I am not a big fan of targeted email. I don’t doubt that it works with many potential customers who might not have planned to buy a particular thing until a message landed on their screen that sounded tempting but there are other ways of looking at this.
The data that you say is incontrovertible presumably refers to customers who have opted in; once they have asked to have emails sent then obviously they are going to be receptive and the emails will appear to drive in-store sales.
Of those retailers who don’t contact you in spite of having asked for and been given your email address, just maybe you are not part of a large group who have similarly provided such information. Perhaps not enough customers indicated an interest in receiving emails to justify sending them out. Or perhaps some gave the information automatically (as many people do nowadays) just because it was asked for but then decided that they didn’t really want to receive sales messages after all.
Your other comments, and those from Integrated Retailing, give the issue a clearer perspective. Retailers who have and use their websites and encourage customers to buy both off and online as well as researching online before buying in-store, have a much better handle on how to use email for marketing purposes. Retailers who are still relying entirely on bricks and mortar have a different customer base, many of whom would not want or expect to receive emails. These guys are a whole different kettle of fish and in this instance, I suspect you are more the exception than the rule.
In retail banking we would appear to have access to some great data on buying habits, dollars spent, at what stores, etc. However, we don’t seem to be employing these tools to finely slice email promotions.
We are a medium sized financial institution, however, in reflection I think our failures with email tend to be from lack of back end measurement–linking results with emails.
My other thought/question would be, are retail financial services too much of a commodity to have successful email promotions? Or is that a cop out; email is a way to increase frequency without cost?
Finally, if I could increase my email to non-customers, that would help I am sure.
Who says retailers don’t use email? I get email regularly from Target, Restoration Hardware and Design Within Reach. Of course, I am registered with these retailers and have given them permission to contact me with offers I may be interested in. That’s a big difference. Retailers sending out unsolicited spam emails would immediately be crossed off my shopping list.
Many retailers are not taking advantage or maximizing the opportunity because it’s an all new way of doing things and requires creativity and focused ideas and campaigns–a whole new marketing group. Think of the companies that are doing an effective job with email campaigns. M&M’s sends out recipes and creative party ideas with a theme every month. Colorful, bright and fun, every recipe just happens to have M&M candies in it. People are sharing this email, creating the community talked about in other comments. Barnes & Noble sends out a 25% coupon to readers every so often, prompting them to buy that book they’ve been thinking about getting.
Email campaigns should “do something” for the consumer receiving it or it will be delete, delete, delete. The campaign should, create emotion, value or knowledge.
Email marketing needs to be customized, practical and “fresh” to be useful to consumers who already have a hard time keeping up with their personal emails. Targeted emails where consumers can opt in based on their areas of interest is good marketing, but still rare for most supermarkets. Cost pressures are great and there is a great tendency to rely on current marketing strategies and the data they already have, much of which may still not be used by the company.
Offering consumers meal ideas and recipes based on the weekly ad, specials based on their frequent purchases, health and nutrition information for busy moms, diabetics, and those on special diets would be welcome by many consumers. Wegmans does one of the best jobs I have seen in providing a customized email based on consumer preferences. They include a range of information as well as specials on “fresh” items as well as events at their stores.
There is opportunity for retailers here, but often competing priorities take precedence.
I whole heartedly agree that brick and mortars are missing the boat on email, but let’s look more at why.
There are a ton of businesses out there that are Mom & Pop, the independent retailers. Whenever I say that, people tend to think of small hole in the wall operations, but I’ll tell you from experience, within vertical niches there are thriving businesses that are fighting mass merchants in one way shape or form, but mostly through in store operations.
Independents might pull off some direct mail marketing, in store flyers etc, but the efforts quite frankly are enormous and a lot of independent retailers often don’t know where or how to begin.
These specialty independent retailers, (500k to 20M) have long prided themselves as “product experts” “quality etc vs. price–but they can’t feed their consumers like the large merchants and online outlets. Their POS software is often a limitation in itself, not providing email capabilities or simple access to the data.
The consumer in every industry I have seen is out-pacing the independent retailer in technology adoption. With, pricing, inventory, employees, customer service and all the hats employees in these sectors have to wear on a daily basis, they just can’t afford the time or talent to dedicate to launching and sustaining these programs. And that’s just the start, getting data out of their systems, managing lists, design, content and inspiration–it’s a bit intimidating to these retailers.
I agree with the earlier post, that business spam is an issue to consumers and if you step into this ring, you can quickly get your hand slapped and I think our retailers know that and simply forgo – your electronic efforts need to revolve around building that out of store experience and extending the transaction past the end of the checkout–so with all of this, the brick and mortars sit on the sidelines.
This is the challenge my company is focused on resolving. Providing industry vertical content, with vendor support, tied to the independent retailers POS software to drive brands from the manufacturer directly to the consumer, and help the independents easily and quickly send out these email communications.(We just launched in the Garden Center Industry and sporting goods industry 1/1/08)
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It is not just a missed opportunity but another level of selling that is being missed. I do not think retailers are not taking advantage of the email vehicle on purpose, but my experience has been with a lot of new initiatives that unless a specific profit center can be developed and measured then the hurdles of implementation are much higher
In your example of the beautiful salmon…that is one piece, but the missed additional opportunity is to create a long term bond with solutions for one’s overall dietary needs. Articles about what’s new and different in research (things like red wine and chocolate can be good for you), exercise tips, important phone numbers and contacts in the community, new restaurants and little league. Almost like a community newsletter from the one place that has the highest potential visits on a monthly basis.
The objective is not to be item price driven or even event driven…but lifestyle choice driven as MY STORE does all these other things in my life and I happen to shop there for food.
I think Mr. Raftery has a grand idea here. We DO get too much email. For what it’s worth, I have no problem getting email offers from supermarkets; I subscribe to them all over the country (using fake zip codes and such) because I want to see what they’re up to. (But as to the point about Food Emporium, well, I used to live in NY, and I’m not surprised.) Too often, supermarket emails are just like the store flier. And they’re never customized to my needs: aging boomer, diabetic, loves to eat healthy, buyer of certain specific foods over and over again). Perhaps if, as Dan suggested, supermarkets could find web sites where I buy regularly, and have a real relationship, they could piggyback. If I saw a reminder about salmon from my Price Chopper on the site of traveocity, duluth trading or firehouse, it would be a lot more effective than expecting me to wade thru Price Chopper’s weekly flier online.
The key challenge is CONTENT. Most grocers have tried email at some point, but many stop sending emails because their customers haven’t responded well to them. While some customers might love the lemon caper salmon recipe, others might not be interested at all. So, how can a retailer deliver content of interest to ALL of their customers? The answer is personalization.
There’s a real sweet spot we’ve found where the interests of customers and the objectives of retailers come together: personalizing the weekly ad.
To the consumer, it is a customer service helping to identify the items they buy that are on sale. The email is a personalized “pre-shopping” tool that saves them time as they plan their grocery trip and saves them money by making sure they don’t miss out on any savings.
To the retailer, it is a powerful promotional tool that gives each customer their own, personalized “reasons-to-visit” the retailer each week. Even if customers are tempted by competing retailer ads or by Wal-Mart, the customers know that they can save at the retailer on items they want to buy.
A great byproduct of the weekly specials emails is that it establishes a regular, weekly communications link with customers, providing an opportunity for further dialogue.
As with yesterday’s discussion regarding why retailers are stocking HMR alternatives from other branded outlets, I think this thread cuts to the heart of the food retailing challenge. In this case, the fact that food shopping is generally a very low involvement activity for consumers. Because of that, retailers fear their “push” emails will be viewed as SPAM, and they don’t think they can get enough shoppers to opt in to a “pull” campaign to make it worthwhile.
Here’s an example of my point. I belong to the Cabela’s Club, the DR owner’s club, the Vive Le Vin (my local wine shop) club, etc. and I have signed up for email offers from all of them. And I welcome them. I shop at Jewel and occasionally get a mailer that indicates they know my purchasing habits, but that’s about it.
Did you catch the key word? I “belong” to the “club” versus I “shop” at the “store”? As others have pointed out, successful email campaigns are premised on permission marketing. And to get permission, you have to warrant an action on consumer’s part. And to warrant the action, the consumer has to be involved enough with your shopping experience to want to be “part of the club.”
To do that, food retailers must stand for something more than “a place to buy brands of food.” They have to create a theme, appeal to a lifestyle, carve out a “unique selling proposition”–a distinctive positioning. They need marketers.
The challenge for retailers in using email is complex because it calls for the effective combination of four different skills: e-marketing communications, database management, shopper insights and sku selection. Sunday circulars are far easier and more cost efficient because they communicate a wide range of offerings at the cost of newsprint. When it comes to communicating with consumers via email to drive in-store sales, it’s a different kettle of fish.
The key rules are ensuring:
1) “Good” email addresses in a technically sound database. The rule of thumb is 1/3 of all email addresses need to be re-qualified every year.
2) Strong customer understanding and segmentation within the customer database. Not every consumer will be motivated by lemon caper salmon.
3) The right products are featured in the email,
4) Solid creative abilities to develop motivating emails.
Don’t circulars or even web sites sound a lot easier?
But if you have solid insights into your customer needs, you can attract customers to stores with higher margin skus that match their highest purchase interests.
The basic principles of good retail management–strong variety of attractive products, good pricing, solid promotional skills–should be applied to retailer emails, but they become all the more powerful through one-to-one targeting.
Yet many retailers do not have these skills resident in their own organizations or the time to devote to developing email campaigns. While they can realize higher margin sales through through email efforts, they need to be willing to make committed sales and marketing efforts supported by key partnerships. That’s how you catch fish.
Food retailing is the backwater industry for using ecommerce and Internet initiatives. Not even using them effectively, just using them. With some minor exceptions, these retailers have missed the trend. Yes, there is inertia (and where isn’t there inertia?) to contend with on hiring, expenses, anniversary marketing calendars, and on and on. The real challenge (echoes of my comments on an earlier discussion topic) is why food retailers don’t understand that they can get a true competitive advantage out of using the Internet.
Use the emails to drive traffic, use personal shoppers to pre-shop non-perishables, use web pages to provide area specific information (green initiatives, support for local farmers, etc.). Do these cost money? Yes. Will the return justify it? It’s something that has to be measured but in my humble opinion the answer is a resounding yes. Imagine how a food retailer would stand out if it took even a few steps in this area.
The roadblocks listed above are so ingrained in food retailing that the general tone of the comments is understandably permeated by frustration. It is tough to see the cornerstone segment of retailing so progress-impaired. It is also very possible that a variation on the email marketing model in this discussion is a more realistic route. For example, how about retail collaboration across segments? We saw how well this worked for gift cards this past holiday season. News flash: people who now get emails from their favorite department store or clothier also eat. Food retailers do not need to reinvent this wheel. We all get too much email anyway. Rather, they can partner with a non-food retailer who has a viable consumer network support system and link up to their mutual benefits.
Primarily because they are grocers and are waiting for someone else to do it for them or come up with a program that charges suppliers a fee to participate in this advertising. I don’t know about everyone else but the last person on earth that I would give my email address to is my local supermarket. Why? Because I know:
1. they would sell the information the moment they had the chance.
2. the “specials” would only be what a supplier PAID them to send.
3. I know they don’t have any real interest in helping me with anything. If they did, they would do away with their “privilege” cards. Who ever heard of a merchant that granted anyone the privilege of shopping in their store?
It would be wonderful if all ClubFresh customers at A&P SuperFresh stores received email reminders. But sadly, it is not the case.
Giant Eagle occasionally sends me email alerts, separate ones for Market District and others for regular Giant Eagle stores.
Sparkle Stores in the Youngstown-Canton OH area send Sparky’s Deals emails every two weeks. A&P Canada/Dominion sends their flyer to me weekly in an email. So does Royal Ahold Giant/Stop & Shop.
I would love to get a weekly email newsletter from Ann Page telling me about wonderful specials, new foods, fresh arrivals at my A&P family of stores. Email definitely is an underused source to reach out to a supermarket’s customer base.
Managing an electronic marketing campaign, along with a traditional print campaign and in-store campaigns are usually too much for most grocers. They have enough issues controlling their logistics cycle as well as creating a customer service vehicle that continues to exceed their customer’s expectations. Add to this an electronic e-mail marketing push, and you have another issue for retailers to worry about. The better companies are recognizing this and are either purchasing the knowledge (like Sears purchase of Lands’ End) or are growing this awareness in-house. These tools are clearly a great way to gain a competitive advantage in the retail market, and the leaders of tomorrow are adapting to the technologies of today. They understand that success is based upon adapting to today’s technologies while they still offer a competitive advantage.
SPAM emails from businesses are already such a big problem I would think consumers would be offended, unless they specifically requested the emails. Mr. Selbert mentioned that consumers unsubscribe at a rate of 9%. That’s because they have learned that unsubscribing only puts them on more SPAM lists. A while back, we discussed having supermarkets send text messages to consumers. There may be a few lonely people out there that like this sort of thing, but I think most consumers will find it to be annoying.
Shoppers and Retailers are in constant dialog about promotional offers. If most retailers surveyed their loyal customer base, they’d find that more than 75% of their best customers use email as a primary source of communication, at least once a day. It is clearly a best practice for retailers to engage their best customers in their preferred method of communication.
The question then is: how can retailers get really good at email dialog? The key is for retailers to learn how much and when to employ the email. Every email user has a threshold of how much unsolicited email they can tolerate. The key for retailers is to stay under that threshold. Otherwise, your email will find its way into the Spam folder and worse, in commercial spam filtering software.
The messages must be relevant and compelling tied to customer needs and interests. Business Intelligence software is key to help retailers select customers based on their purchasing and email behavior. After a message goes out, it’s also vital to track the behavior of the recipients. Did they delete it with reading? Did they hyperlink to your web site? Did they purchase? What sales lift occurred in contrast to a control?
An email campaign requires a person to run it. That increases the head count. It’s very hard to get permission for a head count increase, even 1 more person. And most retailer promotion calendars are mirror images of last year. If there was no email event last year, there won’t be one this year. Obstacles to innovation are very high in retailing.
From Integrated Retailing:
Yes, shoppers read email! Email ads have the potential to emerge as one of retailing’s most effective marketing tools. As high-speed Internet access becomes more widespread at home and at work, retailers are now able to reach more consumers with sumptuous photography and sophisticated text messages. Stores can even market at the level of the individual shopper, sending customized pitches that target specific customers with specific items, based on their previous buying behavior.
Email marketing is the most immediate, versatile and one of the cheapest forms of advertising. Do email ads work? On average, consumers open them at a rate of 33% and unsubscribe at a rate of 9%, according to Forrester Research. Shoppers click through to retail sites at an average rate of 11%, and place an order at an average rate of 4.3%. But savvy retailers use email as a way to generate more spending in all channels. Neiman Marcus customers who shop via all three retail channels, for example–catalogs, online and stores–spend six times as much as customers who shop in just one.
One of the greatest strengths of email is its capacity for customization. Gap, for example, segments email recipients by nine different customer groups, including gender, shopping behavior, merchandise category and price point. From there the company relies on both mathematical metrics and human intuition to determine which emails are appropriate for each customer segment.
Other retailers have similar systems. When signing up for email from Nordstrom, subscribers can choose to receive messages about women’s or men’s apparel, petite- or plus-size fashion. The messages are further customized according to online purchases. Neiman Marcus goes a step further; subscribers who arrive at its Web site via an email ad may find their favorite designers or items highlighted on the home page.
Retailers like email’s immediacy. Neiman says its core luxury consumers consider it a priority to see the latest styles right away, a demand the company takes great pains to satisfy.
It is definitely, a lost opportunity that would complement the brick ‘n mortar business. And it is very possible that, given the younger generations, the source of purchasing may be dominated by the retailer’s website and emails, in the short term (to the younger target audience).
It is so discouraging, as the RW article points out, that there isn’t an everyday manager who operates the emails going out and responses coming in. This is consumer interaction…not the same ad or announcement for the week.
The disconnect is obvious! Would it not be feasible to be told by a retailer “10 days ’till the ripe bananas are in.” Or, “we are featuring our famous signature cream cheese with chocolate swirl, cake, all next month.” Instead we get non-intrusive and uneventful…whatever.
The retailer could even give a service tip, like “all second quarter you can count on our new line of cruise wear being fully stocked,” or “we’ll give you $6 on your next cruise wear purchase.” Talk about being newsworthy, and committed to keeping the consumer from going elsewhere!
It is time for retailers to treat your email and web site as an easy and interesting communication vehicle to use; and as a knowledge based marketing tool. And not as, “of course we have emails sent out daily to our shoppers”…too bad the emails are turn offs, and not shopper enticements and loyalty builders! Hmmmmmmmmmmmmmmmmm
Anna, you raise a worthwhile question here and you illustrate it well by proposing that supermarkets use email to communicate availability of seasonal items. If Office Depot and Southwest Airlines can inform me of special deals via email, certainly grocers can do the same. So your question, “why?” deserves a moment’s attention. I can think of several possible reasons:
First, many supermarkets don’t capture customer email addresses in the first place. Many try to keep the frequent shopper card sign-up process as streamlined as possible. Often the only required information is a phone number (no name needed).
Second, supermarkets are especially gun-shy regarding privacy advocacy groups, who persist in criticizing frequent shopper programs in conspiracy terms. With business already operationally complex, the judgment may be, “why make waves?”
Third, most supermarkets haven’t invested much effort or money in developing the direct marketing and customer managed relationship skill sets required to make email communications effective and value-added to consumers. In fact, few even have a plan yet.
Fourth, most chains haven’t begun to get local with their marketing or execution. Makes little sense to send out a national or regional email promotion for an item that is likely to be out-of-stock or not on display in 30% of stores. Email messaging would only call closer attention to the implementation failures that continue to plague the industry.
Fifth, supermarkets probably haven’t figured out a way to make their suppliers pay for this.
These challenges can be resolved with systematic effort, however, and I think there’s a heckuva good idea here. I’d be very happy to have my local Safeway inform me by email that it has received a shipment of very good wild salmon from Alaska, or that the very brief domestic apricot season was upon us. This is about extending the store into the customer’s pantry in a way that adds value without price discounting.
The important thing about any email campaign is it has to help create “community” with the people receiving it. To do this it requires some sense of a personal nature and that in and of itself makes it difficult for a retailer to execute on any type of a large scale. Any retailer thinking about doing any type of an email campaign is also going to be reminded of Starbucks attempt to deliver a coupon via the internet to a select area of the country. We all watched the campaign backfire and this was from a retailer who wrote the book on creating “community.” No wonder most other retailers are scared to try anything and will default to not doing anything until they are forced to by their competition.
Sorry, Anna, but I am not a big fan of targeted email. I don’t doubt that it works with many potential customers who might not have planned to buy a particular thing until a message landed on their screen that sounded tempting but there are other ways of looking at this.
The data that you say is incontrovertible presumably refers to customers who have opted in; once they have asked to have emails sent then obviously they are going to be receptive and the emails will appear to drive in-store sales.
Of those retailers who don’t contact you in spite of having asked for and been given your email address, just maybe you are not part of a large group who have similarly provided such information. Perhaps not enough customers indicated an interest in receiving emails to justify sending them out. Or perhaps some gave the information automatically (as many people do nowadays) just because it was asked for but then decided that they didn’t really want to receive sales messages after all.
Your other comments, and those from Integrated Retailing, give the issue a clearer perspective. Retailers who have and use their websites and encourage customers to buy both off and online as well as researching online before buying in-store, have a much better handle on how to use email for marketing purposes. Retailers who are still relying entirely on bricks and mortar have a different customer base, many of whom would not want or expect to receive emails. These guys are a whole different kettle of fish and in this instance, I suspect you are more the exception than the rule.
In retail banking we would appear to have access to some great data on buying habits, dollars spent, at what stores, etc. However, we don’t seem to be employing these tools to finely slice email promotions.
We are a medium sized financial institution, however, in reflection I think our failures with email tend to be from lack of back end measurement–linking results with emails.
My other thought/question would be, are retail financial services too much of a commodity to have successful email promotions? Or is that a cop out; email is a way to increase frequency without cost?
Finally, if I could increase my email to non-customers, that would help I am sure.
Who says retailers don’t use email? I get email regularly from Target, Restoration Hardware and Design Within Reach. Of course, I am registered with these retailers and have given them permission to contact me with offers I may be interested in. That’s a big difference. Retailers sending out unsolicited spam emails would immediately be crossed off my shopping list.
Many retailers are not taking advantage or maximizing the opportunity because it’s an all new way of doing things and requires creativity and focused ideas and campaigns–a whole new marketing group. Think of the companies that are doing an effective job with email campaigns. M&M’s sends out recipes and creative party ideas with a theme every month. Colorful, bright and fun, every recipe just happens to have M&M candies in it. People are sharing this email, creating the community talked about in other comments. Barnes & Noble sends out a 25% coupon to readers every so often, prompting them to buy that book they’ve been thinking about getting.
Email campaigns should “do something” for the consumer receiving it or it will be delete, delete, delete. The campaign should, create emotion, value or knowledge.
Email marketing needs to be customized, practical and “fresh” to be useful to consumers who already have a hard time keeping up with their personal emails. Targeted emails where consumers can opt in based on their areas of interest is good marketing, but still rare for most supermarkets. Cost pressures are great and there is a great tendency to rely on current marketing strategies and the data they already have, much of which may still not be used by the company.
Offering consumers meal ideas and recipes based on the weekly ad, specials based on their frequent purchases, health and nutrition information for busy moms, diabetics, and those on special diets would be welcome by many consumers. Wegmans does one of the best jobs I have seen in providing a customized email based on consumer preferences. They include a range of information as well as specials on “fresh” items as well as events at their stores.
There is opportunity for retailers here, but often competing priorities take precedence.
I whole heartedly agree that brick and mortars are missing the boat on email, but let’s look more at why.
There are a ton of businesses out there that are Mom & Pop, the independent retailers. Whenever I say that, people tend to think of small hole in the wall operations, but I’ll tell you from experience, within vertical niches there are thriving businesses that are fighting mass merchants in one way shape or form, but mostly through in store operations.
Independents might pull off some direct mail marketing, in store flyers etc, but the efforts quite frankly are enormous and a lot of independent retailers often don’t know where or how to begin.
These specialty independent retailers, (500k to 20M) have long prided themselves as “product experts” “quality etc vs. price–but they can’t feed their consumers like the large merchants and online outlets. Their POS software is often a limitation in itself, not providing email capabilities or simple access to the data.
The consumer in every industry I have seen is out-pacing the independent retailer in technology adoption. With, pricing, inventory, employees, customer service and all the hats employees in these sectors have to wear on a daily basis, they just can’t afford the time or talent to dedicate to launching and sustaining these programs. And that’s just the start, getting data out of their systems, managing lists, design, content and inspiration–it’s a bit intimidating to these retailers.
I agree with the earlier post, that business spam is an issue to consumers and if you step into this ring, you can quickly get your hand slapped and I think our retailers know that and simply forgo – your electronic efforts need to revolve around building that out of store experience and extending the transaction past the end of the checkout–so with all of this, the brick and mortars sit on the sidelines.
This is the challenge my company is focused on resolving. Providing industry vertical content, with vendor support, tied to the independent retailers POS software to drive brands from the manufacturer directly to the consumer, and help the independents easily and quickly send out these email communications.(We just launched in the Garden Center Industry and sporting goods industry 1/1/08)