Did Gmail Reduce Retailers’ Christmas Bounty?
Did Google, specifically Gmail, put the "bah humbug" on e-tailer’s Christmas sales? According to reports, there are some who think so.
Six months and one holiday season after relegating e-commerce e-mails to a promotional folder in users’ inboxes, results from Gmail are mixed. Early on, the Boston Globe noted retailers’ concerns that messages were being "effectively classified as junk mail by shunting them to an inbox ghetto." Concerns were expressed about fewer customers clicking on sites "because they didn’t read the e-mail promising 40 percent off."
Allegedly intended to improve service for both users and marketers, the changes also altered retailers’ ability to see who had opened ads.
The New York Times‘ technology section observed that "any tiny change that the internet giant makes has cascading effects for businesses across the web," citing concerns from a skin-care brand about people checking their junk mail folders for promotions infrequently. Flash sale sites worried that time limits would be missed.
Initially, Yesmail Interactive, MailChimp and 3DCart calculated a small, one percent, decline in the rate e-commerce e-mails were opened. It appeared Gmail users were also waiting longer to click than Yahoo and Outlook users.
Several months later, the Times reports Epsilon, Sailthru and Mailchimp have been monitoring changes, comparing clicks and purchases via Gmail, Yahoo, Hotmail and AOL. Their findings weren’t uniformly discouraging. Some data showed Gmail users spending more while others showed them spending less. Epsilon’s retail customers, for example, reported reduced revenue from Gmail users. Epsilon’s SVP of digital marketing services also observed that not seeing messages meant customers weren’t reminded of brands, further reducing potential purchases.
MailChimp, which analyzed 29 billion e-mails sent over six months, found Gmail’s open and click rates declining by similar amounts of just over one percent, "both significantly larger" than Yahoo or Hotmail.
Sailthru, the Times explained, compared Thanksgiving weekend e-mail activity year over year at Gmail, Yahoo, Hotmail and AOL. Black Friday findings revealed Gmail open rates declined almost 13 percent, while increasing some five percent for the other three email providers. Gmail users were more likely to spend, however, leading their VP of optimization to conclude, "Retailers will need to individually examine whether the gains in quality are enough to offset any loss in quantity from the dip in opens."
Discussion Questions
Do you think Google’s changes to Gmail had a significant impact on pre-Christmas sales? What, if anything, should retailers do in response?
This doesn’t happen if you access your Gmail via a mobile device (iPad, etc.) which most people do. If sales on mobile devices increase per household and laptops/computers, decline, what is the issue?
I don’t use Gmail, but my wife does. Not long ago she said, “You know I never get any emails from the online retailers I subscribe to anymore.” I looked at her Gmail and saw the tabs. I clicked on “Promotions” and there they were. She said, “Oh, I thought that was junk mail so I never looked at it.”
The relevancy of Gmail’s tabs affecting retail business is being diminished by consumers use of mobile devices. From conversations with retailers who have been tracking customer email statistics, over well over 50% of emails are being opened on mobile devices.
My advice to retailers in the short-term is optimizing email for mobile readers. In the long-term, put a higher percentage of marketing spend into mobile-related avenues. Mobile-related marketing gives retailers opportunities to interact with their consumers. Find the methods that the retailer’s target customer prefers, invest and leverage these highly personal communications, and stop relying on mass email to drive sales because that window is closing fast.
Although the data from the first season seems inconclusive, I think that consumer frustration with email overload is real and our desensitization to offers arriving in our inbox will continue to challenge retailers.
I use a popular 3rd party service called Unroll.me that does keep promotional messages out of my inbox on all my devices, including my phone.
In response, retailers should invest in a better understanding of the path to purchase and continue to seek innovative and authentic ways to reach consumers with their message and offers including social and mobile in the mix.
I think anyone into internet specials/shopping was smart enough to know what was in the “promotional” box. My default mode is opposition to change, but after a couple of days I came to like the separation.
Slower holiday spending habits can be attributed to smaller budgets. A quick look at the clearance racks will leave no doubt to those still wondering where the holiday sales went wrong for retail and e-tail turns. You know, this might be a slight indication that the recovery maybe took a little dive or simply doesn’t exist any more than Santa. Sooooo… in order to side step the obvious, we need another culprit. Why not GOOGLE?
I would suspect that 10) many Gmail users who may have responded to an emailed ad never opened it and some sales were lost, and 2) the impact overall was likely minimal.
The world has changed. The customer owns their experience fully. Marketers can no longer rely on mass mailings of any type for growth. Personalized communications, in the manner the customer likes, are the only ones which will make it through the growing filters available to customers.
My experience was similar to Gene’s. I don’t know how long it was after the switchover that I finally noticed there were now different tabs in the inbox. That said, when I’m motivated to buy something, then I’ll click through that folder and see what’s come in recently. If I’m not in the market, I just pass it over without clicking anyway.