Must email offers rely on big discounts?
While many stores struggle to wean consumers off coupons and discount offers, at least some are trying to emphasize more personalized offers in their emailing pushes.
Analyzing the email campaigns of the top online retailers in the U.S., Listrak, the digital marketing firm, found that 22.2 percent of the top 500 online retailers sent more personalized emails in 2014 than 2013. More retailers were also including product recommendations in email, "increasing the level of personalization and engagement," according to Internet Retailer.
Overall, the study found a 45 percent decrease in discount offers in retailers’ first remarketing message.
A separate survey of more than 2,000 U.S. consumers found that those who read promotional emails found it helpful when retailers send emails featuring products based on past purchases (80 percent) and online browsing behavior (71 percent). Consumers were also seen to value online retargeting ads featuring products previously viewed on a retailer’s website (69 percent) and product recommendations on a retailer’s website while they’re shopping (67 percent).
Still, the consumer survey found price discount offers were most coveted.
When asked which types of website or email product recommendations are of interest, 81 percent of those who read promotional emails chose "on sale items" — more than twice that of other types of recommendations. Among the other recommendations were organized by price (40 percent); new (39 percent); highest rated (38 percent); top sellers (31 percent); and most "pinned" (8 percent).
Regardless, Listrak said the survey underscored the value of using purchase and browse behavior data to identify personal preferences, current interests and purchase history.
"Clearly, sales and promotions are powerful sales tactics; however, it is not always in the best interest of retailers to lead with discounts — or feature them at all — for reasons ranging from margins to brand integrity," said Listrak CEO Ross Kramer in a statement.
Particular attention should be paid to where shoppers are in their purchase journey to play on levers other than price.
"The survey results show that shoppers also highly value being presented with products within particular price points, new items and those that are most highly reviewed and purchased most by other shoppers," said Mr. Kramer. "Contextual relevance is key when featuring personalized product recommendations."
- Personalized email gaining traction with retailers: Listrak – Listrak
- Retailers get less promotional and more personal in their e-mail marketing – Internet Retailer
- Survey Reveals 80 percent of Email Readers Find It Useful When Emails Feature Recommended Products Based on Past Purchases 71 percent Based on What They Have Looked at Online – Listrak
Discussion Questions
Can personalization offers reduce the discount-driven nature of retail emails? What type of messages outside of price will likely encourage open rates and click-throughs?
Well I’ve got to say that my wife’s new BFF is Safeway’s “Just For You” program. These “personalized” offers are looked forward to, valued and acted upon.
To extend the shopper relationship one promotional process involves increasing the value or usage of items they already own. Say I purchased a sport coat that is very hip from a retailer in 2014. Sending me a selection of pre-matched shirts and slacks that would make me look even more hip is a major loyalty and sales promo plus. I envision myself in the new shirts you sent and how much cooler I would look, and I buy them—discounted or not.
Point: Improve the shopper’s life from where it is today and you will improve sales. Making me look hip is a major project, ask anyone.
Personalization does work and is gaining adoption, but it is remarkably under-utilized.
As this study and others like it show, relatively few retailers personalize by product. Listrak says product recommendations in re-marketing emails grew 85 percent, to 22 percent. That means four out of five re-marketing emails don’t recommend products. Imagine all those abandoned shopping carts.
Another study by Retention Science showed even online retailers are missing the opportunity. A full 80 percent of online retailers personalize email, but the vast majority only personalize name and subject line. Less than 40 percent recommended products even though they had all the data to do so.
To increase open rates and clicks, marketers need to avoid the easy route of bulk emails and optimize send time, subject, creative, product recommendations and offers.
Americans love product promotions. I don’t see that going away anytime soon. Adding the personalization touch definitely helps, however these personalizations have to include aspects of the purchase that the shopper actually values. That seems to be a common thread.
Let me start off by saying that nothing will replace the discount-driven mentality that is out there today (except for with some high-end signature retailers who can customize spectacular offerings for their clients). Consumers want great deals period, and I don’t waste my time sending out offers that don’t entice them with a great deal. We are upgrading our social media big-time, with texting, e-mail blasts and Facebook, and including our own videos. We are adding another high-end hard drive, which social media will run off of, and I’m excited to get it started. Keep the deals coming and the consumers will respond in kind.
Personalization, if done correctly, ought to be able to allow you to increase sales, not just devalue them.
The more you know about the reality of the customer, (as opposed to their transactional records,) the better you can personalize an offer. When you don’t know enough (or anything) discounts become default faux-intimacy.
Personalization is attractive to consumers. Why would anyone be surprised? How motivating is it to receive coupons or promotions for items in which you have no interest? Sales and discount headlines will continue to attract consumers’ attention. The real question is, does that headline generate sales and profit? Attention is not buying behavior. If the products or promotions being promoted are not relevant, consumers will not buy.
Personalization of offers is critical. The next question is whether that personalization always has to be a discount—what about an exclusive invitation to a fashion show, or a cooking class, or sampling event? What is important to consumers? What keeps them from purchasing? What could you do to create excitement?
Personalization can be leveraged in multiple ways to ensure that coupons and discounts don’t have a dramatically negative effect on financial performance or consumer expectations, while still generating sufficient excitement to encourage shoppers to make a purchase. While most customers will be pre-disposed to a discount of some description, it is often only the top purchase decision criteria of a subset of customers across all of their purchases or a subset of purchases across most customers. Determining which items are most important to which customers and then determining which items are most responsive to discounts and which customers loyal purchase behavior justifies a discount can allow the retailer to achieve multiple objectives simultaneously: keep valuable customers happy to they continue to return; invest in discounts only where they are valued; and achieve the retailer’s financial objectives.
A lot of personalization efforts still have some distance to travel before they are truly personalized across all dimensions of the communication (creative, content, products, discount levels, mix of offer types, channel of delivery, timing) on a consistent basis, but if executed in the right way, then personalization can deliver significant benefits across multiple dimensions.
Yes, absolutely. Personalization is an opportunity to move away from the one-size fits all, self-service nature of modern retailing. Price is only one aspect of the “value” equation for consumers. Helping shoppers find and purchase products that give them greater benefits can be just as powerful as lowering the price.
Messages outside of price will likely be most successful when they tap into a consumers’ individual wants and needs. Two possibilities: (1) reminding shoppers to purchase their planned products and (2) introducing new or contextually appropriate products to consumers. For example, a shopper is reminded to purchase milk when they are out and encouraged to try a new product for their current dietary needs or tastes.
The obvious challenge to personalization are the costs of correctly targeting shoppers. The discount-driven nature of retail emails may be a consequence of price being a common denominator between most shoppers. My hunch is that shoppers would be willing to provide extra information about their wants and needs if it will lead to a better shopping experience.
Finally, I think that it is important to point out that personalization can complement price-based promotions and that it need not be relegated to email blasts. Brands and retailers can use personalization to provide discounts so that shoppers save money on the products they value the most. And that online and offline retailers should think about personalization at the point-of-purchase as well.
Retail emails have the opportunity to act as a sales person would in a brick and mortar store. They know what you bought and can make great recommendations based on that knowledge.
Here’s an example of an email that could boost opens/click-throughs: a retailer could try sending out an email a few days after an order was due to arrive providing a few products that would compliment the one a shopper just received. If it was an article of clothing, a retailer could send outfit ideas that are inspired by current trends: timely, personal, and informative.