Retail Emails Take a Holiday from Conventional Wisdom

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It's a basic email marketing rule of thumb: Don't overload customers' inboxes. Oh, and personalize messages to ensure high open rates, experts counsel. This holiday season, some leading retailers told those experts to go take a sleigh ride. They boldly pumped up their email volumes over 2011 without expanding their lists, and experienced some of their highest inbox placements and open rates in years.

“This year we saw less targeting and segmentation and more widespread broadcasting of emails, pretty much across the board,” says GB Heidarsson, senior vice president of sales and marketing at eDataSource. The company provides email services to consumers that allow it access to 800,000 inboxes from which it culls data such as overall reach, average volume per email campaign, and inbox placement.

Best Buy was one retailer guilty of overstuffing inboxes. During the month of December 2012 Best Buy sent a total of 1.265 billion emails, compared to the 403 million it sent in 2011 in that time frame. Despite the fact that the electronics retailer slightly trimmed its list of recipients from 32.6 million to 32.3 million, its inbox placement rose slightly to 97% and its open rate increased from 9.4% to 9.6%. “The number of recipients Best Buy mailed to remained the same, but the volume of emails it sent to them tripled,” Heidarsson marvels. “And they're opening the emails. You have to think that maybe retailers are getting more effective in their communications.”

The three retailers eDataSource tracked last December inundated their customers with emails. Walmart and JC Penney doubled the number of messages sent to each subscriber during the month to 19 and 15, respectively. It was Best Buy, however, that tested the limits of customer tolerance, sending 39 emails to each person on its list--more than one a day.

“A lot of the criticism of broadcast emailing—that it's not as effective as more targeted campaigns, that it creates too much spam—these numbers show the opposite,” Heidarsson declares. “We look at subject lines and times of day to track whether there is segmentation going on, but we didn't really see much of that in any of these campaigns.”

JC Penney, which is being made over into an everyday-low-price retailer with few promotions by its new CEO, Apple Store veteran Ron Johnson, slightly decreased its overall email volume. But it also cut its list in half, thereby joining the other two retailers in loading subscribers' inboxes. Even though it was downplaying sales and didn't have as much to say to customers as some other retailers, its placement rate increased from 90% to 95% and its open rate went from 6.95% to 7.51%.

“What almost flies in the face of logic here is that people must have been OK with getting all of these emails. Otherwise they would have hit the spam buttons,” Heidarsson says. “Instead, all three of these retailers were above 95% for inbox placement, which we consider excellent.”

Why did retailers devote greater resources to the email channel this past Christmas and why did so many customers appear to accept it? One reason could be the increasing penetration of smartphones, a factor that several retail and marketing analysts credit for the double-digit rise in e-commerce sales during the holidays. While eDataSource is unable to detect the type of device on which an email is opened, Heidarsson says mobile must have played a key role in this incredible surge in email activity.

“If you increase the volume of email to this level and get this number of reads, it means that access to email has to be better,” he says. “One can reasonably deduce that mobile is another thing the thing improving the access.”

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