Retail giant Kmart tested e-mail marketing as a coupon delivery vehicle last month and found its registers ringing a happy tune.
A Sacramento test store received a 10 percent conversion rate during the one-week campaign while doubling the average purchase amount of recipients. Those involved with the campaign expect Kmart to move forward with similar campaigns.
Eversave.com, an e-marketing solutions provider for local offline retailers, conducted the effort. Eversave sent 10,000 e-mails to its list of consumers within a 20-minute radius of the store. The e-mails included an offer for a 10 percent discount.
Twenty-four percent of recipients opened the message and clicked through to Eversave.com to look at the coupon. Of those, 10 percent redeemed the coupon in the store.
“We all know that direct mail is a great vehicle for advertising. All we're doing is making it more efficient because the cost per e-mail is less than direct mail,” said Jere Doyle, president and founder of Eversave.com, Woburn, MA. “If you target offers and make them very relevant for consumers, it makes sense for them to open the e-mails at a higher rate and to read, click and redeem at higher rates.”
A bonus to the redemption rates was the amount that recipients spent at the store. The average sale was $88, which is more than twice the $40 average purchase.
The effectiveness of the campaign may have convinced Kmart to roll out future campaigns, said John McClain, CEO of Discount-it.com, a direct marketing company based in San Diego that contracted Eversave on behalf of Kmart for the campaign.
“The results obviously worked out pretty well,” he said. “I'd imagine with those numbers they'd like to do more business.”
The campaign was no fluke, as Eversave efforts for other retailers netted similar results, Doyle said. A Nationwide Computer and Electronics e-mail offer for $20 off a purchase of $99 and $50 off a purchase of $500 had a 12 percent click-through rate.
Zoots.com offered $10 off of its dry-cleaning services for consumers who signed up for its home pick-up and delivery. It received an 8 percent click-through rate and a 2 percent overall conversion rate.
These rates are enough to make any traditional direct mail company, with its 0.5 to 1.5 percent conversion rate, blush. Doyle, however, does not “believe that e-mail marketing replaces traditional advertising and direct mail, but used the right way, [it] is an additional, and very efficient and effective direct marketing tool with extremely high response rates that drives considerable foot traffic to offline stores.”
Doyle believes e-mail is especially effective when it comes to making offers for local businesses.
“As much as 92 percent of disposable income is spent within 20 minutes of your home, not on the Internet. E-mail is a great way to communicate with people and let them know what's available locally,” he said. “It's even better for saving them money in their local stores.”
