silverpop 2011-top-500-retailers-study

2011 TOP RETAILERS STUDY: Benchmarks, Trends and Tactics for Better Marketing

Email.Marketing.Automation

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as key spots for improvement, and also pinpointed several important differentiators between top performers and the rest of the pack.

The StudyTo evaluate the Top 500 online retailers, we first looked at a larger sample size to compare the practices of the elite performers against other retailers. Silverpop researchers logged onto the websites of 630 top retailers identified by Internet Retailer and registered to receive emails from each that had an email marketing program. The following items were evaluated:

• Location of opt-in link on the home page and prominence of opt-in throughout website

• Subscription options offered to registrants• Use of double opt-in and welcome emails• Number of emails received during a 30-day period (November

through December 2010)• Percent of retailers using personalized subject lines, offering

sales or discount incentives, and using video• Type of sale or discount offered, and percent of emails offering these discounts

• Percent of companies linking to social media sites, and use of

fan/friend versus social-sharing links• Percent of companies employing cart abandonment campaigns

• Number of emails in these cart abandonment campaigns, and how incen-

tives were used within these messages• Unsubscribe links leading to

preference centers

When the study period ended, Silverpop evalu-ated the Top 500 retailers against the additional

companies that didn’t make the cut. This is the fourth year that Silverpop has participated in

Internet Retailer’s Top 500 Guide evaluation, so we were able to compare email market-

ing programs during the previous holiday seasons where applicable.

O nline marketing continues to evolve in exciting ways for both retailers and customers, with new communication channels emerging at a rapid rate. The rise of social media has helped

shift thinking from one-to-one targeting to one-to-one dialogues. Smart phones and tablets have taken mobile to a new level of functionality and interactivity. Even the inbox is changing, with ISPs and email clients moving toward a multichannel inbox that prioritizes messages based on relevance.

Retailers looking to thrive in this changing marketplace by integrating messages across channels, efficiently nurturing and converting relationships, and boosting brand loyalty continue to turn to email. And the channel has grown increasingly sophisticated and powerful: Automated, triggered, behavior-driven messages sent before and after the sale have transformed email into a more efficient revenue-generating machine than ever. Retailers have recognized this, with 96 percent of top retailers offering email programs in 2010, the third straight year the figure has topped 95 percent.

But despite the widespread use of the channel and its unparalleled ability to engage customers, challenges remain. Chief among them is online retailers’ hesitation to offer customers options at both opt-in and opt-out. With two-thirds of retailers not giving recipients choices to voice their preferences, relevance suffers. And with today’s sophisticated consumers more empowered than ever, not taking into account preferences means retailers are failing to connect with customers on their terms, losing valuable revenue opportunities in the process.

To help increase understanding of email benchmarks, new trends, and how online retailers can better engage customers, Silverpop again teamed with Internet Retailer to evaluate the email programs of the Top 500 retailers compared with other retailers who didn’t quite make the list. The study identified areas of success as well

2011 TOP RETAILERS STUDY: Benchmarks, Trends and Tactics for Better Marketing

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Subscription Options Offered to RegistrantsOffering options to subscribers regarding content, frequency and channels helps marketers increase message relevance and connect with customers when and how they prefer. Despite these benefits, the majority of online retailers continue to neglect to offer choices to new subscribers, with only a third of Top 500 retail-ers doing so and 21 percent of remaining retailers employing this practice.

Of the companies that do offer subscribers options, the majority ask custom-ers to provide shopping preferences, such as whether they’re interested in women’s, men’s or children’s clothing and what sizes, styles or colors are most important to them. That’s a smart tactic, since this information can be used for segmentation and dynamic content that helps ensure you’re deliver-ing messages that are engaging for each recipient.

Despite the clear benefits, even among those retailers offering choices, less than a third asked for subscriber preferences regarding channel or frequency preferences. The steep difference between retailers offering shopping prefer-ences versus other preferences may be a result of marketers feeling their most significant challenge is targeting recipients with highly relevant content, as MarketingSherpa reported in its “2011 Email Marketing Benchmark Report.” But while increasing relevance is absolutely critical, savvy marketers should also offer subscribers as much control over channels and frequency as applicable to ensure you’re communicating with them on their terms.

For example, a customer might prefer SMS for time-sensitive deal alerts, email for shipping confirmations, and his or her Facebook feed for contests and special promotions. Moving forward, as more digital communication channels and platforms spring up alongside email and consumers increas-ingly prefer different channels for different types of messages, this aspect of preference centers will become more important than ever.

Location of Opt-in on the Home PageWith the vast majority of retailers now including an opt-in link on their home pages—more than 90 percent did so in 2008 and 2009—we turned our attention in this year’s study to the location of the opt-in on this page.

Nearly half of retailers placed the opt-in link at the bottom of the page, while slightly more than one-third placed it at the top of the page.

With retailers looking to build a quality customer base in a competitive landscape, list growth is an important consideration. Marketers would be wise to consider featuring this call to action more prominently, placing it above the fold to increase the likelihood that it will be visible to site visi-tors. Bottom line: You want to make it easy and obvious for website visitors to find the sign-up page rather than forcing them to search for it.

47%

18%

36%

Location of Opt-in on Home Page

Bottom

Middle

Top

Location of Opt-in Throughout WebsiteWith many consumers arriving at retailers’ websites via search engines and thus landing at various pages within these sites, it’s a good idea to include opt-in opportunities beyond the home page. The majority of retailers have embraced this notion—particularly top-performing companies—with more than 90 percent of Top 500 retailers and upwards of 80 percent of remain-ing retailers featuring the opt-in link prominently throughout the site.

To maximize list growth, we recommend promoting email programs on every page on your site, using a name or term that makes it obvious what visitors are signing up for. And don’t stop there: Include an email opt-in form or link on your social network pages so you can attract a new group of engaged customers.

92%84%

8%16%

0

10

20

30

40

50

60

70

80

90

100

Top 500 Remaining Retailers

Companies Featuring Opt-in Prominently Throughout Website

Yes

No

28%

33% 33%

14%

23%21%

0

5

10

15

20

25

30

35

2008 2009 2010

Retailers Offering Options at Opt-in

Top 500

Remaining Retailers

56%

35%

33%

0 10 20 30 40 50 60

Shopping Preferences

Channel Preferences

Frequency Preferences

Types of Preferences Offered by Companies Who Gave Subscribers Options

All Retailers

Location of Opt-in on Home Page

Companies Featuring Opt-in Prominently Throughout Website

Retailers Offering Options at Opt-in

Types of Preferences Offered by Companies Who Gave Subscribers Options

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relevancy and the use of techniques such as transactional messaging and behavior-based triggers. Most retailers are finding great success with an increase in frequency during the holidays, often doubling their email cadence. But the smartest retailers are combining an increase in frequency with the addition of relevant new message streams, greater use of emails triggered off of behavior, and use of segmentation to better target subscribers based on their activity levels.

Informing subscribers when they opt in of the frequency of your communications can make them much less likely to unsubscribe or report your messages as spam because of dissatisfaction with frequency of contact. In addition, if recipients see your emails as relevant and valuable, frequency becomes somewhat less of an issue. So instead of agonizing over the optimum message cadence, consider asking, “How do we send more relevant emails, more often but with the same or fewer resources?”

Of course, sending too few emails can be just as harmful as sending too many, with silence setting the stage for inactivity just as much as overmailing recipients can lead to unsubscribes. More and more top-performing retailers are recognizing that the first 30 days after opt-in are arguably the most critical in your new subscriber relationship, with the number of companies sending zero emails decreasing for the fourth consecutive year among Top 500 retailers, from 35 percent in 2007 to 10 percent in 2010. There was, however, a slight uptick in this category among remaining retailers, with 24 percent going silent in 2010 compared to 19 percent in 2009, suggesting these companies haven’t fully grasped the risk of subscribers forgetting they signed up for an email program if retailers wait too long to communicate with them.

Use of Double Opt-inConcerns about privacy and SPAM certainly aren’t going away any time soon, so this year we decided to look into whether these concerns were leading retailers to consider double opt-in procedures. Double opt-in, a sign-up method that requires recipients to confirm and then reaffirm that they want to receive emails from a sender, can be a powerful way to ensure high list quality, increase responsiveness and minimize future spam complaints and is actually required in some countries. But the additional step required to confirm the subscription often produces from 20 percent to 40 percent fewer new subscribers compared to a single opt-in approach.

It came as no surprise, then, that more than nine out of 10 retailers in the study used single opt-in. Interestingly, fewer top 500 retailers embraced double opt-in (6%) than the remaining companies (11%).

If you do use a double opt-in subscription process, be sure to explain it on the opt-in page so recipients will be expecting it, send the confirmation immediately, make sure to use a “From” name that recipients would expect to see so they don’t mistake it for a message from an unfamiliar source, and keep the subject line simple.

7%

93%

Companies Using Double Opt-in

Yes

No

Percentages reflect allretailers in the study

7%

6%

10%

22%

23%

22%

10%

3%

2%

5%

17%

32%

25%

15%

1%

2%

7%

14%

27%

27%

22%

0 5 10 15 20 25 30 35

>30

21 to 29

16 to 20

11 to 15

5 to 10

1 to 4

0

Top 500 Companies' Email Volumes in First 30 Days

2008

2009

2010

3%

2%

2%

8%

16%

47%

24%

1%

2%

4%

9%

24%

41%

19%

1%

1%

2%

7%

21%

37%

31%

0 10 20 30 40 50

>30

21 to 29

16 to 20

11 to 15

5 to 10

1 to 4

0

Remaining Retailers' Email Volumes in 30 Days

2008

2009

2010

Emails Received During the First 30 Days Even as new marketing channels have emerged during the last few years, email’s effectiveness and efficiency in engaging customers and driving revenue has prompted retailers to email with increased frequency. During the last four years, the percentage of Top 500 retailers sending 11 or more emails (including welcome emails) within a 30-day period has more than doubled, from 20 percent in 2007 to 45 percent in 2010. The remaining retailers have also upped frequency, though at a more modest pace, with 10 percent sending 11 or more messages in ’07 and 15 percent doing so within a similar 30-day period in ’10. (Note: Since this the study is conducted during the holiday season, frequency is higher for retailers than other times of the year.)

Is emailing much more frequently a good strategy? That’s a difficult question to answer since the optimal cadence and frequency may vary from recipient to recipient and can also be impacted by message

Companies Using Double Opt-in

Top 500 Companies’ Email Volumes in First 30 Days

Remaining Retailers’ Email Volumes in 30 Days

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Welcome Emails The best welcome programs engage new subscribers immediately, introduce them to your entire email program, and reduce unsubscribes, spam complaints and inactivity down the road. And many retailers have embraced welcome campaigns, with roughly two-thirds of online retailers in the 2011 study sending new subscribers a welcome email or series.

Savvy retailers can use welcome messages to perform key functions such as confirming subscription details, restating the email program’s value proposition, asking to be added to the address book, inviting customers back to fill out a profile, offering an incentive if appropriate, and providing contact information.

To maximize the effectiveness of a welcome program, follow up your first welcome message with a timed series of emails that show subscribers more of what you’re about. You might highlight new product lines, remind them of your return policies or even provide a survey to learn more about their shopping habits.

First-Name Subject Line PersonalizationIn the average inbox, there are likely scores of promotional messages boasting similar subject lines such as “20% Off and Free Shipping.” Within this sea of sameness, subject lines that are personalized to the individual recipient along with message content can stand out.

For the fourth consecutive year, an average of only one in 25 retailers used personalized subject lines—defined here as including the recipient’s name in the subject line. First-name personalization clearly remains a much-debated practice, with some companies swearing by the practice and others saying it reeks of spam. Regardless, consider testing it, using the approach when appropriate rather than as a default prefix in your subject lines.

Welcome Emails

3%

2%

2%

8%

16%

47%

24%

1%

2%

4%

9%

24%

41%

19%

1%

1%

2%

7%

21%

37%

31%

0 10 20 30 40 50

>30

21 to 29

16 to 20

11 to 15

5 to 10

1 to 4

0

Remaining Retailers' Email Volumes in 30 Days

2008

2009

2010

68%

32%

Companies Sending Welcome Emails

Yes

No


68%

87% 89%

53%

76%70%

0

10

20

30

40

50

60

70

80

90

100

2008 2009 2010

Top 500

Remaining Retailers

4%

96%

Companies Using First-Name Subject Line Personalization

Yes

No

Offering a Sale or Discount IncentiveOffering sales or discount incentives in emails can make them more enticing to customers and, when used judiciously, can increase revenue. For the second consecutive year, nearly nine out of 10 Top 500 retailers offered sales or discounts at some point during the 30-day study period, and 70 percent of the remaining retailers did so as well.

Companies Sending Welcome Emails Companies Offering Sales or Discounts in Emails

Companies Using First-Name Subject Line Personalization

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Use of VideoAmong the myriad communication channels, video stands out for its ability to humanize offers and tell a story uniquely. And in the right situation, it can yield increased conversion rates and order values. Yet perhaps because of the challenges video presents, such as production costs and playability in various email clients, companies continue to be slow to embrace this medium in email—though that may be gradually changing.

For this analysis, we defined “use of video” as including actual video within the email or use of animated gifs or static images that were hyper-linked to a Web page where the video was hosted. While the percentage of retailers using video in at least one email remained low in 2010—only 7 percent—this did represent a 50 percent uptick from the previous two years. Given the power of video to engage, it’s worth taking a careful look at this medium.

When considering whether to incorporate video into your email program, ask yourself whether it would be relevant and add value to the customer experience. If so, test the use of video versus static images, keeping video length less than 45 seconds, placing it above the fold and checking to see whether it will properly display in the email clients used by most of your customers. Finally, make sure to measure success metrics to see if your video is supporting your message objectives and engaging subscribers.

Not only are the vast majority of retailers using discounts as part of their email programs, but they’re including these incentives in the major-ity of their messages: 69 percent of the Top 500 retailers who included discounts in their messaging did so in three-quarters or more of their emails—and 35 percent did so in every one of their messages.

When leaned on too heavily, a continuous reliance on “sale” promotions can have a negative impact on margins and brand perception. Savvy marketers should also focus on value, using targeted, lifecycle and behavior-triggered messaging to strengthen relationships with brand-loyal customers.

Linking to Social Media SitesAs the number of channels grows and customers move in and out of these channels throughout the day, many marketers are realizing that taking an integrated multichannel approach can significantly increase your chance of getting your message front and center. With nearly 600 million Facebook users and 150 million Twitter users out there and most companies increasing social media budgets (according to MarketingSherpa’s “2011 Email Marketing Benchmark Report”) retailers are increasingly using email to promote social sharing and social channels.

As in 2009, promoting social sharing and channels in email continues to be a key distinguishing factor between Top 500 retailers and remaining com-panies in this evaluation, with Top 500 retailers more frequently recognizing

52%

13%

2%

33%

69%

13%

4%

13%

0 10 20 30 40 50 60 70 80

75-100%

50-74%

24-49%

0-24%

Percent of Emails from First 30 Days Offering Discount

Top 500

Remaining Retailers

42%

20%

11%

9%

8%

7%

4%

0 10 20 30 40 50

All three

Free shipping, % off

% off only

$ off, % off

Free shipping only

Free shipping, $ off

$ off only

Types of Discounts Offered

All Retailers

7%

93%

Companies Offering Video in at Least One Email

Yes

No

Types of Discounts OfferedWhen it comes to sales and discounts, different offers appeal to different customers. Some will go for free shipping, others will be enticed by a percentage off, and still others will be intrigued by seeing the actual dollars saved. According to this study, retailers who offer discounts frequently mix and match among these three categories. In fact, “all three” is the most popular option, particularly among Top 500 retailers, with 45 percent of this elite group offering all three discounts in the same message, almost double the number of remaining retailers (23 percent) who did so.

Including all three discount options makes strategic sense since you’ll help ensure you’ve appealed to the widest possible audience. To maximize conversions, don’t make customers think too hard—do the math for them, calculating exactly the savings they’ll enjoy so they can get a full visual picture of the offer.

Percent of Emails from First 30 Days Offering Discount

Companies Offering Video in at Least One Email

Types of Discounts Offered

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Using Cart AbandonmentShoppers abandon their carts for many reasons. Some get interrupted, some just aren’t ready to buy yet, and others use the cart as a wish list.

Checkout-reminder emails can bring some of those shoppers back, giving retailers a competitive advantage and boosting the bottom line. Yet only 17 percent of Top 500 retailers are sending cart recovery emails—and that percentage is nearly three times the rate of the remaining retailers.

To maximize the effectiveness of cart abandonment emails, retailers should adopt a service tone. Offer to complete the transaction in other channels, such as through live chat or a call center, and ask if the shopper had a problem at checkout. And strike while the iron is hot: Generally, sending your first message within an hour or two of abandonment is most effective. According to research conducted by the Massachusetts Institute of Technology, 90 percent of ecommerce leads go cold within one hour.

the importance of maintaining a strong connection between both popular channels. More than three quarters of Top 500 companies inserted social links into emails, while barely half of the remaining retailers did so.

Retailers are also embracing the trend of including a “Like” or “Follow” link within email messages to drive more traffic to their social network pages and encourage related participation. More than 80 percent of retailers that include social links in emails include a “Follow”-type invitation.

They may, however, be overlooking another important opportunity to spread their message socially. By comparison, about three in 10 retailers who in-clude social call-outs in emails also included social-sharing links encourag-ing recipients to share content. While social-sharing links aren’t appropriate for all communications, they can increase message reach by an average of 24 percent, according to Silverpop’s benchmark study, “Emails Gone Viral: Measuring ‘Share-to-Social’ Performance.”

Once retailers adopt this practice, they should make the most of social-sharing initiatives by testing offers, copy and location to find out which are most “shareworthy.” Long newsletters are likely to be shared less, while other content practically begs to be shared—such as one-time-only offers, store opening invitations or new product announcements.

60%

78%

43%

54%

0

10

20

30

40

50

60

70

80

90

2009 2010

Companies Including Social Links in Emails

Top 500

Remaining Retailers

17%6%

83%

94%

0

10

20

30

40

50

60

70

80

90

100

Top 500 Remaining Retailers

Companies Sending Cart Abandonment Emails

Yes

No

76%

20%

4%

Number of Emails in Cart Abandonment Campaigns

1 Email

2 Emails

3 Emails


11%

71%

18%

Types of Social Links Included in Emails

Social Sharing Only

Like/Follow Only

Both


Number of Emails in Cart Abandonment CampaignsOf the retailers who sent cart recovery messages, roughly three-quarters sent one email, while the other 25 percent delivered a multimessage campaign.

Optimal timing and frequency will vary based on the site and time sensitivity of the transaction, but retailers looking to boost results should consider a multistage series, such as a three-part campaign in which the first reminder is sent within an hour of abandonment, the second approximately 24 hours after abandonment, and the third about a week later.

To help determine what cadence works best for your company, test a few different timing and frequency options and adjust accordingly.

Companies Including Social Links in Emails

Companies Sending Cart Abandonment Emails

Number of Emails in Cart Abandonment Campaigns

Types of Social Links Included in Emails

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31%

40%

34%

23% 24%22%

0

5

10

15

20

25

30

35

40

45

2008 2009 2010

Offered Preferences at Opt-out

Top 500

Remaining Retailers

Preference Centers for Unsubscribers

51%49%

Companies Offering Incentives in Cart Recovery Emails

Yes

No

Preference Centers for Unsubscribers

51%49%


Yes

No

Use of Incentives in Cart Recovery EmailsRetailers are nearly split down the middle when it comes to offering incen-tives in cart abandonment emails, and with good reason: Doing so can potentially boost revenue but is also often unnecessary, especially in the initial reminder email.

Making promotions less predictable can reduce this risk. For example, you could offer a percentage off—the most popular incentive among retailers in this study—only for first-time shoppers or visitors who abandon their shop-ping carts when the cart value exceeds a predetermined dollar amount.

Also, keep in mind that it might only take a gentle reminder (and not an incentive) to complete the sale. To maximize revenue, an emerging best practice approach is to not offer an incentive in the first of a multipart series, but then offer a modest incentive in the second email and your most aggressive offer in the final email. Forty-five percent of the retailers who employed multimessage campaigns followed this practice, waiting until the second email to offer an incentive.

Conclusion/Lessons LearnedWith communication channels shifting and email volumes continuing to increase, buyers have less patience than ever for irrelevant messages. Because email is timely, convenient and permission-based, it has become many consumers’ preferred channel for communications with companies and brands. And for retailers, its proven ability to efficiently drive revenue is obviously very appealing. But email’s viability as a successful commer-cial channel rests on how responsibly marketers use it.

Savvy retailers understand that relevance in today’s digital marketplace is more about delivering the “right message at the right time” than simply broadcasting generic messages and crossing your fingers. To cut through the noise, you must listen, learn and understand your subscribers’ prefer-ences and behavior and focus content on their needs rather than yours.

As such, marketers will need to use every tool at their disposal to under-stand and listen to consumers and provide focused content and well-timed delivery. Make it easy for subscribers to sign up for your email program with a prominent opt-in link, and offer them choices throughout the relationship regarding how you’ll communicate with them. Use a welcome series to engage them from the start, send relevant content triggered by their behaviors, preferences and demographics, and integrate email and social media so they complement one another and work toward your revenue goals.

By approaching each person in an email program as someone to get to know rather than a bull’s-eye being aimed for, retailers can create a deeper level of engagement, leading to bigger sales, higher increased ROI and loyal customers.

51%49%


Yes

No


Preference Centers for UnsubscribersNot everyone who clicks the unsubscribe link in an email actually wants to end the relationship with your company. But if you don’t give them options, or if you make the ones you have hard to find, you will certainly lose them.

Yet despite the fact that directing those who wish to unsubscribe to a combination preference page/unsubscribe page can help lessen list churn, less than one-third of retailers are doing so—and the number embracing this best practice remained flat from 2009 to 2010. Top 500 retailers are still much more likely to use a preference page at opt-out than other com-panies, though, with a double-digit percentage-point difference separating the two groups for the third straight year.

For retailers using this technique, it’s important not to make the unsub-scribe language or process too confusing or complicated—you want to make it quick and easy for those who really do want to leave your list. But do make it clear that they can choose to do something besides opt out. Your subscribers’ needs and interests change over time, and if you don’t give them a chance to revise their current preferences, you could lose the ability to communicate with them forever.


Offered Preferences at Opt-out

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