The Inbox Battle: Studies Show Paybacks Retailers See From Personalized Emails

Written by Debbie Hauss
Today’s email-savvy consumers appreciate a personalized, well-targeted email promotion, but many abandon a retailer if they have a negative email experience. Smart retailers know their best customers and provide them the best deals at the best times via opt-in permission-based email. Two recent research studies confirm this assertion.

The average consumer has opted-in to email communication from nearly four retail companies, according to Epsilon’s 2008 email branding study, conducted in October 2008 by ROI Research of Lancaster, PA. Of the sample that receive permission-based emails from retailers 56% say that they are “more likely to buy from companies that send (them) email.” Furthermore, 61% of the same group report that “the email (they) receive from retail companies has a direct impact on offline activities like shopping and making purchases.”

Email users also are spending more time with permission email, reports Merkle Interactive Services in its sixth annual “View from the Inbox” study. 69% of permission email users spend 20 minutes or more reading their email on a weekly basis in 2007, up significantly from the previous year. The study reports that 50% of survey respondents made an online purchase in the past year as a result of PEM – up 3% from the previous year. 50% of respondents also claim that a company that does a good job with email influenced their decision to do business with it, either online or offline.

Bad Email Practices Lose Customers
An email practice can be considered “bad” when it results in a decrease in sales or lost customers. Email recipients may respond negatively to too many emails sent too frequently or emails that are too general (not personalized or relevant to the recipient). Nearly 75% of Merkle respondents ranked irrelevancy as their top reason for unsubscribing from a company’s email program and 66% of email users list mail frequency as a reason to unsubscribe. Approximately 32% say they stopped doing business with at least one company as a result of their poor email marketing practices.

To reach the best balance of email frequency and relevancy, retailers must know their customers, particularly their best customers. Nearly 67% of respondents that receive email communications from retailers want to receive personalized content from companies, according to Epsilon. Specifically, consumers want content and offers based on their personal online behavior such as website and browsing activity and past purchases. Data from loyalty programs can help marketers target their best customers.

Another way to evaluate the effectiveness of current and future email campaigns, marketers should incorporate feedback mechanisms into the emails. Customers who are able to communicate their individual preferences have been shown to have 50% higher levels of engagement compared to those who don’t, Merkle reports.

Type of Email Determines Open Rate
Consumers appreciate relevant information. Approximately 41% of consumers ranked transaction confirmations as the number-one type of email they are likely to open, Merkle reports. Armed with that knowledge, retailers should consider adding promotional offers to those transaction summaries. Consumers also are likely to open account summaries (18% ranked #1).

But retailers should be careful about the type and frequency of promotional messages packed into transaction or account summary emails. A full 26% of customers do not react positively to promotions combined with informational emails. Marketers should be careful not to obstruct the main message of the email.

Other Key Findings
Epsilon reports that survey respondents said they took the following actions as a result of receiving permission-based email from a retailer:

• 88% downloaded/printed a coupon;
• 79% clicked a link in an email to learn more;
• 75% purchased a product online;
• 69% researched retail locations that carry a product;
• 67% purchased a product offline;
• 60% tried a new product for the first time;
• 55% shared a coupon or forward the email;
• 33% typed/copied the URL into their browser.
  

For more information on the Merkle study, go to: www.merkleinc.com/inboxwhitepaper/
For more information on the Epsilon study, go to: www.epsilon.com/pr/retailemailbranding

Timex Makes Time to Upgrade Cross-Channel Presence, Dials In Social Commerce

If ever there was an American brand that represented the past and present of marketing its Timex. After its legendary days of “takes a licking and keeps on ticking” the watch company now has to focus on the future and that means some creative budget management and cross-channel innovation. Its new marketing team is moving toward both goals.
“We did a fair amount of brand research last year and found that there was a very high unaided and positive awareness of Timex as a brand,” says Online VP Calvin Crouch. “But people did not see us a very exciting or stylish brand. We felt like we were in a very similar spot to Oldsmobile a few years ago where it needed to prove that ‘we’re not your father’s Oldsmobile.’”

With a limited budget and marketing staff, Crouch set out in May 2008 to define the brand’s customer base, business goals, branding targets and ecommerce mission. Timex matched its three sub-brands to its most active customer segments. TimexStyle is the mid-priced women’s oriented brand. It has recently scored a few public relations wins, placing one of its models in People’s Magazine’s “hot and not” issues. It also makes use of style guru and Timex spokesperson Amy Goodman on its website. Timex Ironman is the closest thing to a traditional brand the company has, creating mid-priced digital watches for casual and style conscious athletes. TimexExpedition is where Crouch wants to break out. It is a higher-priced more extreme sports focused brand.

Crouch has implemented distinct images and web presences for each separate brand, but would like to move toward funneling all traffic to the Timex.com site. That site generated a 15% traffic boost from 2007 to 2008. So far this year, traffic is up another 10%.

Its ecommerce effort is in its nascent stages. Crouch says Timex doesn’t currently have a large customer database. One of his goals is to increase it and the corresponding voice of the customer that comes with it. Toward that end Timex recently added BazaarVoice’s online review software. He believes it will create a wealth of user-generated content that the brand will leverage in its quality assurance efforts, as well as its new product development.

“We run our site on the Amazon platform, but we chose to work with Bazaarvoice on our social commerce initiatives because they are on the cutting edge of the market, and we appreciate their culture and focus on innovation,” Crouch says. “By adding Bazaarvoice, we are ensuring that our customers can share their authentic opinions about our products and make the best purchase decisions possible.”

Timex worked with the Bazaarvoice team to integrate into its Amazon eCommerce platform. That included hosted technology, advanced analytics, and syndication. Tag-based social navigation allows Timex shoppers to immediately surface the most relevant reviews from their peers.

Timex’s ecommerce effort may be starting to find its legs but its retail partners lack nothing. WalMart, JC Penney, Target and many sporting goods chains have been in its corner for years. Crouch says the customer data and website traffic data are shared with key accounts by sales teams on an “informal” basis.

“We know that traffic is up, our ecommerce numbers are improving and we’re finding out more about our customers,” he says. “We’re going to look to paid search and organic search to drive down our costs per lead, and keep our eye on the goal of driving more traffic.”

Sears Adds Appliances, In-Store Pickup Features To Sears2go Mobile App

Written by Amanda Ferrante
Two months after unveiling its Sears2go mobile commerce website, Sears has added the capability for customers to browse, purchase and schedule delivery or pickup for major home appliances like refrigerators or washing machines, all on their mobile devices.

Powered by Usablenet, the Sears2Go mobile commerce web site is the first on-the-go technology offered by a U.S. retailer which pairs mobile commerce with services such as in-store pickup. The new application is designed to cater to consumers who use their mobile devices to browse the web for convenience while they are out of the home.

"There is an increasing population of "people on the go" that have smart phones and Internet plans," said Ravi Acharya, director, online business unit at Sears. "Daily commuters, for example, are a sample demographic where users can find and buy products on the go and pick up their purchases in stores on their way home."

The full appliance product line available at Sears2go joins a variety of other product categories, including apparel, electronics and computers, fitness and sports, jewelry, tools, toys and games. All categories support purchase and scheduling home delivery or in-store pickup through the mobile site. After purchasing an item on Sears2go, shoppers picking up their order in store will receive a text message alert when their merchandise is ready for pick-up. Sears2go is the first on-the-go mobile e-commerce site offered by a US retailer that pairs mobile commerce with Sears' best-in-class in-store pickup or delivery.

The new mobile component is part of Sears' overall strategy developed from witnessing the buzz and interest around mobile commerce. "We have been watching industry trends and testing various mobile capabilities for the past 2 years, launching various SMS based alerts, deals and marketing campaigns," says Acharya. "Therefore, moving into the mobile commerce space was a natural evolution as we noticed significant customer interests. Our key value proposition is to provide another convenient mechanism for customers to interact with us and the mobile phone is a very personal device that customers can use at any time of their choice to engage with us."

"The comprehensive catalog of products that Sears now offers on its mobile site delivers huge value in convenience to customers on-the-go," said Nick Taylor, President of Usablenet. Usablenet Mobile is a fully managed service that leverages the features and functionality of a company's existing Web site and extends it to all mobile devices worldwide in less than six weeks, requiring no client IT or Web design resources.

After purchasing an item on Sears2go, shoppers picking up their order in store will receive a text message alert when their merchandise is ready for pick-up. The mobile application also allows consumers to mix and match orders, choose different fulfillment options for different products. For example, if one item from a shopping list is available for delivery, but another is not currently in-stock, a text message will alert when the store has the product available.

Forrester: Shopper’s Show Cross-Channel Eagerness, But Satisfaction Levels Slump

Written by John Gaffney
Consumers continue to migrate toward cross-channel purchase behavior, but most are not too happy about the experience. That’s the conclusion of a Forrester Research report on cross-channel customer satisfaction, which defines channel migration behavior of more than 5,400 consumers during 2008.
The report, “How Satisfied Are Shoppers When Moving Across Channels?,” shows that $630 million worth (or 24%) of offline retail sales were influenced by Internet research in 2008, but shoppers also research products in the store and then purchase online. Overall, two-thirds of online consumers engage in some form of cross-channel shopping behavior when purchasing apparel, wireless products, consumer electronics, personal computers, and large appliances. That’s the good news. Forrester found the following areas that clearly need attention:

• Cross-channel experiences fell short of single-channel satisfaction. 82% of online consumers report satisfaction with buying experiences that begin and end in a store. However, among consumers who started their shopping experience online before going to the store to buy, satisfaction rates drop to 61%. Similarly, while 61% of online consumers report satisfaction with Web-only purchases, only 56% of consumers are satisfied with their buying experience when whey research in-store and then buy online.
• Consumers are more satisfied with online-to-store than other channel transitions. All three types of cross-channel experiences leave room for improving consumer satisfaction, but consumers rated some cross-channel experiences higher than others. Satisfaction for researching online and purchasing in a store was highest at 61%, followed by 56% for store-to-Web and 49% for Web-to-phone. Researching in a store and purchasing online produced the largest discrepancies across purchase categories — a 12% point gap from apparel (58% satisfied) to large appliances (46% satisfied).
• Large appliance shopping experiences left consumers the most dissatisfied. Cross-channel shoppers were the least satisfied when researching and purchasing large appliances across channels. This held true whether the shoppers moved from Web to store, store to Web, or Web to phone. Conversely, PC purchase transitions were among the most satisfactory across the board.

The report also found significant differences among age groups. Across all product categories except wireless, Older Boomers were the most satisfied Web-to-store shoppers. The most satisfied in wireless were Seniors, who were also pleased with consumer electronics and PC experiences.

Forrester analyst Adele Sage, author of the report, interpreted that data to mean that seniors have lower expectations because, for most of their lives, using the Web to research considered purchases wasn’t an option. Gen Y consumers’ satisfaction with Web-to-store is low. Their satisfaction scores averaged 13 percentage points lower than Older Boomers across all categories — except apparel. Gen Y consumers take the Web for granted and so expect the Web to be woven as seamlessly into their shopping experiences as it is into their daily lives.

The report recommends three strategies to improve cross-channel customer satisfaction:

1. Design experiences that support users’ goals. Make sure that you ask and answer the three questions: Who are your users? What are their goals? And how can you help them achieve those goals? The answers to those questions guide the design of interactions that provide users with the content and functionality they need in the channel(s) they use to complete their goals.
2. Use design personas to guide decision-making. Design personas — user archetypes that represent key user behaviors —contain detailed information on the motivations, goals, and behaviors of target customers. To help support the design of multichannel experiences, some firms create cross-channel scenario maps for personas that show customer paths as they move among channels.
3. Apply Review Methodology. An important step on the way to improving multichannel experiences is to diagnose usability problems that prevent users from accomplishing their goals. To get started, the report recommends retailers develop a description of their target user, write down a few goals that the user would have, and then try to accomplish those goals using the channels — both individually and in pairs — the way the user would.

This is Forrester’s first look at cross-channel satisfaction. It’s 2007 customer satisfaction study came up big for retailers, who comprised with four of the top five rated companies.

By John Gaffney, Senior Analyst
Already a competitive advantage, cross channel capabilities are about to become an even more distinct differentiator with the arrival of mobile commerce. While both consumer and marketers have been slow to embrace mobile commerce in the U.S., several sources point to the channel arriving in a significant way over the next two years.

A new study from Foresee Results titled “Mobile Apps: The Next Big Thing” shows mobile applications will be impacting retail sales sooner than may executives expect, and those merchants already prepared for cross-channel commerce will have a distinct advantage. The study from Foresee shows a 91% penetration rate for mobile phone ownership, but only about a third of respondents have used them while shopping. Foresee CEO Larry Freed expects that usage to double by the end of 2009.

“And I would also say that the retailers who can merge channels have a definite advantage as that adoption rate continues,” Freed says. “As the situation has developed consumers see definite advantages to the web experience in terms of information and inventory choices. And they see an advantage to the in-store experience, because it’s more personal and tangible. Mobile is the bridge between the two experiences.”

Freed is so bullish on the rapid acceleration of mobile usage for three reasons. First, he sees retailers making a priority of bringing the web experience into stores. Second, he believes competitive pressure will force their hand. And third, he expects the iPhone applications that started to appear in 2008 to become more commerce-oriented and less gimmicky.

During the 2008 season the vast majority of shoppers who did use a mobile phone as part of their shopping experience did not use retailer-originated mobile apps or Internet-based product information. Most used their phone to get a simple opinion about a purchase. Freed says this may indicate that mobile apps are very much on the “bleeding edge,” rather than the leading edge, of technology.

How mobile phone was used as part of retail shopping experience % of respondents
One in four shoppers who used a mobile phone during a shopping trip used the device to compare prices, while 15% used a mobile device to go online to check product reviews. Freed says this is a insignificant number, considering the small but growing use of smart phones and the fact that many retailer mobile apps were new this holiday or still in beta testing.

One surprising fact that Freed uncovered from the Foresee study was that the emergence of mobile as a fourth channel could ultimately have more of an impact on brick and mortar shopping than online. “In fact, of all the behaviors we study, only one was different for this group: greater likelihood to purchase offline. All the other scores are identical for those who shop with or without a mobile phone. Given the indications that people are using phones more often to actually call someone to get an opinion or to send a picture of an item (and less for price comparison shopping or store-initiated mobile apps), it would seem that, more often than not, the opinion they get encourages them to buy the item. Perhaps stores should consider ‘phone-a-friend’ promotions to encourage this kind of shopping behavior.”

Freed councils retailers to encourage smart phone users to adopt retailer-generated mobile apps, not only to ask about a product or send a picture of a product to a friend, but to compare online prices, remember specs of something they were researching online, and identify the proper model or version of a wish list item.

MAKING MOBILE COLLABORATIVE
In a separate report on the emergence of mobile commerce, a team of executives from Cisco’s Internet Business Solutions Group (IBSG for Retail presented their findings at the NRF Show in a Big Ideas Session titled, “Mobile as the Next Channel: Hype or Reality?” Jon Stine, IBSG, argued that retailers can no longer afford to ignore the internal and external benefits mobile devices bring.

“The productivity revolution that mobility represents has just begun,” said Stine. “The smart devices we have, like the iPhone will bring this to its height. When consumers walk into a store and they are going to mobile applications to check prices and SKUs at other retailers, that other competitor has entered your store. In the past, retailers asked the consumer to come to their brand. Then we asked them to find our website. Now it is possible for a brand to go along with the consumer as a shopping buddy. Mobility changes the paradigm. The numbers mobile can produce can and will be meaningful for those who prepare.”

Arguing that mobile commerce is at a tipping point, Cisco’s Lindsay Parker suggested retailers work closely with their customers on finding the most appropriate uses for mobile applications. By creating a collaborative experience out of the mobile channel, Parker pointed out that retailers have an opportunity to significantly increase margins.

Parker also reminded retailers that mobility is no longer limited to consumers; but some smart phone devices can increase store associate productivity for a two-way optimization of the device. “The mobile phone as a new channel is giving retailers a new way to position your brand to your shoppers. Previously it was about getting consumers in your store, but now it's about being with them 24/7 via their mobile devices. The mobile device enables information deliverability and harbors loyalty,” Parker said.

Cisco’s IBSG Director Lisa Fretwell pointed to three main opportunities for retailers to focus on in using the mobile channel:

• Productivity: By providing store employees access to information on a mobile device that they would have had to find manually, there are opportunities bottom line savings.
• Shopper productivity: Giving consumers access to tasks that previously could only be completed by store associates, such as self scanning for price checks provides convenience and reduces labor costs.
• Transforming the customer experience: New messaging channels provided by mobile devices are expected to have a dramatic impact on customer retention, and also provide new paths to increase basket size.

In order to get started tapping into the power of mobile devices, Fretwell suggested retailers focus on using mobility as an additional content source. “Be prepared to sell, but also be prepared to inform. The opportunity to inform consumers on the spot at point of purchase has just exponentially risen,” Fretwell said.

Sears Crosses Into Mobile Channel With Holiday Launch Of “Sears2go” Application

In an effort to make it as convenient as possible for its customers to find and purchase their gift items this holiday season, Sears has launched a new mobile shopping application, called Sears2go. The mobile commerce site allows consumers to find and buy merchandise through a mobile version of the company’s Web site.

Ravi Acharya, Director of eCommerce at Sears Holdings, says the company elected to launch the mobile application after “observing that certain customers were trying to access the website from a mobile device” and weren’t able to perform all of the functions they wanted. “More and more customers are using their mobile phones to shop online and Sears2go is completely geared for mobile devices with an emphasis on speed, usability and security,” Acharya says. “With the popularity of the iPhone and other devices, we are quickly seeing these devices emerge as the only point of contact you need. We want to make use of that trend and create a bridge to our other channels.”


An extension of Sears’ Fusion initiative, which is focused on making it easier for customers shop across channels through buy online, pick up in-store and other convenient services, the Sears2Go mobile commerce web site is the first on-the-go technology offered by a U.S. retailer which pairs mobile commerce with services such as in-store pickup.

Acharya says Sears will be testing different aspects of the mobile commerce site during this holiday season to determine which tools consumer utilize most often as well as how the application influences overall purchases.

To transfer the content and functionality of its online presence to a mobile device, Sears partnered with Usablenet out of New York. Acharya says the transition was fairly seemly and took only two to three months.

Jason Taylor, vice president of mobile products at Usablenet, pointed out that Sears built the Sears2go platform with a long-term view of cross-channel shopping. “It’s a very flexible platform to allow Sears to give access to promotions and product offerings via computer or phone.”

While other retailers have recently targeted mobile devices as a marketing medium, he says Sears now has a competitive edge by putting commerce functionality into consumers’ hands. “The one thing that we’re able to do for our partners is put purchasing on the phone,” says Taylor. “Before we have seen a lot of promotions on phones, but not the execution of purchases. We’re now putting that in the hands of our partners. They can now literally launch a site that offers full purchasing of tens of thousands of SKUs in the case of Sears. It’s integrated with Omniture so from day one they can see all revenues associated with mobile. I think that’s really the key aspect with regard to investing in mobile. You have to see revenue, especially in retail.”

Sears2go will offer much of the information available on Sears’ main website, including access to product reviews, comparisons, ratings, and store locators. The mobile site will only offer some product categories, however, focusing on apparel, electronics and computers, fitness and sports, jewelry, tools, toys and games with home delivery or in store pickup.

After purchasing an item on Sears2go, shoppers picking up their order in store will receive a text message alert when their merchandise is ready for pick-up. The mobile application also allows consumers to mix and match orders, choose different fulfillment options for different products. For example, if one item from a shopping list is available for delivery, but another is not currently in-stock, a text message will alert when the store has the product available.


In addition to researching products and making purchases directly from their mobiles device, Sears2go also allows consumers to opt-in to receive promotions from Sears to right their mobile phones. Users just need to text DEALS to 73277 to receive Sears Deals Alerts.

Acharya says Sears will also be promoting the launch of Sears2go via banner ads on high profile mobile sites through a partnership with AdMob and also doing targeted commuter marketing.

Circuit City Cross-Channel Pricing Strategy Strikes A Positive Note

Good news out of Circuit City has been tough to find of late. But maybe it’s onto something with its recently promoted “one price” strategy. Analysts have lauded the move as a positive and even essential cross-channel strategy.

The “one price” promise policy guarantees the same price for merchandise regardless of whether it is purchased online or in-store. It was announced in mid-October and is the focus of Circuit City's holiday marketing program. However, the policy has not been copied by any major retailer. In fact, Best Buy’s policy states that consumers will be given the lower price if they find that an online item is available in the store at a different price. Translation: Best Buy, and other retailers have priced in-store items differently than their website says.

Circuit City believes the policy’s need is backed up by research. SPSS, Inc. studies showed that nearly half of consumers surveyed (47%) believe retailers post different prices for the same merchandise in their stores and on their Web sites. Moreover, more than half of shoppers (51%) said they would place more trust in a retailer who offered the same prices on the Web and in their stores.

New research supports the consumer expectation of consistent cross-channel pricing. Greg Buzek, Founder and President of IHL Consulting Group, says his company will release a report in the coming weeks that quantifies it. According to IHL, consumer electronic stores over the past 30 days have seen 26% of their in-store customers leave without purchasing for various reasons. However, of that 26%, 21% left because the in-store price did not match online pricing, or other promotional pricing. That means 6% of all customers are leaving due to pricing differentials.

“Retailers who don’t align their pricing are hurting themselves,” Buzek says. “One of the most frustrating things a consumer will come up against is finding that the in-store price does not meet their expectations. It is completely within their expectations to get that, and retailers will lose sales if they don’t meet that expectation.”

George Lawrie, the Forrester Research Senior Analyst who wrote a study earlier this year on consumer cross-channel expectation, agrees that Circuit City is addressing a critical issue. “In general, guaranteeing the same price through all channels appears to fly in the face of common sense and even of customer expectations,” he says. “But there are good reasons that Circuit City and other retailers selling home computing and consumer electronics are obliged to offer ‘Internet prices in our stores.’”

Lawrie believes the “one price” strategy is a hedge against aggressive discounting by competitors. He says discounters use supply chain muscle to encroach on consumer electronics retailers’ territory, and then lack the in-store expertise to add peripherals or even enhance the customer experience. Smart consumer electronic retailers, will use the internet, he says, to drive in-store traffic because their competitive advantage is in the store.

“Consumer electronics purchases are complex and the decision making process is information intensive,” he says. “Consumers often spend hours understanding technical specifications and researching online even if they need to pick up the product for an urgent deadline such as a college start or a birthday. Window shopping now has an entirely new meaning: 54% of online consumers researched a product online and purchased it offline, and 37% researched offline and purchased online as long ago as 2005. Half of these consumers cited price comparison among retailers as the reason for researching online, more than any other factor. When it came time to buy, those who purchased offline cited immediacy, the ability to see an item in person, and shipping costs as the top deterrents to online purchasing.”

The pricing alignment will require infrastructure alignment as well. Any retailer who intends to promote their capacity to price consistently, and then have the ability to be agile with inventory, needs to be prepared on the back end.

“No doubt that Circuit City has raised the bar for expectations of consistency, and I give credit to them for that,” says Escalate Director Of Product Marketing Dave Bruno. “A lot of retailers would struggle with the need to have accessible information across all platforms. The technology is certainly available to accomplish that.”