Stores find e-mail attracts buyers better than Facebook
Even as retailers debate the efficacy of social-media marketing on Facebook and Twitter, they have no doubts about the power of a decades-old technology to drive sales. The killer app is called e-mail.
Retailers as disparate as Williams-Sonoma Inc. and Home Depot Inc. have become much better at tailoring e-mails to specific customers rather than the one-size-fits-all blasts that once dominated this type of marketing. Measured by sales per dollar spent, e-mail outperforms social-media advertising three to one, according to the Direct Marketing Association, a trade group founded to provide accurate marketing data. That explains why retailers will send 19 percent more e-mails this year.
Compared with social-media, e-mail marketing will never be sexy, said Ted Wham, a vice president at Responsys Inc., a San Bruno, California firm that helps companies build digital relationships with customers.
"But it depends on what's sexy to you," he said. "In my opinion, making a high profit rate and bringing in a lot of incremental dollars is very sexy."
Competition is fierce this holiday shopping season as the National Retail Federation predicts sales will rise 4.1 percent to about $586.1 billion in the period, compared with a 5.6 percent increase in 2011. Online sales may grow to a record $43.4 billion in the last two months of the year, a 17 percent increase from last year, according to ComScore Inc.
Major retailers are on track to send subscribers an average of 211 promotional e-mails in 2012 compared with 177 last year, according to Responsys. The boom in smartphones means consumers check e-mail more often, at a time when data and web tracking are becoming more mainstream and easier to use.