Free Shipping Marketing Promotions Soar During Week of Black Friday; Signals Channel Shift to Online

Tuesday, November 29, 2011 by G.B Heidarsson
With more than one-third of consumers saying they'll try to save money this holiday season by shopping online, retailers have now answered their call with 'Free Shipping' offers galore. eDataSource's analysis of email, Twitter and Facebook marketing messages from more than 2,000 retail entities since October 17, 2010, shows that brands used "Free Shipping" fairly consistently week-over-week until making a significant jump during the week of Black Friday. For the week of November 21, the promotions went up 107% in Twitter, 81% in email, and 63% in Facebook. This jump signals a shift in focus from driving in-store traffic to accelerating online sales with free shipping as the trigger. I'm surprised to see it didn't happen even sooner since value is still of such importance to consumers this year.


Free Shipping Emails


Twitter Activity Far Exceeds Email and Facebook Messaging

Reflecting the fact that free shipping is one of consumers' most anticipated and favorite holiday promotions, we found Twitter activity, including Tweets and Retweets, unexpectedly high around the offer. Twitter promotions were the most prevalent of all digital marketing free shipping messages over the past six weeks, outnumbering email messages using the term in the subject line by almost eight to one (77%) and outpacing similar Facebook promotions by 279 percent this past week. Tweets containing "free shipping" not only consistently and thoroughly outnumbered similar e-mail messages and Facebook posts throughout the past several weeks, they went up 154 percent from the week of October 17th. The fact that Twitter messaging around free shipping was so high shows how viral of a medium it can be. And while Facebook seems to have been underutilized in this regard, brands should not overlook these social media channels for promoting such a highly sought-after deal. 

Additional highlights:
  • Email messages containing "Free Shipping" steadily increased week-over-week until the week of Black Friday, when they almost doubled (81%) from the week before and more than doubled the 2-4 weeks prior (132% more than the week of Oct. 17).

  • Tweets containing "Free Shipping" consistently outnumbered emails with the same term in the subject line by 50-80%, depending on the week.

  • All digital marketing messages with "Free Shipping," including Facebook (63% higher than week prior; 96% higher than week of Oct. 17) peaked during the week of Black Friday.
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Don't discount flash-sale sites just yet: Consumers trained to expect online bargains

Tuesday, November 29, 2011 by G.B Heidarsson
From last holiday to this year, eDataSource analytics indicate a significant increase in email subscribers for the leading flash-sale sites -- an astounding 81% for the four sites we've been monitoring during this time period -- Gilt Groupe, Rue La La, HauteLook and ideeli. And with 58% of U.S. online adults saying they are more price-conscious today than they were a year ago', brands and retailers should strongly consider working with recognized flash sale sites to promote a sense of urgency and drive incremental revenues. 

We looked at the subscriber acquisition rates for the top-5 flash-sale sites -- the four previously mentioned plus MYHABIT -- from December 2010 until October 20, 2011, and found that as they continue to grow their consumer bases and try new strategies, making these companies your friend instead of your foe might just be worth a try.

Gilt Groupe grew their list size by 108%; Rue La La and HauteLook both increased their reach by 80%; Ideeli went up by 20%; and the newest entrant MyHabit, which Amazon just launched this year, went up a whopping 151% between the end of June and October 20th. 
 
Inboxes receiving flash-sales email


Subscriber acquisition via social motivators

To grow their customer bases and drive revenue, flash-sale sites rely on the social nature of their shoppers and some basic behavioral motivators.  For one, there's a level of exclusivity that comes with shopping on a flash-sale site. You need to become "a member", and some are even by invitation only. For two, they typically offer a well "curated", limited inventory of unique and hard to find products that are perceived to have higher value. And three, you need to act quickly - as soon as you receive the e-mail - so you don't miss out. Because of these characteristics, consumers are compelled to share the fun experience with their friends and family who also start to make flash-sale shopping and impulse buys a daily habit. And it doesn't hurt that most of these sites post on Twitter and Facebook multiple times a day, making it even easier for consumers to share and advocate on their behalf.  

 
Average email open rates signal trouble, but not alarm

Unfortunately, email open rates for the top-5 flash-sale sites are average, ranging from 7.26% for Gilt Groupe to 13.18% for Hautelook. 
 
Open rate comparison


This disparity may seem strange to you - it does to me - given that Gilt, who probably has the highest price point and the most exclusive products, also has the lowest open rate. So what gives? I have a few guesses:

1.) Maybe Gilt has a lower level of hygiene effort for the list in general, and therefore sends to more inactive recipients. 

2.) They also seem to have a little more of a challenge with their inbox delivery than the other brands, which can of course negatively affect open rates. Gilt Groupe just recently changed their email service provider and the new IP address they are using might not have built up the reputation necessary to have optimal inbox delivery.

3.) The price points for Gilt may be out of reach for their newer audience members: the subscribers they acquired after expanding their membership and opening it up to the general population without the need for an invitation. This may have hurt Gilt's air of exclusivity. 


Go ahead, make my day

Some have said that flash-sale sites' days are numbered, but with consumer bases that large, and with players like Amazon and Nordstrom (with MyHabit and HauteLook, respectively) entering the space, I don't see them disappearing. I hope to see them continuing to evolve their models and making their subscriber databases more useful for targeting in order to increase inbox placement and opens. 

Lastly, while I wouldn't discount working with flash-sale sites, there doesn't seem to be a lot of room for any other new entrants unless they have special merit or can differentiate themselves within the new social commerce environment. I'd love to see all types of flash-sale sites succeed. Let me know what you think in the comments below. 


' Forrester Research, "US Online Holiday Retail Forecast, 2011," November 11, 2011

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Waste not, want not this holiday season: Learn how top marketers maximize email revenues

Wednesday, November 9, 2011 by G.B Heidarsson
This article also published by Chief Marketer, Nov. 8, 2011


Deliverability, the percentage of email that gets through ISP filters, is an important metric commonly used by email marketers and service providers to measure success of email campaigns. But it is just the tip of the iceberg for knowing what's really happening to email when it gets into your subscribers' mailboxes. 

The Inbox Placement metric takes deliverability one step further by looking at actual inbox activity.
Did your message go into the Spam or Junk folder? Was it delivered in a timely manner? This information is crucial for many brands, particularly those that send limited-time offers and need to get their mail delivered on time or risk losing a sale.  

Deliverability is affected by bounces and anti-spam measures, and rates are based on the activity of your list. Inbox Placement rates represent the percentage of emails that actually arrive at their destination, and should be used as a key metric instead of determining deliverability based only on bounce rates. Why, if you're not in the inbox during crucial selling points like the holidays your email isn't going to be seen and you're wasting your efforts. 

What goes around, comes around

While the two metrics differ, each has its merit.  Low deliverability Market Sector
can indicate poor history with an ISP, poor list hygiene, or consumer fatigue with your emails, which triggers excessive spam complaints, soft and hard bounces, and/or IP blocks.  These issues present a real challenge, particularly in the fourth-quarter of the year, when ISPs are known to be more aggressive because of the increased amount of mail they have to process. So if you have a poor deliverability rate, you can probably guess you are mailing to inactive recipients, spam traps or sending irrelevant mail. 
On the other hand, inbox placement rates correlate directly with email activity such as opens and clicks and your history of sending relevant messages that people don't mark as spam. When consumers want to receive your mail, you build your reputation as a sender. And when your IP Reputation is good, ISPs are more inclined to let your future mail through to the inbox 
and you increase your chances to make a sale. 
IP reputation is fragile, as we can see from what happened in
the Gifts & Remembrances market sector during Valentine’s Red Envelope
Day earlier this year. This sector's sending volumes tend to spike during certain holidays, and Valentine’s Day is among the highest spikes in the year.
 
Looking more closely at this time period, we took an example of Red Envelope which was among those companies frequently broadcasting emails to the majority of their subscribers hoping to maximize revenue during this important season. However successful they were, they definitely left money on the table because we see inbox placement sharply drop at the most crucial time and in fact, it took weeks to recover. This should be
food for thought for any marketer hoping to maximize revenue in
the 4th quarter by increased frequency of full-list mailings.

How retailers with high inbox placement boost open rates

There are a variety of ways to improve your deliverability and inbox placement metrics, with list hygiene, cadence control and segmentation being fundamental. You need to understand the historic behavior of your subscribers to keep your list up-to-date and willing to receive your messages. If you keep mailing to non-responders or complainers as part of your standard promotional stream - or worse, just add them back to your list this holiday season - you will hurt your IP reputation and in turn, decrease the amount of revenue you could generate from email. 
Segmentation, which enables relevant messaging and timing, is essential to having good inbox placement. We compared the mailing activity of three online-only retailers - Buy.com, NewEgg, and Amazon - and determined that inbox placement and open rates correspond directly with how advanced their segmentation strategies are. Amazon uses highly evolved segmentation, sending very specific offers on very specific product categories based on the subscriber's most recent interaction, while Buy.com blasts most offers to their full list with high frequency. Not surprisingly, Buy.com experiences the most throttling, resulting in inbox-overlap, and has the lowest average inbox placement rates and the lowest average open rate of about 11%. Newegg's and Amazon's open rates are significantly higher, at 16.59% and 16.88% respectively.

Another sure-fire way to improve inbox placement is to send triggered or transactional messaging from the same domain IP as your regular promotional emails. These messages are sent based on a specific action (like a purchase) or event (e.g., when it's time to renew a subscription), so the emails are highly anticipated by the consumer. Since they are often opened, this will increase your overall reputation as a sender.  Walmart does this effectively, sending abandoned cart reminders, order confirmations and other automatically triggered messages from the same sending domain as their general deployments.

Lastly, spend time on your subject lines. Using the recipient's first name is well worth a test, and including an urgent call-to-action with a short time limit will create immediate engagement. Remember, it's not about sending as many emails as possible, it's about increasing revenue by getting your emails in front of prospective buyers. So, to guarantee those that are really interested in receiving your messages get your email this holiday, don't waste your efforts.

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Opportunity knocks this holiday season; despite rumor of consumer fatigue, email list growth and interaction still strong for daily deal sites.

Thursday, October 13, 2011 by G.B Heidarsson

What’s with all the talk about daily deals losing their appeal among consumers? Our findings show the opposite, but merchants and daily deal providers better change their tactics to make the most of their opportunities while they still have the chance – particularly for the holidays.


Figure 1eDataSource, a competitive intelligence company providing strategic analytics for email, social media and e-commerce activity for more than 800,000 consumers and 5,000 brands including Groupon and LivingSocial, has found that consumer interest for daily deals remains strong, but merchants and providers need to work harder and smarter to keep the conversions coming. While growth in new customer acquisition for the top-two daily deal sites has leveled off some in Q3 2011 – despite almost continual growth over the 3 quarters prior (see figure 1 below) – surprisingly, email open rates remain very strong (see figure 2) and in fact, are still on an upward trend.



Figure 2
With both Groupon and Living Social having close to or more than 50 million subscribers each in the U.S. and open rates consistently above 13 percent – which is extremely good for companies who mail every day – consumer interest is clearly still there. Then why do we keep hearing about the demise of daily deals? What our email behavior data shows is that consumers are still signing up and still opening their email messages, but the follow-through action must be lacking. Merchants and daily deal companies need to do more to make customers execute on the offers, either by making more personalized promotions based on consumer interests and/or previous purchases, or they need to offer deeper discounts still.   


Since the demand for small gifts increases exponentially in Q4, this data gives us hope for healthy daily deal sales during the holiday when consumer appetite for spending is strong. While the novelty may have worn off some, consumers just need a little more incentive to convert. The situation is favorable for some creative wrapping of deals this holiday season. 

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Low-cost airlines do the best job of acquiring email addresses; more mature airlines lag

Wednesday, September 7, 2011 by G.B Heidarsson

eDataSource, the leading provider of competitive intelligence data in the email and social media space monitors the email and social media activity of thousands of brands, among those the largest passenger airlines. We analyzed email activity and email marketing efforts of the largest airlines as a basis for this analysis

We ranked the top North American airlines by number of passengers as derived from the Annual World Airline Report for the top North American Airlines and then looked at email activity from August 6th to September 5th and compared communication frequency per traveler. This gave us some interesting insights into the airline industry’s communication strategies. Please refer to the chart below for an overview of the information we used for our analysis.

Airlines and Sending Domains

Passengers in 2010

Estimated list size

Detected open rate

Inbox Placement

 Estimated*  emails opened

Passengers w/email

 

Delta Airlines

 

e.delta.com

162,615,000

10,010,000

13.28%

97.18%

1,329,328

6.16%

Southwest Airlines

 

 

 

 

 

luv.southwest.com

106,307,000

16,210,000

14.89%

97.22%

2,413,669

15.25%

United Continental (Continental)

email.continental.com

99,452,000

4,450,000

14.56%

92.89%

647,920

4.47%

United Continental (United)

 

 

 

 

info.united.com

99,452,000

2,680,000

17.97%

91.63%

481,596

2.69%

American Airlines

email.aa.com

86,204,000

6,430,000

8.97%

95.00%

576,771

7.46%

US Airways

 

 

 

 

 

myusairways.com

51,853,000

4,330,000

13.19%

95.64%

571,127

8.35%

AirTran Airways

 

go.airtran.com

24,721,000

7,090,000

6.91%

96.33%

489,919

28.68%

JetBlue Airways

 

 

 

 

 

promo-em.jetblue.com

24,254,000

5,110,000

12.16%

95.71%

621,376

21.07%

Air Canada

email.aircanada.com

23,615,000

1,030,000

15.90%

91.93%

163,770

4.36%
































Before diving into this data, it is important to note that some of these airlines utilize multiple email sending domains intended for different purposes that are not purely focused on airline passenger communication and promotions of airline tickets. Some examples are AA’s frequent flyer program, AAdvantage, and Southwest Vacations both of which have been excluded from this comparison. For other airlines, some loyalty program messages and travel agency services are mixed in with the general stream of email and thus not possible to exclude from this comparison.

With that said, there are some interesting conclusions to be drawn from this data. First, the open rates among these airlines range widely from approximately 7% for AirTran to around 18% for United Continental. Some of this difference could be explained by looking at the relative list size compared to total passengers, but then again, Jet Blue retains the second largest portion of their passengers’ emails and still it maintains an open rate above 12%

Secondly, it is interesting to see that the sending list size for these airlines is in many cases only a fraction of the yearly number of passengers, indicating that many airlines have not done a good job of acquiring email addresses. This is especially interesting in light of the fact that so much of the airline ticketing has moved from traditional travel agents to ecommerce. One would think that this would make acquiring email addresses easy, but only the low-cost carriers JetBlue, Airtran and Southwest seem to have capitalized on this opportunity for marketing and communication purposes.

Now, who is doing the best job when it comes to email marketing? Two companies stand out from the rest in this study. Southwest and JetBlue as the most effective email marketers. This is due to impressively sized email lists and relevant enough marketing messages to keep their open rates respectively at 12% and 15%. Although the open rates by themselves are not impressive the fact remains that these airlines have some of the largest relative percentages of their passengers’ email addresses and thus are marketing to a wider spectrum of their total passenger group with the same or better open rates that their competitors. On the other hand, AirTran captures almost a third of their passengers’ email addresses, but fails to be compelling enough in their messages to have their recipients open their communications. They should take a look at their email frequency, promotion strategy and overall segmentation. Maybe AirTran can figure out how to get more relevant about their messaging so that more than 7% of their customers on average open the email they send them. This might be a great opportunity for their marketing efforts.

Probably the least impressive email programs come from American Airlines, United-Continental (United) and Air Canada. Lagging open rates (except for United) and low percentage of known email addresses for passengers indicate a general lack of focus on this important channel amongst many of the airlines.


What did we learn?

The airline industry is unique because of the opportunities it has to capture email addresses from passengers, not only during the ticket purchase process, but through their loyalty programs and alert programs as well. The largest carriers have a lot to learn from JetBlue and Airtran in respect to email address capture so that they in turn can use email as a stronger marketing channel to a larger portion of their prospective passengers. But list size is only one of the challenges. Messages have to be relevant to the sub-segments of your list to get interacted with. Open rates are generally a good measure of interactivity, and none of these carriers are capturing the attention of their audience in an impressive way.  The habitual reliance of traditional airlines on travel agency networks and brand advertisement may be partly to blame for their lacking list sizes. The low cost carriers on the other hand have focused on the efficiency of Internet marketing and ecommerce to survive and thrive and their focus on these channels shows in this quick study. 

No channel really competes with email in terms of ROI. Maybe it’s time for the airlines to divert some more of their marketing dollars to email, grow their lists, test, segment and concentrate on what is relevant to their consumers. Focusing on special offers, better service notifications and informative passenger information could be a good start. Perhaps today is the day to call a meeting with the whole IT team to figure out how to make sure all the email addresses that floating around in the system are being captured and put them to work. The low cost carriers are currently winning the race in email marketing because they realized that list size and penetration into their target customer group is the key to successful messaging. 


Sources:
The performance data used for this ranking is from eDataSource, which uses a listening platform and a consumer monitoring panel of over 800,000 consumers to gain insight into actual consumer interaction with emails from thousands of brands. The information in this blog is derived from estimates based on aggregates of these individuals email interactions and our own monitoring of the email and social media space. The passenger data used comes from the World Airline Report 2011**. Email performance data has not been verified by the airlines in question.
*This column refers to estimated average number of individuals who would open a campaign sent to the airlines full list. eDataSource accumulates aggregated information on consumers interaction with email from commercial senders through a panel of over 800,000 consumers in addition to their email and social media listening platforms
**Air Transit World: World Airline Report (annual), July 2011.





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