Originally Published: Internet Retailer August 2019
David Baker
Email marketing is going on 20 years as a viable direct marketing channel. Although it has proved itself to be a recession-proof channel, how we do email hasn't changed dramatically over those 20 years. Change is coming, though. Are you ready to change with it?
The consumer inbox still has limited interactivity and sporadic constraints regulated by the major internet service providers and cable companies. Although almost every brand, large and small, uses email, the best-known brands will win the advertising game.
Industry growth hasn’t impressed analysts, with its average compound annual growth rate of just under 14 percent. The estimated size of the email market is about the same as the tip you left at lunch today compared with what's spent on search, mobile and social advertising.
Furthermore, the traditional email service provider (ESP) hasn’t innovated to match the pace of today's on-the-go consumers. While the big ESPs get bigger through acquisitions and consolidations, the cost and time to bring innovative technology to market lags. Or, it creates a feeding frenzy with new technologies filling gaps.
This is where we are today with marketing automation and email marketing. A few important trends are reshaping the industry and presenting opportunities for retailers. Whether the retail organization is in the process of a transformation, or just trying to keep up with the Jones's, innovation might not look like what most CMOs expect.
1. Mobile Influence Shatters the Norms of In-Home, Out-of-Home Experiences
The smartphone is the hub of consumers’ digital lives today. Consumer behaviors are shifting dramatically as younger generations spend more time on their devices and use them in more and different ways beyond calling someone — e.g., ordering food, getting a ride, tracking down a home stay.
The days of expecting that someone sits at a computer and checks email at specific times of the day is gone. Instead, we're marketing to device-shifting, place-shifting and time-shifting consumers.
After more than 10 years of mobile email, the patterns are clear. Mobile email viewership is high, but the correlation to device size and location have a huge impact on consumer heuristics. We know consumers don’t convert or shop as long on their mobile devices as they do when they're in "lean back" mode on a tablet or PC/laptop.
However, timing messages to this lean forward is a challenge because it's sporadic at best. It also increases inbox noise when all marketers assume there's only one window when consumers will pay the greatest attention to promotional email.
2. Micro-Targeting and Experience Management Accelerated by CDPs and Other Point Solutions
With all the inbox noise, more brands are looking for ways to provide utilitarian value in email beyond "shop/buy/redeem." Micro-targeting allows retailers to detect patterns indicating when consumers are in learning mode, shopping mode, buying mode or entertainment mode.
Retailers must think differently about the traditional marketing funnel and build journeys that look more like interaction management than broadcast mail-merge email programs.
Customer data platforms (CDPs) have taken what ESPs have done with data collection and built the ability to extend this data set using other forms of behavioral data to learn about what consumers might do, their device bias and other behavior. CDP vendors are building orchestration tools to help infuse this data into cross-channel dialogs. While this is nothing new in the marketing automation space, machine learning and connecting data from all channels are affordable now and don't require long build cycles to get to the data.
Is this technology a gap-filler while retailers work internally on building a unified retail vision and data environment? Or, is it a way to kick that can down the road? I think it’s a bit of both.
Simply put, CDPs and other tangential vendors that solve data, help with data transparency and find correlations in your data that will let you see around the corner have the lowest entry barrier that we’ve ever seen.
3. Email is Utilitarian, Not Just Promotional
Email has four functional value exchanges: notification value;promotional value;informational value; and social value. The root of this stems from the consumer's need to learn, act, inform, entertain and share. Half of all interactions with email happen on small devices when consumers are on the go. However, the typical retailer is still largely a promotion company. Email is about getting content in front of customers as often as possible, with conversion on reach as the proxy for success.
Retailers will hit an inflection point soon, when the promotional windows that we’ve learned to love and cherish will grow less effective. All email trends have showed decaying performance in broadcast, advertising-oriented email promotions. No matter how relevant your brand and messaging is, all the noise in the inbox makes it hard to compete in those promotional windows. Pattern-based marketing will shift from "batch and blast" to a more programmatic exchange of information that focuses on root needs and mixes value with promotion and branding.
Every email, regardless of the value, has some brand value in building recognition, trust and enthusiasm for the brand. It simply has to change or consumers will tune out.
How You Stand Out From Your Inbox Competition is Changing
It's no longer possible to think about the physical and digital environments as two different worlds. Transformative email programs will take into account what setting you're in and your attitudes while you're in that setting. Then, they'll look for interactions that provide sustainable value exchanges.