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Personalisation holds the key to the rebirth of email marketing

While apps and social channels have given Brands new ways to engage with Customers, email marketing has continued to play its role too. Now though, a greater focus on relevancy and personalisation is needed to take the channel to the next level, say Miriane Schmidt and Katherine Mainardi.

Over the past decade, advances in digital technology have helped to further bridge the communications divide between Brands and Customers. Consumer packaged goods companies (CPGs) are now just as likely to be engaging potential shoppers via Pinterest and TikTok as they are through traditional channels, if not more so. And as social platforms and apps have continued to proliferate, the prominence of some older digital channels has dwindled in turn – email amongst them.

Email marketing is one of the oldest digital channels that remains in use today. In fact, it goes back further than most people would probably expect; the first campaign issued via email was sent in 1978[1], when marketing executive Gary Thuerk managed to generate $13m in sales for the Digital Equipment Corporation by targeting 400 devices running on Arpanet (essentially a precursor to the internet).

The longevity of email marketing, along with its – often justified – reputation as a tool that can be abused by spammers has led some to question the relevance of the channel in today’s social-centric world. There’s an undoubted temptation to see email as a relic of the past, a kind of holdout for those who have yet to embrace some of the newer and more exciting digital opportunities that recent years have presented.

The truth is quite different.

Over the past 15 years, email “open” rates (the percentage of recipients who view a mail) have remained steady. While there was a clear spike towards the beginning of the previous decade, companies using email marketing today can expect a broadly similar open rate today as they would have seen in 2006[2], back when many were still getting to grips with it. It’s not just older shoppers opening those mails, either – three quarters of millennials say that email is their preferred way to receive communications from businesses[3].

It might not be the next big thing anymore, but email marketing isn’t going away any time soon either. And that’s a good thing too, particularly for CPGs.

Experience or monetisation: why not both?

Consumer goods Brands are exceptional in so many ways when it comes to marketing, but the collection and analysis of CRM data is rarely one of them. They might spend some $800m on advertising every year, but the average large Brand’s Customer database is around 90% smaller than that held by their Retailer counterparts[4]. While direct-to-consumer offerings will continue to tip that balance, the short-term problem remains: manufacturers rarely have the same level of insight into their Customers as supermarkets do.

This, of course, is one of the key problems that Retail Media seeks to address. By giving Brands the opportunity to advertise to shoppers directly at the point of purchase, Retailers are essentially helping them to circumnavigate their data shortfalls.

dunnhumby’s own approach to Retail Media goes one step further still, using sophisticated Customer Data Science to ensure that – as far as is possible, and avoiding the “creepiness effect” – ads are individually targeted, highly relevant, and additive to the consumer experience. That’s important for the Brand, since it helps them reach more of the people who have a propensity to buy their products, but it’s vital for Retailers – who will want to ensure that they aren’t frustrating or annoying Customers by monetising their media inventory with advertisers.

With many grocery Retailers offering CPGs ad space in email communications such as newsletters, I believe that there is now a clear opportunity to carry this kind of Customer-centric thinking across to any CRM-driven Retail Media activity. While data-driven personalisation has already been applied to web-based applications like product recommendations and special offers, that same science can also be used to ensure that Brand advertisers are matched with relevant Customers across email and other CRM-related initiatives too.

What is needed in order for this to happen is for Brands and Retailers to enter into a data-driven partnership, one that is ultimately in service to the shopper. Retailers sit on goldmines of loyalty and purchasing data. By applying the right science to that information, they’ll generate the insights needed to tell CPGs not just which Customers are likely to be receptive to communications from them, but which products to promote and when, too.

By doing this, Retailers can create an environment in which their email communications to Customers are a constructive and profitable part of their media toolkit. Customers benefit because they get better and more relevant communications. Brands benefit because they get to invest their ad spend in a proven channel that offers one-to-one communications with receptive shoppers. And Retailers benefit by being able to monetise email without the fear of hindering the Customer experience while potentially increasing sales.

Like any other digital channel, email marketing is what we choose to make it. And if nothing changed, email would still serve its purpose as an effective – if unsophisticated – marketing tool. I think there’s a brighter future ahead for it though, one in which it can be employed as a genuinely clever and highly contextual communications channel.

The rebirth of email is here. Are you ready to participate?

Miriane Schmidt is Director of Consulting for CRM, Loyalty, and Media at dunnhumby Latin America
Katherine Mainardi is Global Media and Customer Engagement Consulting Manager at dunnhumby

 

[1] When Did Email Marketing Start? – Campaign Monitor
[2] The Science Behind Email Open Rates – Super Office, 10th May 2021
[3] The Ultimate List of Email Marketing Stats for 2020 – Hubspot, 22nd July 2020
[4] Maximizing the Value of Data for CPG Marketers – Boston Consulting Group, 27th August 2020

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