The 3 objectives of an Email Marketing strategy for the Retail sector

In Italy, Retail is a sector experiencing continuous growth despite the fact that boom of e- commerce is subjecting it to a process of radical transformation that appears undoubtedly irreversible but whose actual outcome is difficult to predict. In 2017 in our country, Retail was worth 920 billion Euros a year with a network of 750 thousand points of sale which is expected to grow by 2,000 units in 2018, creating 20,000 jobs.

However, this trend must take into account the fact that in the first quarter of 2017 alone Italian consumers who made at least one online purchase grew from 18.7 to 20.9 million. Even though in America this phenomenon is so intense that it has generated expressions like Retail Apocalypse or Mall Zombie Apocalypse, here the picture is markedly different: in 9 out of 10 cases the Italian consumer gathers information online and then still prefers to make purchases as the point of sale,
so much so that now 80% of retailers have started digital marketing strategies based on email interactions as the primary foundation for building their relationship with the customer.

But to get the most out of an email Marketing campaign in terms of ROI, it is not enough to simply equip oneself with technological tools and to invest the budget. An Email Marketing campaign must start from a strategy which has clear objectives at each step of the process, knows how to connect them, and, in the end, measure their effectiveness.

Thus what can a retailer reasonably expect from an Email Marketing strategy: Essentially 3 objectives: Engagement, Conversion, Retention, namely the 3 macro-levels of the funnel.

Engagement is the involvement of the client or prospect, i.e. the construction of a strong link between the brand and the individual. Engagement is simultaneously the prerequisite of conversion and the unit of measurement of communication effectiveness. The higher the level of customer or prospect involvement in terms of CTR (the rate of single clickers on the number of emails delivered, while excluding those which get returned) and/or CTOR (the ration between total clicks and e-mails actually opened), the greater the chances of conversion: among the axioms of Digital Marketing is the direct relationship between Engagement and Conversion.

Conversion is the central level of the funnel, the moment in which the recipient of the communication, client, or prospect, performs the action that represents the goal of the marketing campaign. However, being satisfied with a one-off conversion would be a macroscopic mistake: according to some research, attracting a new customer costs 5 times more than maintaining an existing one and this is where the third objective of an Email Marketing strategy comes into play: retention, namely the transformation of occasional customers into loyal customers.

Net of the costs 5-times lower, fostering customer loyalty generates a virtuous circle in terms of revenues and customer conversion: according to a study by the Harvard Business School, increasing customer retention rates by 5% increases revenues by at least 25% (and in some cases up to 95%). This also happens through customer conversion, word of mouth generated by satisfied or enthusiastic customers who recommend the brand to their circle of acquaintances and through social networks.


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