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. (WSM) and Home Depot Inc. (HD) 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 Federationpredicts 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.
At the same time, the number of Black Friday and Cyber Monday shoppers making purchases after clicking through from social networks such as Facebook, Twitter, LinkedIn and YouTube declined by at least 26 percent this year from 2011, even as online sales soared, IBM Digital Analytics Benchmark said last month. So-called social sales contributed less than 0.5 percent of online revenue both days.