“Email is more powerful and relevant than ever – especially for retail.”
Thanks to advanced automation and personalization technologies, email is more efficient today than ever before. Especially for retailers, it offers a direct line to customers that is invaluable in the digital deluge. In this interview, Daniel Hikel, General Manager DACH at Optimizely, explains how retailers benefit from email marketing strategies and how the use of artificial intelligence (AI) is transforming email marketing.
Email is one of the most efficient marketing channels for retail. Why is that?
Daniel Hikel: Email is more powerful and relevant than ever – especially for retail. Retail and e-commerce continue to face significant margin and budget pressures. In these times, cost- efficient marketing strategies are essential. Email marketing offers the highest ROI, averaging $42 for every dollar spent. Through direct and personalized communication, email is particularly effective at reaching existing customers and turning them into loyal ones. The costs for customer retention are significantly lower than for acquiring new customers, which further underlines the cost-effectiveness of this channel. Important KPIs such as open and click rates are easy to collect, allowing retailers to measure the success of their campaigns accurately and adjust them quickly. In e-commerce, it’s crucial to respond swiftly to consumer behavior and market changes. Effective tracking is essential for this and provides a significant competitive advantage.
Keyword Tracking: How important is a good database for email marketing?
Hikel: Data is the backbone of effective email marketing strategies. This is why retailers, in particular, benefit from targeted email marketing campaigns, especially in times when third-party cookies are becoming obsolete. E-commerce possesses valuable zero- and first-party data, which allows for highly personalized email campaigns. Retailers can tailor content, offers, and product recommendations to the individual preferences and purchasing behavior of their customers. Additionally, the data enables high-quality segmentation, allowing retailers to precisely cluster their customer base and thus increase the relevance and effectiveness of their campaigns. Surveys show that 84 percent of brand companies use basic segmentation in their email marketing.
How has the use of automation and AI in email marketing changed?
Hikel: Both approaches have fundamentally changed email marketing. The development has been rapid: in the past, automation was primarily used to simplify repetitive tasks like sending mass emails. Today, it enables much more dynamic interaction with customers in real time. This means we can respond immediately to customer actions, such as offering personalized deals shortly after a customer visits a specific page or adds a product to their cart. AI amplifies this development by creating context-aware and highly personalized experiences. These are no longer optional but are expected by consumers: 71 percent of consumers today expect personalized marketing, as McKinsey data shows. Furthermore, 76 percent are frustrated when marketing is not personalized. Particularly interesting in this context: according to Statista, 78 percent of marketers rely on personalized emails.
“Email is established in the consumer goods industry”
How advanced is the retail sector in implementing intelligent email marketing strategies?
Hikel: This cannot be generalized and is highly industry-dependent. In the consumer goods sector, especially in areas like fashion & beauty and home & living, email marketing is well- established. Many retailers are already using automated campaigns such as transactional emails, welcome emails, or cart abandonment emails. However, there is still room for improvement. The biggest challenge remains data collection, data quality, and the use of this data for relevant communication. The German Dialog Marketing Association recently highlighted that while 78 percent of the companies surveyed collect standard information such as names and salutations, only 20 percent ask about product and topic preferences.
Customers expect a seamless shopping and user experience across all channels. What role does email marketing play in omnichannel marketing to create a cohesive user experience?
Hikel: Today, brands and retailers must be present wherever their target audience is active. Email is a central component of any omnichannel marketing strategy. It is most successful when it is intelligently integrated with other marketing channels and systems. This means that campaigns can be extended beyond email to social media, websites, mobile apps, and even physical locations. This approach strengthens customer loyalty and increases customer value: omnichannel campaigns achieve 90 percent higher customer retention than single-channel campaigns and increase the lifetime value of customers by an average of 30 percent.
How will email marketing develop over the next 5 years – and what role will Optimizely play in this?
Hikel: Forecasting is difficult, as the cycles of technological innovation in our industry are becoming increasingly shorter. However, it is clear that email marketing will become even more responsive, precise, and efficient through generative AI. Real-time personalization and automated responses are already available in many advanced email marketing platforms today. However, current systems are often still limited in their ability to fully analyze complex behavioral data in real-time and generate highly personalized content from it. Future developments in this area will aim to further refine and improve these systems. Therefore, I foresee an even stronger integration of real-time data analysis and personalized content, making email marketing even more effective. With Optimizely, we will support these developments and offer solutions that are not only reactive but also proactive in meeting customer needs.
Don’t miss the chance to meet Daniel Hikel and the Optimizely team in person at DMEXCO 2024 on September 18th and 19th! Discover the latest in email marketing and more—visit us at Hall 6, Stand C030. We look forward to connecting with you!
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