Apparel retailer Bonobos Inc. sends a lot of emails; each day it sends between one and five acquisition and retention messages.
Email, says Josh Goodman, the retailer’s marketing manager, is central to everything Bonobos does. It’s the primary way it keeps customers coming back to buy. It’s how it attracts prospective customers. It’s how it keeps shoppers informed about what the brand is up to. But the retailer’s emails only work—meaning they only drive tangible results like traffic and sales—if consumers open and read them. And that requires the content in those messages to be on target. Otherwise the emails fall on deaf ears or, even worse, lead shoppers to unsubscribe from the retailer’s list.
“We want to provide value,” he says. That means tailoring Bonobos’ email messages to what shoppers are interested in, which it determines based on an algorithm developed by its data science team based on data it gathers about its customers. Among the segments Goodman pinpoint using the algorithm is the group of shoppers deemed “most likely” to buy a particular item.
Bonobos, No. 270 in the Internet Retailer 2015 Top 500 Guide, has produced significant results by divvying up its customers into segments based on such variables as what colors and sizes they’ve bought and looked at, where customers are located and how recently they’ve made a purchase, and then targeting those groups with relevant messages.
For instance, Bonobos ran a campaign in October 2014 in which it sent an email promoting its “Daily Grind Dress Shirts” to two groups: a targeted list of email subscribers the algorithm deemed “most likely” to purchase one of the shirts and a control group of a random segment of the same size. The “most likely” group produced a revenue lift four times greater than the control group.
And as Bonobos’ email marketing program grows increasingly sophisticated and tailored to consumers’ interests and preferences, the retailer keeps boosting its email marketing budget. “As the program becomes more successful, our internal challenge is to grow it,” Goodman says.
Bonobos has plenty of company among retailers in boosting its email marketing budget; U.S. retailers’ digital ad spending jumped 14.4% last year to $10.957 billion —from $9.574 billion in 2013, according to eMarketer Inc. The research firm expects spending to rise 16.8% this year to $12.802 billion. And that growth isn’t likely to slow down; eMarketer expects spending to shoot up 14.9% in 2016 and to reach $20.525 billion by 2019.
Read more about retail-centric digital marketing trends in the upcoming November issue of Internet Retailer magazine. The issue will feature results of Internet Retailer’s first-ever digital marketing survey. Not a subscriber? Click here to sign up for a free subscription.