TECHNOLOGY

Study: Marketers still rely heavily on email promotions to drive revenue

BY Deena M. Amato-McCoy

Email remains the go-to strategy for retailers to grab their piece of the digital pie — yet efforts don’t always meet their shoppers’ needs.

Three-fourths (76%) of marketers said they rely heavily on email promotions to drive revenue, and one-third said more than half of all emails sent include a promotion or discount, according to a new survey from Coherent Path.

Despite sending multiple emails to customers each week, 65% feel pressure to send even more emails to boost revenue and drive awareness, In fact, 57% of marketers reported sending three or more emails a week, while 11% of that group send five or more each week.

“Email continues to be a successful driver of revenue, so it’s only natural that marketers get addicted to the ROI and feel pressure to send more,” said James Glover, founder and CEO of Coherent Path.

However, companies driven by merchant-centric tactics often leave the customer’s wants and needs as an afterthought. Many email marketers (85%) are relying too heavily on what worked last year when planning email marketing calendars for the next 12 months, and a majority of retailers rely on major events and holidays (87%) to drive their efforts.

Only half (50%) of marketers are using data from an individual’s past email behavior to decide what email messages they will receive each week, the study reported.

“As retailers start to move toward a data-driven strategy, they should consider one that not only individualizes communications based on the evolving tastes and interests of their customer base, but also informs them on how to expose more of their product catalog to relevant audiences within their list,” added Glover. “This gets retailers away from relying solely on promotions and breaks the consumer of the growing discount mindset.”

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FINANCE

Report: Hhgregg plans to file for bankruptcy as soon as next month

BY CSA STAFF

A week after bringing in advisers to determine how to return the chain to profitability, Hhgregg is preparing to file Chapter 11.

The 61-year-old appliances electronics retailer has been grappling with sinking sales for the past two years, and weak holiday sales have pushed the retailer closer to the edge, according to Bloomberg.

In the report, anonymous sources said the filing could come as early as next month, but one source said that Hhgregg is still seeking an out-of-court solution that would allow it to stave off Chapter 11.

To read more, click here.

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FINANCE

Analysis: J.C. Penney finally getting its house in order

BY CSA STAFF

Commentary by Neil Saunders, managing director of GlobalData Retail, comments on J.C. Penney’s fourth quarter:

Although JCP ended its fiscal year with a shrink in sales, it can take some comfort from the fact that the decreases are modest and that it managed to outperform its main department store rivals.

Indeed, it is notable that unlike Macy’s and Kohl’s, JCP’s sales numbers come off the back of fairly strong positive growth in the prior year. As such, while we would stop short of calling these results a triumph, they are certainly an achievement of sorts.

Putting sales to one side, the most encouraging number from these results sits on the profit line. Here, JCP has managed to turn around a quarterly net loss of $131 million last year to a profit of $192 million this time around. This transformation has pushed the group $1 million into the black for the full fiscal year – a marked improvement on last year’s $513 million loss, and the first time since 2010 that it has posted a profit for the full fiscal.

In our view, this alone serves as evidence that Marvin Ellison’s turnaround plan is delivering and that JCP is finally getting its house in order.

All that said, this is not the end of the road in terms of the transformation, which we believe has much further to run. This is one of the reasons why JCP will shutter 130-140 stores and two distribution centers over the next few months. The blunt truth is that from a financial standpoint, some of these stores are just not working and future investment in them cannot be justified. It is notable that while the stores earmarked for closure represent about 13-14% of the estate, they generate less than 5% of sales and contribute nothing to net income.

In our view this fairly aggressive action is sensible. At a stroke it will improve JCP’s same-store sales numbers as these outlets are the ones dragging down the company’s performance. It will also allow the group to direct capital and resources to the stores which have the best prospects of delivering profitable growth. Admittedly, there will be a short term impact on the bottom line from lease termination and staff severance costs, which we expect to hit during the first half of the upcoming fiscal year.

With a slimmed down store portfolio, JCP will be able to focus on making its remaining stores more of a destination. This is essential as while progress has been made on categories like home, other departments still require attention. Foremost among these is womenswear, where JCP – like many other players – is still suffering. This is disappointing, especially given the success JCP has had in driving female traffic to its stores from the Sephora concessions. In our view JCP needs to thin out its clothing assortment and make the section easier to shop.

Overall, we are heartened by the steps JCP has taken to turn around the business. This is evident in the energy seen in stores, which is markedly different from other players. However, we are also encouraged that the company is grasping the nettle in terms of rightsizing to align with changing consumer demand.

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