Which Marketing Channel Generates the Highest ROI for Retailers?

by John and Jake Fell

Q: Which marketing channel generates the highest ROI for retailers?

Jake Fell
Jake Fell

Jake Fell: E-mail generates the greatest return on investment for retailers compared to any marketing channel, according to industry researchers. E-mail may not be a shiny new object, but more than 90% of consumers still check their email at least once per day — and an astounding 77% say e-mail is their preferred channel for receiving permission-based promotional messages.

E-mail is significantly underutilized by independent retailers. This is understandable since elementary e-mail marketing is cheap and many independent retailers have processes for e-mail marketing that haven’t been evaluated or upgraded for years.

Yet, major retailers that compete with you (such as Nordstrom, Trunk Club, and Neiman Marcus) understand e-mail produces more sales than any other channel and invest tremendous resources in their e-mail programs. Independent retailers should stop seeing e-mail as a cheap afterthought and instead view it as the channel that will produce the best ROI relative to any line item in their marketing budget.

You need to up your e-mail game if you’re not taking advantage of its potential:

  • Data and Targeting: Modern e-mail marketing programs will integrate your POS data and send super targeted messages based on customer behavior.
  • Automation: Make money with no ongoing effort by sending automated welcome offers, re-engagement messages, surveys, rewards and more. We just observed a new client generate more revenue in one month of sending birthday e-mails than the entire cost of our e-mail services for the year.
  • Collect e-mail addresses at every customer touch point: Make sure you collect e-mails on your website, at checkout, and on your social media pages. Then, have a welcome e-mail with an offer triggered after people sign up.
  • Deliverability: If your e-mails end up in spam folders, your brand will be positioned alongside e-mails promoting erectile dysfunction tablets and escorts. You need to correct poor deliverability and have your e-mails delivered to your customers’ inbox.
  • Mobile: Make sure your e-mails look great on mobile devices — 50% of e-mails are now opened on phones and tablets.
  • Design: Many independent retailers have extremely high brand standards in regards to their physical presence, yet are content sending amateurish-looking e-mails. E-mail is an area where independent retailers can easily achieve branding and design in line with major retailers.

E-mail produces the greatest ROI for retailers and now is the time to audit your e-mail program and upgrade.