Many luxury brands are failing to segment and target customers strategically in their email marketing, but Cartier and Burberry are leading the way, according to new research.
The Dawn of Luxury CRM: Email do’s and don’ts study which was produced by customer engagement specialists ContactLab in conjunction with Exane BNP Paribas, revealed how luxury brands can better engage with their customers through email.
Cartier and Burberry overall lead in the Email Competitive Map with the majority of the luxury brands not recognising the potential for effective email marketing. The overall Map exploitation was just above 30%, a bit higher for Email Proficiency (34%) than the Email Strategy (28%) (Figure 1).
ContactLab point out that overall there is good performance on email localization (key languages) and structure (composition, visualization). However there is still little integration of emails with E-Commerce and Cross-Channel services, and the contact plan being quite unbalanced (too commercial) and insufficiently segmented. Emails are an integral part in any marketing strategy and should be carefully designed and distributed in order to cater to the needs of the consumer. Digital does not only include email marketing but this is one aspect of the whole ecosystem and must be considered, since the impact of digital engagement can translate into a 40 per cent increase in revenue for fashion and luxury brands.
The ContactLab and Exane BNP Paribas research focused on 30 brands, looking at the US market for Account Registered (non clients) and Email Subscribers (non clients) between July-December 2015. There was also specific focus on the Italian market regarding differentiation in contact flow among Clients vs. Account Registered (non clients) vs. Newsletter Subscribers (non clients). The Email Competitive Map analysis was based on 8 Categories, 14 Criteria, 62 Parameters.
The study revealed how brands are designing and distributing their content according to different customers. Customer expectations have evolved and they expect content to be bespoke and tailored to their own needs. Dolce & Gabbana are in the lead followed by Armani in addressing customers according to gender/ title. Having said this, the full segmentation potential goes widely untapped with very few brands asking for ZIP code (offering geo segmentation potential) and content preferences such as beauty, fashion, jewellery etc.
Further analysis revealed how 20 brands did not differentiate content by gender or between clients and newsletter receivers like Hermes and Brunello Cucinelli.
Marco Pozzi, author of the research comments: “Brands need to be more strategic in their use of email marketing and recognise that consumers are more demanding than ever. If content does not cater to their needs, their impression of a brand will be lowered and will eventually unsubscribe. Email marketing offers the opportunities for brands to receive large amount of traffic through portable devices like smartphones and tablets. With the modern customers having an overload of content and often bombarded with emails, brands need to ensure the emails they distribute are relevant and thus capturing the attention of the consumer.”
Top designers need to leverage the different services they offer and integrate Cross Channel communication through email marketing. In particular Cartier lead in Cross-Channel services, Cartier and Ferragamo tie for the lead in Actual Segmentation of contact flow, and Hermès with the most balanced contact flow mix (branding / commercial / store-focused). Overall there is very poor exploitation in email marketing apart from a “Link to Store Locator” option. Only Cartier included a “Book an Appointment” tab and only Burberry included “Collect in Store”
Marco Pozzi continues: “The fact is that luxury brands have a lot more work to do in engaging their customer through email. Achieving customer segmentation will always be a challenge but there remains a lot of room for luxury brands to differentiate in their emails and create more personalised campaigns. Simply sending generic content and treating all customers as one does not build a relationship with customers. Customer shopping habits have changed and they expect an integration of different channels as part of the Omni channel experience. ”
Read the report here (registration required)