2016 Luxury Retail

Email Marketing Benchmarks

HOW TO BEAT THE BENCHMARKS
STRATEGY GUIDE
TABLE OF CONTENTS
LUXURY EMAIL MARKETING BENCHMARKS 2016............................................ 3

MARKETING EMAILS...................................................................................................... 5

WELCOME SERIES........................................................................................................... 7

SHOPPING CART ABANDONMENT.......................................................................... 10

POST PURCHASE............................................................................................................. 12

FINAL NOTE....................................................................................................................... 15
 2016 LUXURY EMAIL
MARKETING
BENCHMARKS
Luxury retailers were late eCommerce adopters and late to adopt email as ECOMMERCE
a key digital marketing strategy. In 2015, while McKinsey & Co. reported that PERCENTAGE OF
luxury brands were finally starting to embrace ecommerce and online sales OVERALL SALES:

6%
for luxury goods had grown to 6%, eCommerce was accounting for more
than 10% of retail sales according to the U.S. Commerce Department.

A frequently cited report from Italy’s ContactLab, Digital Frontier 2016:

Digital Luxury is turning Mainstream, looked at the email practices of luxury Luxury Goods
brands and reports them to be relatively primitive. Despite email’s proven

10%
cost effectiveness and ability to drive site traffic, the study found that only
30% of luxury brands are using it to its full potential.

The good news is that there is potential – and plenty of it – for luxury
retailers to continue to evolve their email marketing efforts. At Listrak, we
US Retail
have a growing number of luxury retailers who are reaping the benefits of
strategically created email marketing programs.

And although it may be a while until luxury retailers close the

email marketing gap between themselves and retailers in general,
it is important to realize that luxury will always be unique, and At Listrak, we have
a growing number
benchmarking against other luxury retailers is essential when
evaluating email marketing success in this sector.

Listrak compiled the 2015 email marketing metrics of nearly 30 of luxury retailers
luxury retail clients, spanning apparel, home goods and jewelry
who are reaping
verticals. In the following guide, we compare our findings for
a few key email campaigns to our global (all retail clients) the benefits of
strategically created
benchmarks. In addition, we explore why luxury emails typically
have higher open and revenue per email rates but consistently
lower click to open and conversion rates, and share tips luxury
email marketing
retailers can leverage to optimize email campaigns.
programs

Luxury Email Marketing Benchmarks | 3

 Luxury vs. Overall Retail
Email Benchmarks
 Luxury
 Global
Marketing/
Other Welcome Shopping Cart Post Purchase
Campaigns Series Abandonment Email

39.3% 38.7%

OPEN 29.7% 28.8%

24.0%
RATE 22.5%

13.6% 13.0%

42.7
35.4% 36.2%
CLICK TO
OPEN RATE 19.4%
21.5% 21.2%
17.6%

2.9%

19.4% 20.0%

CONVERSION
RATE 11.0% 11.8%
8.4% 9.1%

4.2%
2.5%

$5.53 $0.84
$1.74 $0.73
REVENUE PER $3.43
EMAIL SENT $1.07

$0.13
$0.06

4 | Luxury vs. Overall Retail Email Benchmarks

 MARKETING EMAILS
Not surprisingly, of the four types of emails we studied, marketing or broadcast emails from
luxury retailers, like retail emails in general, had significantly lower metrics across the board than
the three triggered campaigns. But there were some notable findings:

While the open rate for marketing emails is slightly higher than those from retailers in general (.6%
higher), the click to open rate is significantly lower – just 2.9% vs. 19.4% for retailers on average.

According to Listrak Solution Consultant Julie Wahl, based on what we see with our own clients
and other luxury retailers, there could be several explanations:

• Less aggressive acquisition tactics – Because

luxury retailers tend to use subtler tactics than
the popular bold modal and even full screen
lightbox, for example, their subscribers have to
make a bigger effort to sign up, and are therefore
more likely to open emails.

• Newer subscriber lists – Being late adopters to

email means luxury retailers’ lists comprise newer
subscribers, which means fewer disengaged
subscribers and lapsed buyers compared to
retailers in general.

• Design for design’s sake – Many luxury retails

prioritize the beautiful appearance of emails over
optimization for email activity, such as clicks to
open.

• More aspirational shoppers - Compared to

subscribers in general, luxury retail subscribers
are more interested in seeing beautiful branding
and latest offerings, however, many are not truly
in the market to purchase and therefore do not
click through to retailers’ websites. This is, in fact,
a trend we see across all the luxury campaigns
studied.

• Less promotion – Luxury retailers also tend to feature fewer promotions, giving subscribers
less incentive to shop if they are not prepared to spend.

Marketing Emails | 5
 According to L2’s 2015 Digital IQ Index
for Fashion, which takes a detailed
look at the digital marketing acumen
of a large number of luxury brands, the
majority of emails - 81% - are driven by
editorial content.

Perhaps also because of the high number

of aspirational subscribers on luxury
retailers’ lists, even of those who do click
through to the website from a marketing
email, a significantly lower number
convert – in fact, only 60% as many.

The good news for luxury retailers,

however, is that because of higher AOVs,
their revenue per email sent is more than
double that of retailers in general. And
luxury retailers may be learning the value
of staying in front of all subscribers, even
if they are not customers – yet. L2’s 2015
Digital IQ Index for Fashion reports that
last year the average email send rate for
fashion retailers increased 65% vs. 2014
from 1.7 per week to 2.8.

BEAT THE LUXURY MARKETING EMAIL BENCHMARKS

»» A/B split test – Test everything from subject line, send day and time, hero image and
offer to reveal what’s most effective with your luxury subscribers.

»» Make marketing emails “shoppable” – Consider making messages catalog-like, with

an array of categorized merchandise like New Arrivals, Stylist Picks and Top Sellers.

»» Personalize – Match the luxury in-store experience by using as many relevant details
as possible to personalize product recommendations, including browse and shopping
cart abandonment data and purchase history.

»» Hold back when appropriate - Suppress subscribers from marketing emails when they
are in more targeted, timely triggered conversations to ensure they are receiving the
most relevant messages and not becoming overwhelmed by too many emails.

6 | Marketing Emails
 WELCOME SERIES
According to our research, luxury subscribers are especially
interested in welcome series emails, which are deployed when a
shopper subscribes to a retailer’s email list from any number of Nearly four out
touchpoints, including onsite modal, miniform, account creation,
social media, sweepstakes and more. In fact, nearly four out of of 10 new luxury
10 (39.27%) new luxury brand subscribers open Welcome Series
brand subscribers
emails, the highest of all emails studied.

Like retail emails in general, welcome emails from luxury brands

open welcome
may be especially highly anticipated when they deliver a series emails
promotional code for an incentive offered at sign-up.

Welsome Series | 7
 However, luxury retailers tend not to incentivize at all or use lower-value incentives like free shipping
to boost subscriber sign-ups, yet new subscribers are still highly engaged and eagerly open welcome
emails to learn more about the brand and to be immersed in the luxury brand experience.

8 | Welcome Series
On the other hand, the click to open rate for welcome series emails from luxury brands is notably
lower than that of retailers in general – about a fifth (21.5%) of subscribers click through to luxury
websites versus more than a third (35.4%) of retail subscribers in general. This, again, could be
attributed to the relatively high number of aspirational subscribers on luxury brands’ lists.

The conversion rate for luxury welcome emails is not as low relative to that of retailers in general
(8.4% vs. 11%), which is not surprising, as the conversion rate for luxury emails is slightly lower
across the board.

Revenue per email sent for welcome emails from luxury retailers is a healthy 62.6% higher than
that of retailers in general.

BEAT THE LUXURY WELCOME EMAIL BENCHMARKS

»» Respond quickly – Send the first welcome email immediately upon subscription,
while the shopper is still browsing your site.

»» Don’t be afraid to incentivize at the right time – It is extremely important for luxury
retailers to continue to attract new customers who will become brand loyalists, so
incentivizing to get the important first sale that immerses a subscriber in your unique
brand experience is recommended.

»» Extend the welcome – Send a series rather than a single welcome email. Leverage
high engagement levels to gather more information, share your brand differentiators
and present top selling or gateway (typical first purchase) products.

»» Personalize – Consider all the information you have - including name, recently browsed
merchandise, local store location and more - to personalize welcome messages.

Welcome Series | 9
 SHOPPING CART
ABANDONMENT
Shopping cart abandonment emails are a highly effective way to recoup potentially lost revenue,
and the revenue at stake for luxury retailers is higher than for retailers in general. According to
L2’s 2015 Fashion Digital IQ Index, nearly 40% of fashion retailers send at least one shopping cart
abandonment email, and 31% send multiple emails in the series.

The metrics for shopping cart abandonment emails of luxury retailers compared to average
retailers closely mirrors that of welcome series emails. In our study, while luxury retailers’ shopping
cart abandonment emails have a substantially higher open rate than general retailers’ (38.7% vs.
22.5%), their click to open rate is less than half (21.2% vs. 42.7%).

Wahl explains, “This could be due to the fact that,

unlike most average retailers, luxury retailers tend not
Luxury retailers tend to incentivize abandoners to complete the purchase,

to not incentivize
and in fact, many send fewer emails to lure them back
to the website to take another look. Also, aspirational
abandoners to complete subscribers may abandon items in the cart specifically to
see if they receive a discount that would make the price
the purchase more realistic for them.”

10 | Shopping Cart Abandonment

Those luxury abandoners who do click on a shopping cart abandonment email, however, are
almost equally as apt to convert as those of the average retailer. And again, one could assume
because of the relative AOV of the items, the revenue per email sent for luxury shopping cart
abandonment emails is notably higher than that of average retailers ($5.53 vs. $3.43).

BEAT THE LUXURY SHOPPING CART ABANDONMENT

EMAIL BENCHMARKS
»» Optimize with social proof – Feature ratings and reviews of abandoned merchandise
in messages to help persuade the shopper to complete the purchase.

»» Pay attention to creative – Rather than using a basic template with product image
and price, share valuable information, such as low inventory levels.

»» Send a series – Three-message shopping cart abandonment series are most common,
however, it’s safe to send a fourth or more if the previous message has a double-digit
conversion rate.

»» Test message timing – Consider extending the timeframe of the series to account
for longer purchase consideration.

»» Consider recommendations – Test to see if personalized product recommendations

increase conversions, items ordered and AOV.

Shopping Cart Abandonment | 11

 POST PURCHASE
For luxury subscribers who do purchase, the average open rate of post purchase messages – like
other email campaigns studied - is higher than that of average retail campaigns. Also, like other
campaigns, the click to open rate is lower than that of average retailers – in fact, by the largest
margin of all three triggered campaigns. In fact, the click to open rate for luxury retailers’ post
purchase emails is less than half of that of retailers in general.

“While this may be due to the fact that some luxury retailers use post purchase emails to thank
customers but not to incent them to purchase again,” Wahl comments, “many luxury retailers do
offer an incentive for the next purchase. The difference then may be because the luxury retailers
studied tend to send fewer post purchase emails than retailers overall.”

She continues, “The relatively lower click to open rate may also be
attributed to the fact that the typical timing of repeat purchases
of luxury items may differ from that of repeat purchases from The optimal post
retailers overall, and the optimal post purchase email cadence
may be more challenging for luxury retailers to nail down.” purchase email
Of those who do click through to the luxury retailer’s website cadence may be
from a post purchase email, the conversion rate is slightly lower
than that of retailers overall, much like for welcome series emails.
more challenging
It is interesting to note that post purchase emails are the only
for luxury retailers
emails that have a lower revenue per email sent than the same to nail down
campaigns for retailers overall. This is likely due to the fact that
luxury retailers are sending fewer post purchase emails, they
are only getting opened at a slightly higher rate than retailers
overall, and click to opens are significantly lower.

12 | Post Purchase
Post Purchase | 13
 BEAT THE LUXURY POST PURCHASE EMAIL
BENCHMARKS
»» Send more than just a thank you – Post purchase emails allow retailers to keep the
conversation going with customers by introducing related products, requesting feedback
on recently purchased items, providing care instructions, and more.

»» Split test timing – It is imperative that luxury retailers get to know the purchase cadence
of their customers and send them right post purchase content at the right time.

»» Recommend what to purchase next – Feature personalized recommended products

based on the recent transaction in all post purchase emails.

»» Keep other emails coming – It is typically not necessary to suppress subscribers in

post purchase conversations from general marketing emails, but do monitor results.

14 | Post Purchase
 FINAL NOTE
It is important to point out that personalization is a critical area where luxury retailers in general
are lacking. According to the L2 2015 Digital IQ Index for Fashion, fashion brands continue to
underutilize customer data when crafting messages. L2 also reports that while 59% of retailers in
its study capture personal information at account signup, only 26% use it to personalize emails.

The significance of this missed opportunity for luxury retailers should not be underestimated. As
the L2 study concludes, “As site traffic becomes increasingly expensive, successful brands turn to
personalized email marketing to drive top-line growth and conversion.”

Wahl concludes, “Much of the reason that luxury retailers have been slow to adopt email marketing
is because they believe they will disappoint customers by not being able to offer the same high
level of personalization they receive from luxury store associates. By strategically using data to
personalize their emails, however, luxury retailers can overcome this challenge and actually reach
current and future customers in the way that they now prefer to shop.”

Final Note | 15
 Listrak’s retail-specific solutions help you
create personalized, seamless experiences
across all customer touchpoints from a single,
integrated digital marketing platform.