Report: E-Mail Taking Hold as E-Commerce Tool

A survey released this week by Forrester Research, Inc. reports that e-tailers are now using electronic mail as a major means of generating repeat business from customers.

According to Forrester senior analyst Jim Nail, e-mail is effectively changing the way marketers work. “Marketers are hunters — following the tracks of consumers and scattering promotional bait to lure elusive dollars out of hiding places,” he said. “E-mail turns marketers into herders: Once they trap consumers, they must learn to tame and cultivate them as ongoing sources of nourishment.”

E-Mail Spawns New Direct E-Mail Industry

Forrester predicts that e-mail volumes will soon surpass the amount of junk mail delivered by the U.S. Post Office. “By 2003, the number of marketing e-mails will equal the volume of direct mail forwarded by the U.S. Postal Service, and by 2004 the average household will receive nine pieces of marketing e-mail per day,” Nail said.

Forrester also found that the new world of direct e-mail is creating a new industry, as successful e-tailers leave their campaigns to third-party experts. The e-mail service bureaus solicit consumers to opt-in to receive e-mail solicitations and then typically sell their legitimate e-mail lists for 10 to 25 cents (US$) per e-mail solicitation.

The Forrester report shows that companies that use these newly-emerging e-mail service bureaus have a success rate four times higher than that of counterparts who handle e-mail campaigns in-house. The use of opt-in names also eliminates problems associated with “spamming,” or the act of sending out unsolicited e-mail to Internet users.

Forrester expects that in 2004, marketers will pay $4.8 billion to send out over 200 billion e-mail solicitations — with 66 percent designed to generate incremental business from existing customers and 33 percent designed to generate new customers.

Direct E-Mail Has Tricky Aspects

The Forrester report indicates that e-mail campaigns need three components in order to succeed:

• Marketing campaigns need to begin a dialogue with the customer and not simply broadcast ads.
• Marketers cannot just push products — they have to offer customers value in the form of ease of use and service.
• Campaigns can no longer use the traditional measures of timing, frequency, and monetary value of purchase to measure the depth and breadth of their relationships. Instead, they must judge the relationship by the amount of information shared with customers.

Valuable for Generating New Customers

While the major use of e-mail by e-tailers will be to keep customers buying, Forrester also predicts that soliciting new customers by e-mail will become a $1.6 billion industry in its own right by 2004.

Save a Tree

E-mail is also expected to save trees. According to a report by the Center for Energy and Climate Solutions, the Internet could save 2.7 million tons of paper each year, at least part of that a result of using e-mail instead of direct mail.

Additionally, The Native Forest Network reports that 4.5 million tons of junk mail are produced each year, requiring that 100 million trees be ground up for the paper.