E-mail trumps social media as e-commerce booster

E-mail remains such an effective communications tool that a study found it helps generate more sales than social networking sites, but an analyst says both platforms are unique and each serves different functions.

According to a poll by Econsultancy, 36 percent of shoppers were influenced to buy a product online thanks to e-mail marketing messages, while 27 percent said they bought an item offline for the same reason. In contrast, only a small number of consumers turned to social media for opinions on product selection.

UK online retailer oki-ni.com is a huge believer in e-mail marketing. Media manager James Nuttal said:"From our perspective, it [e-mail marketing] allows us to communicate with a huge audience of customers that we know are interested in our brand, at limited cost. People are also comfortable with receiving messages that a commercial edge, whereas other social media channels, the content that is relevant there has much less of a sales focus."

Industry analyst Claus Mortensen, however, likened the study findings to comparing oranges and apples as both marketing tools are unique in their own right.

"An e-mail campaign is usually meant to generate sales directly whereas social media marketing is, or at least should be, more about influencing public sentiment and building loyalty around your brand or product," explained Mortensen who heads the emerging technology research practice group at IDC.

"Also, an e-mail campaign often contains a 'special offer', which may entice recipients to make a quick purchase. Social media, in general, is perhaps not that well suited for that sort of purpose," the analyst said.

Online retailer, 12buy.sg, said in an e-mail interview: "E-mail marketing is useful to profile target customers who may already have a predisposition to purchase a certain item."

This was a view Mortensen also supported. "Social media tends to lend itself better to influencing people who are proactively seeking information about a product they intend to buy," he said.

Loo Pei Fen, spokesperson for Singapore IT retailer Challenger, which is the parent company of 12buy.sg, said: "The thing to remember about online marketing is that you need to engage and interact with your online audience, so simply having a Twitter or Facebook account isn't sufficient.

"You need to be able to respond to tweeted comments such as a customer's delivery issue, or a Facebook comment about needing more information about the size of a T-shirt, for instance," Loo added.

However, Challenger believes a two-way conversation between retailers and Web users is essential to keep up the market buzz.

According to an AC Nielsen survey, Asia-Pacific consumers were the most prolific online shoppers, with 35 percent of them spending up to 11 percent of their monthly expenditure on online purchases, compared with 27 percent worldwide.

Online communities such as Singapore-based cozycot have given online retail a boost in the arm by setting up forums for consumers to share sales codes and product feedback.

Frequent online shopper Selene Ng stocks her wardrobe through online sprees and acknowledges that it is the constant e-mail marketing messages that grab her attention.

"The weekly e-mail alerts from Web sites that I've shopped at are really informative," said the account executive. "Not only do they provide tips on how to assemble the latest look, the occasional [promotional] codes for free shipping and additional discounts also [make purchasing] extremely tempting."

Ng added that favorable exchange rates and tax-free shopping further sweeten the deal.

Social for networking, not shopping
Findings from the Econsultancy survey indicated that while social media might be useful for networking, consumers were not tapping it for online shopping. Only 6 percent of shoppers asked for product recommendations onsite.

However, despite e-mail alerts having the ability to generate sales more effectively, Mortensen cautioned that social media cannot be ignored as it may be a platform to monitor and respond to complaints and bad reviews.

"People with good experiences may help spread the word and thus promote your business," he said. "For those who have had bad experiences, social media can provide a tool for learning about these bad experiences and then addressing the customers in question directly. It may also provide valuable feedback for issues that need to be addressed within your business."

The IDC analyst believes several factors helped create an infliction point for e-commerce. Among them is the increasing number of very proficient Web users, as well as the burgeoning number of sellers both old and new jumping on the bandwagon.

"As more and more people start becoming comfortable with buying goods and services online, it becomes a bit of a self-propelling phenomenon," he said.

Challenger's Loo pointed to e-commerce as an educational tool and also an outlet to market goods not easily available in brick-and-mortar stores. The company's online venture is modeled after U.S. sites and stocks unique eco-friendly products such as bamboo utensils and organic children's clothing.

With Web users getting better-informed, the company's strategy is to cater to this group of savvy shoppers who are willing to pay for quality products, she said.

oki-ni.com's Nuttal believed that as personalization of online shopping experience becomes more advanced, the company is able to better tailor the products, sizes, brands or content that a user’s choice or behaviour has pointed toward, thereby catering to the broader spectrum of high-end shoppers.

"The Apple led movement to touch controlled devices will encourage web designer to make navigation and product more tactile, which resonates with the physical shopping experience that customers are traditionally used to," added Nuttal.