Interview with Daniel Hikel "Retail and email marketing - the status quo"

Thanks to advanced automation and personalization technologies, email is now more efficient than ever. For retailers in particular, it offers a direct line to the customer, which is invaluable in the digital flood. In this interview, Daniel Hikel, General Manager DACH at Optimizely, explains how retailers benefit from email marketing strategies - and how the use of artificial intelligence (AI) is changing email marketing.

Email is one of the most efficient marketing channelsfor retailers.Why is that the case?

Daniel Hikel: Email is more powerful and relevant than ever - especially for retailers. Retail and e-commerce are still under high margin and budget pressure. In these times, cost-efficient marketing strategies are in demand. Email marketing offers the highest ROI with an average of 42 US dollars. Direct and personalized communication makes it particularly effective for reaching existing customers and turning them into regular customers. The costs for customer retention are significantly lower than for acquiring new customers, which further underlines the cost-effectiveness of this channel. Important KPIs such as open and click rates are easy to collect, allowing retailers to measure the success of their campaigns accurately and adjust them quickly. In e-commerce in particular, it is necessary to react quickly to consumer behavior and market changes. Appropriate tracking is essential for this and a decisive competitive advantage.

Speaking of tracking: how important is a good database for email marketing?

Hikel: Data is the backbone of effective email marketing strategies. This is why retailers in particular benefit from appropriate email marketing campaigns - especially in times when third-party cookies are becoming obsolete. This is because e-commerce has valuable zero and first-party data that can be used to personalize email campaigns. Retailers can tailor content, offers and product recommendations to the individual preferences and purchasing behavior of their customers. In addition, the data enables high-quality segmentation in order to precisely cluster the customer base and thus increase the relevance and effectiveness of campaigns. Surveys show that 84 percent of brand companies use basic segmentation in their email marketing.

How has the use of automation and AI changed email marketing?

Hikel: Both approaches have fundamentally changed email marketing. The development has been rapid: in the past, automation was mainly used to simplify recurring tasks such as sending mass emails. Today, it enables much more dynamic interaction with customers in real time. This means that we can react immediately to customer actions, be it with personalized offers shortly after a customer has visited a certain page or placed a product in the shopping cart. AI reinforces this development by creating contextual and highly personalized experiences. These are no longer an option, but are demanded by consumers: 71% of consumers now expect personalized marketing, according to McKinsey figures. 76 percent are frustrated if marketing is not personalized. Particularly interesting in this context: according to Statista, 78% of marketers rely on personalized emails.

"Email is established in the consumer goods industry "

How far along is the retail sector in using intelligent email marketing strategies?

Hikel: That can't be generalized and is highly industry-dependent. In the consumer goods industry, particularly in the fashion & beauty and home & living sectors, email marketing is well established. Many retailers already rely on automated campaigns such as transactional emails, welcome emails or shopping cart abandonment emails. Nevertheless, there is still room for improvement. The biggest challenge is still data collection, data quality and the use of this data for relevant communication. The German Dialog Marketing Association recently revealed that 78% of the companies surveyed collect standard information such as name and title, but only 20% ask for product and topic preferences.

Customers expect a seamless shopping and user experience across all channels. What role does email marketing play in omnichannel marketing to create a coherent user experience?

Hikel: Brands and retailers today need to be present wherever their target group is active. Email is a central component of any omnichannel marketing strategy. It is successful when it is intelligently linked with other marketing channels and systems. This means that campaigns can be extended beyond email to social media, websites, mobile applications and even physical locations. This strengthens customer loyalty and increases customer value: omnichannel campaigns achieve 90 percent higher customer loyalty than single-channel campaigns and increase the lifetime value of customers by an average of 30 percent.

How will email marketing develop over the next 5 years - and what role will Optimizely play in this?

Hikel: Forecasts are difficult as the technical innovation cycles in our industry are getting shorter and shorter. What is clear, however, is that generative AI will make email marketing even more responsive, precise and efficient. Real-time personalization and automated responses are already available in many advanced email marketing platforms. However, current systems are often still limited in their ability to fully analyze complex behavioral data in real time and generate highly personalized content from it. Future developments in this area aim to further refine and improve these systems. In the future, I therefore see an even stronger fusion of real-time data analysis and personalized content, which will make email marketing even more effective. With Optimizely, we will accompany these developments and offer solutions that not only reactively but also proactively respond to the needs of customers.

In our major industry report, we explain how effective email marketing works in retail and e-commerce and which KPIs and trends are particularly relevant for the fashion & beauty and home & living sectors. Download for free!