It’s not enough to have meaningful external benchmarks and solid internal benchmarks. Marketers need the right perspective and context to properly use those benchmarks and to appropriately interpret their current results. That’s especially true during fast-moving peak seasons, like the holiday season for retailers and ecommerce brands.
When measuring your email marketing performance this holiday season, you’ll want to be mindful of several factors. We discuss a wide range of macro economic and channel factors in the on-demand webinar below, but we’d like to highlight the four factors we think are impacting email marketing results the most this year.
1. High Interest Rates
Last year, we were talking about high inflation. That’s dropped dramatically and is on track to be at 2% or lower by mid next year.
However, that’s been achieved by the Federal Reserve rapidly hiking interest rates. That means that debt servicing of all kinds is much more expensive than it was in 2022. Combined with the resumption of student loan payments in October, this has pinched many consumers’ budgets, especially for younger consumers.
For example, credit card interest rates are the highest they’ve been in decades. The average credit card interest rate in America today is over 24%, according to LendingTree. This has propelled the popularity of buy now, pay later (BNPL) services. On Cyber Monday, BNPL usage increased 43% year-over-year, CNN reported.
And mortgage rates are the highest in more than two decades. Recently, 30-year mortgage rates topped 7%, according to FreddieMac data. As recently as early 2021, they were under 3%.The rise in rates has been so rapid it has caused much of the housing market to seize up, because people are unwilling to move and see their mortgage rate double. That has kept the supply of homes for sale low and home prices high. The lack of mobility has also depressed sales of furniture, electronics, and other home goods that people often buy when moving—and that are often bought as holiday gifts for people who have recently moved.
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2. Heavy Discounting
Retailers have responded to consumers’ financial stress and deal-seeking behavior by serving up big discounts. And the heavy discounting started in October, much earlier than usual. According to CNBC reporting, discounts were double what they were last year in categories like sporting goods and furniture, and overall were almost double what they were in 2021, when supply chain issues kept inventories and discounts low.
The negative effect of the discounting could be seen in our revenue per email performance on marquee sales days like Black Friday and Cyber Monday.
Are you using these 3 recessionary messaging tactics?
3. MPP-Impacted Audience Expansion
Every holiday season, most retailers expand their email marketing audiences. They do this because holiday shopping and holiday deals often reengage subscribers who haven’t been active in a while. They also do this because some subscribers are purely seasonal buyers.
Of course, Apple’s Mail Privacy Protection makes determining who engaged last holiday season trickier than ever because it obscures real opens with auto-generated opens for subscribers using Apple Mail. MPP has made seasonal audience expansion much less scientific and much more of a guessing game. With big pressure on email marketers to generate sales this holiday season, it appears they’ve thrown some caution to the wind and aggressively expanded their audiences, despite the lower visibility.
For example, on Cyber Monday, the retailers and ecommerce brands in our data set expanded their email volume by 13% compared to last year, which contributed to a 12% year-over-year decline in revenue per email.
For our most comprehensive advice on MPP, get our Definitive Guide to Adapting to Mail Privacy Protection via free, no-form download.
4. ‘The Fifth Quarter’
Consumers are stretching their budgets and are very sensitive to discounts this year. That means that more than usual, they’ll be interested in holiday clearances and other post-holiday promotions.
And after spending a lot on others during the holiday season, many people will be looking to get some great deals on stuff for themselves. Self-gifting accounted for 57% of holiday shopping occasions between Dec. 26, 2022 and Jan. 4, 2023, and that rate has increased steadily over the last three years, driven primarily by millennials and Gen X, according to Google research.
As usual, consumers will also be cashing in the gift cards they received during the holidays. According to an NRF survey, 44% of consumers expected to give at least one gift card to loved ones, making it the second most popular gift behind clothes and accessories.
A Deeper Dive
For a discussion of all the factors impacting email marketing results this holiday season, as well as many more stats and insights about email campaign performance, watch our companion on-demand webinar below.
We hope you enjoyed “2023 Holiday Email Marketing Trends.” Some other on-demand webinars from Oracle Digital Experience Agency include:
Need help with your email marketing campaigns? Oracle Digital Experience Agency has hundreds of marketing and communication experts ready to help Oracle customers create stronger connections with their customers, partners, and employees—even if they’re not using an Oracle platform as the foundation of that experience. Our award-winning specialists can handle everything from creative and strategy to content planning and project management. For example, our full-service email marketing clients generate 24% higher open rates, 30% higher click rates, and 9% lower unsubscribe rates than Oracle Responsys customers who aren’t.
Want to better understand your email marketing risks and opportunities, take advantage of our free Email Program Assessment. Our experts will check your deliverability, review your email creative, audit your signup process, do a partial competitive analysis, and more. If interested in this free assessment, reach out to us at OracleAgency_US@Oracle.com.
Now completely updated, this blog post was originally published on Dec. 5, 2022 by Clint Kaiser, Kaiti Gary, and JT Capps.
Clint Kaiser is the Head of the Analytic & Strategic Services team at Oracle Digital Experience Agency. His background in the email marketing space includes 20 years of experience with ESPs and digital agencies. His analytical approach to driving change in digital marketing is reflected in his quantitative approach to improving clients' business outcomes.
Joslin Shannon is Senior Director of Analytic & Strategic Services at Oracle Digital Experience Agency.
JT Capps is Strategic Director of Analytic & Strategic Services at Oracle Digital Experience Agency. His background includes over 20 years of experience in digital marketing strategy, integration, execution, and advanced analytics with brands and digital agencies. Levering that experience, JT directs high-impact, data-driven marketing solutions across customer acquisition, conversion, loyalty, and retention/upsell across all industry verticals.