Electronic retailers hurt by spam flood

A New York-based online jewellery retailer blasted an e-mail to customers with the subject line “Hot Summer Styles.” Even though the intended recipients had asked to receive mailings from the company, some 300,000 of them never saw it.

The word hot apparently triggered filters that blocked the message from being delivered, said Pinny Gniwisch, a founder of Ice.com. “The filters are not smart,” he lamented.

Many electronic retailers at last week’s eTail 2003 conference here complained that they’re suffering from an antispam backlash even though they said they have opt-in mail policies and don’t spam anyone.

Several electronic retailers said that in the past six months, they’ve found their marketing messages being increasingly blocked or filtered, or simply going unread by customers who are inundated with so much unwanted e-mail that they’re starting to tune out even legitimate communications.

“This is the big battleground – getting your mail through,” said Daniel Gudema, e-commerce strategist at ABC Distributing LLC in North Miami. “Maybe e-mail will become obsolete as a marketing tool.”

Some retailers claim that they’re starting to see the harmful effects in their general ledgers. Online retailer eBags sends out about 8 million electronic messages per month to customers who opt to receive its mailings, according to CEO Jon Nordmark. A year ago, 22 per cent of the recipients made purchases as a direct result of those messages. Now the conversion percentage is 13.2 per cent.

Nordmark said the Greenwood Village, Colo., retailer hit profitability last year and has seen overall revenue grow 90 per cent. But e-mail is no longer the primary growth driver. It now ranks behind affiliate marketing, off-line catalogues and search technology on the priority list, he said.

Mike Frazzini, vice-president of technology at eBags, is convinced spam is to blame. He estimated that at least 30 per cent of the company’s e-mail is being blocked or filtered, although he acknowledged that it’s tough to quantify. He said a company often doesn’t know if its mail is being blocked at the server by an Internet service provider or a corporation, or on the client side with filters set up by individual users.

Frazzini said the company is working to make sure its domain isn’t turning up on any of the black lists that antispam groups, such as Mail Abuse Prevention System LLC, have established to help companies set up spam filters. He said corporations and Internet service providers sometimes use those lists to set up server-based filters.

Matthew Berk, an analyst at Jupiter Research in New York, advises retailers to outsource bulk mailings to third parties that stay on top of issues involving spam. Those providers include CheetahMail Inc., DoubleClick Inc., Digital Impact Inc. and Responsys Inc.

In addition, Berk said retailers would be wise to stop using the same sorts of phrases that true spammers insert into the subject lines of their messages, such as “act now,” “free” and “one-time opportunity.” Exclamation points are another no-no, he said.

“If it sounds like spam,” Berk warned, “it is spam.”

Many companies now do more extensive monitoring of the open, click-through and conversion rates to gain greater insight into their e-mail efforts.

Tower Records, a Digital Impact customer, has found in the past six months that its e-mail open rates have dipped lower than they’ve ever been, according to Kevin Ertell, senior vice-president of online operations. Ertell said he suspects that mail is getting lost in the spam shuffle.

“If the overwhelming problem isn’t solved, it won’t really matter what content we put in the e-mail because people aren’t seeing it,” Ertell said.

Ertell, like some other retailers, said he would support legislation to help curb the problem. “We have to do something about it,” he said. “It’s gone beyond annoying. It’s negatively affecting people’s business operations.”