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Top 3 Reasons Retailers are Leading ESP Consolidations

By Kellye Snodgrass

Plus, how COVID-19 has accelerated email service provider (ESP) consolidation trends in retail and what to look for in a consolidated ESP

A few years ago, the email marketing technology landscape looked a lot different than it does today. 

Previously, retail marketers had to recruit and integrate several point solutions to create a best of breed tech stack capable of delivering strong results around customer experience and revenue improvements. For example, most retailers’ tech stacks stitched together different solutions for triggered emails, batch emails, product recommendations, product feeds, email capture and AI-driven predictive segmentation. 

Now, best of breed technology exists that can cover all of these capabilities in a single platform — saving retailers significant time and money while delivering even better results. 

The Trend Toward ESP Consolidation in Retail

As email marketing technology continues to innovate, more and more of the necessary capabilities for eCommerce marketing teams can be found in a single platform. As a result, we’ve seen a trend of retailers consolidating their email marketing technology onto fewer platforms that can do more.

Hammacher Schlemmer is a prime example of this trend. When the retailer set out to improve personalization and deliver better 1:1 experiences for customers, the marketing team decided to consolidate onto a single ESP with Bluecore. Since then, Hammacher Schlemmer has grown email revenue through intelligent 1:1 personalization. Most notably, this move has enabled the marketing team to automate the build and delivery of personalized campaigns to easily connect customers to the products they’re most interested in — resulting in 16% year-over-year revenue growth in email.

How COVID-19 Accelerated ESP Consolidation Trends

The new economic landscape we’re experiencing due to the COVID-19 pandemic has accelerated the trend toward ESP consolidation for retailers. In the time since lockdowns were put in place, store closures, supply chain disruptions and cautious spending among consumers have put a severe strain on retailers.

To reduce spending, many retail executives have directed marketing teams to evaluate their tech stack and cut any solutions not deemed “business critical” or that have overlapping capabilities with other solutions in their tech stack. This pressure to look for savings has most certainly accelerated the ESP consolidation trend that was already underway in retail.  

Why Retailers Are Considering ESP Consolidation Now More Than Ever

Recent pressure to evaluate technology investments and find savings may have accelerated ESP consolidation among retailers, but the benefits for doing so exist outside of the new environment created by COVID-19.

Regardless of the circumstances — healthy economy or not, brick and mortar stores open or closed and so on — retailers who consolidate their ESP onto a single best of breed technology realize many benefits.

In particular, most retail marketing teams thinking about consolidation are looking for the right ESP to help them achieve three key things:

1) Lower total cost of ownership

It’s no secret that more technology means higher total costs that block marketing teams from achieving the biggest possible return on investment (ROI) on their email marketing programs. Consolidating onto a single email platform means fewer platform fees, service charges, integration fees and more. Not only does this consolidation lead to cost savings, but it can also increase ROI — growing the business and freeing more revenue to invest in other initiatives. 

2) More efficient workflows

The more systems in play, the more time it takes to move data from one platform to another to execute on a campaign. For example, it’s far too common for retail marketers to have to create an audience or segment in one platform, move it to another platform to actually build the creative for the email and then consult with yet another platform to ensure frequency caps and subscription preferences are correct between batch and triggered emails. Further, the time lapse involved with migrating data files across multiple platforms impacts your marketing team’s ability to react quickly to changing inventory or market conditions.

But every hour you can save building a new campaign or trying to personalize an email is more time you can spend on strategy. Having all of these capabilities within a single platform makes the entire workflow of launching a campaign seamless. Being able to do all of it from a single platform with high levels of automation creates even more efficiency that allows for less execution on highly tactical efforts and more time developing strategies to achieve key goals. Critically, you need a technology with a unified retail data model that brings together customer, behavior and product data and makes those insights accessible and actionable to do everything effectively from a single platform.

3) Improve performance through personalization at scale

Consumers continue to demand more personalized retail experiences, especially in the environment created by COVID-19. However, having multiple technologies stitched together creates data silos and leads to frustrating, manual workflows that block personalization. Many brands turn to customer data platforms (CDPs) as an initial step in consolidation, but few effectively activate these tools to reap the benefits.

On the other hand, when you consolidate all of your data onto a single platform that prioritizes personalization capabilities and allows for fully automated, AI-driven, highly intelligent workflows, personalizing your entire email marketing program (and beyond) becomes significantly easier, resulting in improved deliverability, higher consumer engagement and greater ROI.

What to Look for in a Consolidated ESP

If your marketing team is having the ESP consolidation conversation, it’s important to do your research upfront, as picking the right partner is critical to success. Here are some top recommendations around what to look for when consolidating to a single ESP.

Capabilities to Prioritize in a Consolidated ESP

Consolidating your ESP means you will need a single technology that can do everything. Based on that need, you should prioritize capabilities like:

Questions to Ask Potential Technology Partners

Beyond capabilities, it’s also important to make sure you have a true partner that can grow with you. With that in mind, you should ask potential partners questions like:

  • What does your roadmap for innovation look like? This should help you understand how the partner will continue to evolve with your brand and meet future needs that arise as the email marketing landscape continues to evolve.
  • What expertise do you offer for retail specifically? Retail is a complex and unique industry that requires a high level of expertise to get right. The best partners for eCommerce marketing teams will offer retail-specific technology that makes it possible to go deep into retail data and goals and execute campaigns and creative changes quickly and effortlessly. They will also back this technology with a team of retail experts who can help guide strategies to meet those goals.
  • How do your goals align with ours? The most important piece of success for any partnership is goal alignment. As a result, it’s important to ensure that any email marketing technology partner has goals that align with yours. Today, this largely means goals should be performance-driven, not volume-driven.

Ready to Start the ESP Consolidation Conversation?

Is your marketing team ready to start the ESP consolidation conversation? Check out the Ultimate Guide to ESP Selection for the Modern Retail Marketer to discover how to best evaluate the next generation of email marketing technology and prepare your team for a successful change.

Kellye Snodgrass

Kellye Snodgrass

Kellye is a member of the Product Marketing and Operations team and is one of Bluecore's first Product Marketing hires. She's spent most of her career in marketing technology with a special focus in the eCommerce space. When she's not online shopping on one of our customers' stores, she loves to write about data-driven retail marketing strategies that not only drive performance, but are easy to implement