Major Online Retailers Say The Power Of Email Is Dying

Email is losing its power as a marketing tool for online retailers, according to senior-level executives at Gilt Groupe and Rent The Runway.

Fewer consumers are opening promotional emails, especially since Gmail added a new setting in August that automatically archives promotional messages into a tab separate from users’ inboxes, executives said.

“I think everyone would probably agree that email, even before the shift with Gmail, was becoming a less and less powerful channel,” Jennifer Fleiss, cofounder and head of business development at Rent The Runway, said at Business Insider’s Ignition 2013 conference.

“For Rent The Runway, it has meant we have to be really creative,” she said. Rent the Runway is a membership-based website that rents high-end designer apparel and accessories to customers for four to eight days.

To adapt to the change, Rent The Runway and other retailers are ramping up their efforts on social media and communicating with consumers more through mobile push notifications.

Gilt Groupe CEO Michelle Peluso said Gilt hasn’t seen a big revenue drop from the Gmail changes, but she confirmed that open rates of emails have gone down. As a result, the company is focusing its marketing efforts on push notifications and limiting the number of emails it sends to consumers, she said.

“There are definitely some open rate issues, for sure, but at the same time there are all these new channels” for communicating with consumers, she said. Peluso said more than 50% of Gilt’s traffic now comes from mobile.

Disclosure: Gilt Groupe’s co-founder, Kevin Ryan, is Business Insider’s co-founder and Chairman.

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