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SMS Marketing 2021 How Ecommerce, D2cs, and Others Are Leveraging This Emerging Consumer Touchpoint

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SMS Marketing 2021 How Ecommerce, D2cs, and Others Are Leveraging This Emerging Consumer Touchpoint SMS Marketing 2021 How Ecommerce, D2Cs, and Others Are Leveraging This Emerging Consumer Touchpoint As one of the fastest-growing tools in a marketer’s arsenal, SMS can be a highly effective customer communication channel, but it also comes with its own set of challenges. This eMarketer Report discusses the business applications of SMS messaging, the pros and cons of SMS marketing, its relationship to email marketing and live chat, and best practices within the discipline. presented by Dear eMarketer Reader, eMarketer is pleased to make this report, SMS Marketing 2021: How Ecommerce, D2Cs, and Others Are Leveraging This Emerging Consumer Touchpoint, available to our readers. This report features eMarketer data and insights, and discusses the business applications of SMS messaging, the pros and cons of SMS marketing, its relationship to email marketing and live chat, and best practices within the discipline. We invite you to learn more about eMarketer’s approach to research and why we are considered the industry standard by the world’s leading brands, media companies, and agencies. We thank you for your interest in our report and mGage for making it possible to offer it to you today. Best Regards, Nancy Taffera-Santos Nancy Taffera-Santos SVP, Media Solutions & Strategy, eMarketer eMarketer, Inc. www.emarketer.com 11 Times Square, Floor 14 [email protected] New York, NY 10036 SMS Marketing 2021: How Ecommerce, D2Cs, and Others Are Leveraging This Emerging Consumer Touchpoint As one of the fastest-growing tools in a marketer’s arsenal, SMS can be a highly effective customer communication channel, but it also comes with its own set of challenges. How big is SMS in the business world? Coronavirus Impact: Emerging Technologies in Business-to-consumer (B2C) text messaging is growing Which US Retailers Plan to Increase Marketing rapidly. According to Juniper Research, global mobile Investments, Jan 2020 & June 2020 business messaging traffic hit 2.7 trillion in 2020, up 10% % of respondents from 2019. Brands are using SMS in various customer Customer data platform (unified view of the customer) communication applications, including marketing messages, 57% customer support, transactional messages, and more. 49% Alternative payments (Apple Pay, cryptocurrency, AfterPay, etc.) What is driving growth for SMS marketing? 52% 40% The pandemic undoubtedly accelerated adoption of SMS Messaging/SMS platforms marketing, with cloud communications provider Infobip 51% seeing 8.5% and 20% growth in SMS marketing messages 56% in March and April 2020, respectively, compared with Advanced attribution & measurement technologies February. In January 2020, 51% of retail marketers in a 48% CommerceNext survey sponsored by Exponea said they 43% planned to increase investment in messaging or SMS AI and other technologies (for personalization, customer service, etc.) marketing; that figure grew to 56% in June. 44% 43% What are some of the challenges to SMS marketing? Jan 2020 June 2020 Because customers open SMS marketing messages more Note: Jan 2020 n=111; June 2020 n=75 Source: CommerceNext, "The Big Pivot: How Traditional and Digital-first Retailers frequently than emails, SMS unsubscribe rates are higher, Re-prioritized Marketing Investments in the Wake of COVID-19" sponsored by Exponea, July according to experts we interviewed. SMS marketing 24, 2020 262293 eMarketer | InsiderIntelligence.com messages are also regulated by federal law, and marketers should be aware of brand safety issues when using shared KEY STAT: Pre-pandemic, 51% of US retailers planned to short codes. increase their investment in messaging and SMS platforms; by June 2020, that figure had jumped to 56%, above all How should marketers prepare for SMS marketing other technologies. in 2021? Marketers must develop or audit their SMS marketing strategies, including figuring out what types of messages Contents they will send, determining frequency and length, and embracing tactics that will allow their marketing lists to grow. 3 SMS Marketing 2021 4 How Businesses Use SMS Today WHAT’S IN THIS REPORT? This report discusses the 7 Pros and Cons of SMS Marketing business applications of SMS messaging, the pros and cons of SMS marketing, its relationship to email marketing and 9 Properly Executing an SMS Marketing Strategy live chat, and best practices within the discipline. 11 What’s Next for SMS Marketing in 2021 13 Key Takeaways 14 Insider Intelligence Interviews 15 Editorial and Production Contributors PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 3 Defining SMS Marketing SMS Business Messaging Traffic Worldwide, Short Message Service (SMS) is a standard that lets mobile 2019 & 2020 trillions devices send brief text-based messages to one another that’s 3.5 been in use since the 1990s. 3.2 SMS Marketing is any type of text message-based B2C marketing sent over a cellular network. While SMS is still dominant, other message types are included in this broader definition: Multimedia Messaging Service (MMS): The MMS standard allows messages to include images; with SMS, images appear as links the recipient must click to view. MMS messages also have higher character limits than the SMS standard’s limit of 160. However, messaging platform vendors tend to charge a higher rate for MMS messages. As a result, while many brands experiment with MMS, most brands contacted for this report 2019 2020 find SMS to be more cost-effective. MMS may be preferable for Note: SMS/text messages sent by brands and enterprises brand building. Source: Juniper Research, "Mobile Messaging: Operator Strategies & Vendor Opportunities 2020-2024" as cited in press release, May 13, 2020 Rich Communication Services (RCS) is another set of 255550 www.eMarketer.com communication standards that is far more feature-rich than SMS, offering users the ability to share high-resolution images, Vendors are seeing significant growth in the number of animated GIFs, videos, and other larger files, as well as greater messages deployed on their platforms. Personalized interactivity. It offers features like those found on dedicated messaging platform Attentive said it sent more than a billion messaging apps, such as Facebook Messenger or WhatsApp. total SMS messages in November 2020 alone. In this report, we are not focused on marketing through social messaging apps (i.e., WhatsApp, WeChat) or iMessage. SMS This increase is driven not just by brands, but by consumer messages are not the same as iMessages, which can only be interest, as well. Attentive said that across its customer base, sent from one Apple device to another and may include photos, millions of subscribers opted in for SMS shopping messages videos, and animated GIFs. each day between Black Friday and Cyber Monday 2020. Ecommerce email marketing and SMS platform Omnisend How Businesses Use SMS Today also reported increased conversion rates over the same period in 2019, and Salesforce Marketing Cloud said SMS marketing messages grew 171% during Cyber Week versus According to Juniper Research, the number of SMS/text the year prior, compared with just 9% YoY growth for email. messages sent by brands and enterprises worldwide grew 9.4% year over year (YoY) in 2020 from 3.2 trillion to 3.5 trillion, demonstrating increased widespread Average Holiday Season SMS Performance Metrics Worldwide adoption of a technology that had already been around Clickthrough rate Conversion rate for some time. Nov - .% .% .% . % Black Friday .% .% .% . % Cyber Monday .% .% .% .% Cyber * .% .% .% .% Cyber ** .% .% .% .% Note: represents activity among Omnisend clients, broader industry metrics may vary; *Thanksgiving through Cyber Monday; **the Sunday before Black Friday through the Tuesday following Cyber Monday Source: Omnisend, "BFCM : Email, SMS, and Push Message Statistics," Dec , eMarketer | InsiderIntelligence.com PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 4 Text messaging has myriad business uses from customer 7. As a replenishment mechanism: While not support to marketing and promotions. It’s no surprise then, commonplace, this is an area to watch. Brands can that every practitioner uses it differently. receive an order via text message. The customer is then routed to a page where they input shipping and billing information that’s saved. Subsequent orders can then be How Marketers and Service placed via text without the customer needing to re-enter such information, eliminating a friction point. Professionals Use SMS Messages Marketers and service professionals are using SMS Companies employing SMS marketing tend to either be messages in many ways: innovators, early adopters, or simply have less loyalty to other channels like email. Interviews with marketing 1. As a complement to email marketing: Despite email’s executives revealed that most who are not currently utilizing continued success, some marketers are concerned that SMS are watching the space closely or in the planning consumers may be tuning emails out. Some brands stages of adding those capabilities to their marketing are utilizing SMS to follow up on messaging they may tech stack. have missed. SMS marketing can be highly cost-effective, especially for 2. As a live chat substitute: Email marketing could have smaller businesses. Janna Land, co-founder and COO of been used to develop a two-way conversation between direct-to-consumer (D2C) food retailer FarmFoods, Inc., brands and audiences but didn’t. SMS is conversational said SMS gave her “the ability to break through in a very and facilitates an ongoing dialog between brands noisy and competitive advertising environment.” and consumers. Land believes customers who receive texts are more inclined 3. To provide a human element: SMS may be AI-deployed to open the company’s emails. In fact, FarmFoods texted a depending on rules written by the brand, and an ensuing list of customers who had stopped engaging with its email conversation may even be managed by AI; however, marketing and drove $4,000 of sales in less than 24 hours at when warranted, a human can take over the conversation a cost of just $60.
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