What’s Old Is New Again As Online Sellers Rediscover SMS Text

Mobile texting never quite made it into the marketer toolkit, but some online sellers are re-examining SMS as a more cost-effective way to engage known customers than advertising.

And ecommerce tech vendors are beefing up mobile messaging because the channel now supports data-driven segmentation, like retargeting campaigns. These capabilities are increasingly valuable as frictionless mobile wallets like Apple Pay and Android Pay nudge text messages toward direct commerce.

Mobile operators like Apple, Alphabet and Samsung are adding more marketing capabilities to native messaging services because they’ve seen apps like Facebook Messenger and WhatsApp soak up usage rates and revenue from texting, said Gartner research director Charles Golvin last year about SMS marketing growth.

“Marketers need to prepare themselves for yet another messaging medium to reach consumers,” he said.

The online wholesaler Boxed added SMS messaging in the second half of last year “because we feel it’s an opportunity to break through the clutter,” said Nitasha Mehta, who runs the company’s re-engagement marketing.

“We see this as a brand-new channel, strictly additive to what we’re doing,” she said.

Because email inboxes often filter out brand messages, phone numbers are a more durable connection to an individual.

Boxed accumulates mobile numbers and opt-ins by offering exclusive deals to its email list, Mehta said. The double opt-in – into the email list and then into the messaging program – makes it a particularly brand-loyal group and means the company doesn’t get consumer pushback like with push notifications.

Boxed has seen 100% open rates (the oldest SMS brag) and 20% click-through rates for texts, with eventual conversion rates two to three times higher than email messages.

The direct-to-consumer bedding company Boll & Branch gets most of its SMS audience from its mobile site, where users can press a button and then confirm a text message for a discount, said co-founder and CEO Scott Tannen.

Most mobile messaging feels forced, he said, like when a brand sends a notification if someone is near a store.

The Boll & Branch text channel is closer to a loyalty program “where customers can stay engaged and get the first look and chance to buy new products,” Tannen said.

While mobile messages generate a marginal part of overall revenue, he said, they have driven sales in the low millions since the company added the channel six months ago.

“What’s great about SMS is that the market is so clean,” he said. “It’s not a channel full of junk or spam.”

And it isn’t just startups taking up text messages. Kiehl’s, the third-oldest retailer in the country, has taken up SMS messaging to turn existing customers into auto-replenishment subscribers.

Text messages are a cost-effective way to remain engaged with shoppers compared to direct-to-consumer ecommerce companies like Harry’s and Dollar Shave Club, which must find new customers in an expensive ad and acquisition funnel, Julia Mavrodin, Kiehl’s assistant VP of ecommerce and digital marketing, recently told AdExchanger.

In the US, where most mobile users are on an unlimited text plan, SMS is now a viable marketing channel, said Brian Long, co-founder and CEO of Attentive, which last week came out of beta with a $13 million Series A led by Bain Capital.

Re-engagement is more difficult for ecommerce sellers now, with email performance and online retargeting campaigns eroding, according to Long, who was co-founder and CEO of the mobile retargeting startup TapCommerce, which Twitter acquired for $100 million in 2014.

“This is the next ubiquitous channel where you can enable that retargeting experience,” he said.

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