We were in Chicago last week for the Internet Retailer show.  When it first launched in 2005, my initial feeling was that it would take a few years to get off the ground.  Well, my hat is off to Steve Rogers and the rest of the Vertical Web Media team, because they now host the largest online retailing conference that I have ever been a part of. 

As a part of the show, a large drawing for a new Jaguar was held amongst the retailer attendees.  Congratulations to our customer Jay Allen from Cutter & Buck.  He got to drive a new Jag back to Atlanta!

In 2004, Internet Retailer published its list of the Top 300 retailers on the Internet.  Last year, they followed up with a Top 400 list and this year they recently released a Top 500 list.  The guide asks each retailer who their vendor partners are for services like site design, search, fulfillment, CRM, Web analytics, email marketing, affiliate management, performance monitoring, etc.  I once worked for a vendor who was the most prevalent provider of its kind for the top 50 companies on the list.  Since then, I have kept an eye on these types of things.

Ready for some fuzzy math?   I won't give away too much info, since Internet Retailer would prefer that you buy the guide  ; )  However, if you add up the number of top retailers who use each type of vendor and you keep metrics on trends from year to year, you will notice two things.  First, congratulations are in order to Responsys, e-Dialog, Lyris and WhatCounts for having a significantly higher percentage of customers on this year's list than last year's list.  That's somewhat newsworthy if you are an employee or a customer of any of those vendors. 

However, the really newsworthy thing is that 21.4% of last year's Internet Retailer Top 400 and 22.3% of this year's Internet Retailer Top 500 say that they use an "in-house" solution for email marketing.  Now, this could mean a few different things.  They might use a software solution that wasn't mentioned by name.  They might not have taken the time to carefully respond to the questionnaire.  Of course, many of the companies have switched vendors between the publication date and now.  Still, no matter how you slice the numbers, there is a significant number of top retailers who do not work with one of the leading email service providers.

If we compare to other online marketing industries, the difference is clear: Only 10% of the retailers use an "in-house" Web analytics solution.  Only 9% of them manage their own affiliate relationships.  It's an interesting thing, because deliverability management should be the last thing on a retailer's mind.  Why wouldn't a busy marketer want to outsource a lot of the list management, segmentation, triggering, deliverability, reporting and other email marketing functions?  Perhaps the industry is still maturing after almost ten years?  Perhaps customer satisfaction is not where it needs to be?  Perhaps the email marketing tipping point is yet to come?

It's an odd thing, because email marketing is continually proven to be one of the only tactics with a proven positive ROI for almost every retailer.  You have probably heard someone say "it's a lot tougher to earn a new customer than to keep a good one" once a week for the past 20 years.  Why not invest a little to earn a lot?