July 31, 2021

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Retail SMS Marketing: Benefits, Best Practices, & Examples of Customer Texting Done Well

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Email campaigns can sit unopened in a subscriber’s inbox for hours or days. Sometimes, they can even get sent directly to a “promotions” tab or the trash. 

In contrast, 99% of SMS marketing campaigns are read, making SMS an extremely effective marketing channel for retail store owners to reach prospective and current customers. 

In fact, 78% of consumers say SMS is the fastest way to reach them, which is why texting is the perfect medium for sharing time-sensitive promotions and alerts. It’s also a great way to welcome new subscribers with nurture sequences and welcome offers.

If you’re a retailer who’s new to SMS marketing, we’ve got you covered. 

This article covers SMS compliance, benefits for retailers, best practices, and SMS campaign types you can try for your business. 

Table of Contents:

What is SMS marketing?

SMS marketing is a way to send campaigns or promotional messages to your customers using text messages. Retailers use SMS marketing to communicate updates, time-sensitive offers, and other business alerts. 

Unlike email, the messages are short, with a limit of 160 characters. SMS campaigns appear on your subscribers’ smartphones a few seconds after they’re sent. Depending on the user’s mobile phone settings, they may get a push notification as soon as your message is delivered. 

Some retailers, like Handheld Handmade, built their business model completely on SMS marketing. 

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Image: Handheld Handmade Homepage

After subscribing to Handheld’s text messaging list, users are prompted to fill in a questionnaire. Responses are used to confirm when they want to receive messages, their budget, and what types of products they’re interested in. This approach helps Handheld create hyper-personalized SMS campaigns for its audience.

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Image: The messages Handheld Handmade sent me after signing up

SMS subscribers get texts twice a week, based on profile preferences. Once their account is activated, all transactions take place entirely within the user’s text messaging app. The only thing shoppers need to do is reply with “Buy.” 

SMS is a handy channel for you to develop relationships with your customers. You can send mass or 1:1 personalized text messages to SMS marketing subscribers. 

SMS compliance: When can I text my customers?

Being SMS compliant is crucial, as breaking the rules can cost you. The regulations are straightforward and help protect the privacy of your customers. 

In the United States, you must be compliant with the Telephone Consumer Protection Act (TCPA), which is a federal law, and the guidelines of the CTIA, a wireless communication industry trade organization.

Here’s a high-level overview of SMS compliance requirements:

  • Your customer must opt-in for SMS marketing, and it has to be a separate opt-in from email marketing. 
  • You must explain to your customers what types of messages they will receive and clearly state how they can opt out. 
  • You must respect opt-out requests. 
  • You can not send SMS marketing between 9 pm and 8 am in the recipients’ time zone—these are considered “quiet hours.”

If you violate TCPA regulations you may have to deal with private lawsuits and fines of up to $1,500 per message. Failure to follow CTIA guidelines can lead to consumer complaints and messages getting flagged as spam. Telecom companies can also audit you or cut off your messaging campaigns. 

“Make sure you’re in compliance when it comes to your text message list,” says Kelly Rand, founder of Handheld Handmade. “SMS is double opt in and you need to make sure any unsubscribe messages or other required language is included in your broadcast messages.”

The benefits of SMS marketing for retailers

More people own a cellphone than a toothbrush. Wrap your head around that. 

Some people, including 78% of Gen Z, consider their mobile phone their most important device to go online. 

Implementing SMS marketing for your retail business is a guaranteed way to meet your customers on their preferred channel and increase sales.

Aside from the obvious end goal of using SMS marketing to grow your retail business, here are more SMS marketing benefits to consider. 

1. SMS performance metrics are higher than email marketing

The average open rate for email marketing is 20%. While that’s not bad, SMS open rates can be astronomically higher—as high as 98%

The average click-through rate (CTR) for email marketing is 2.5%, while SMS marketing CTR is, on average, around 19%

Increased customer engagement leads to increased sales. For this reason, it’s worth testing SMS marketing for your retail business. 

2. Meet your customers where they are and increase engagement 

According to these smartphone statistics, smartphone users click, swipe, and tap their phone 2,617 times a day. On average, people spend two hours and 51 minutes a day on their smartphone, and 52% of the world’s population are mobile internet users. 

Use SMS marketing to meet your customer where they’re spending a huge chunk of their time. On their phones.

According to this study from February 2020, 61% of Gen Z had purchased a product via mobile in the last month

Implementing SMS marketing for your retail business is a no-brainer. You can boost engagement by reaching your customers quickly and conveniently where they’re already spending a lot of their time.

3. SMS marketing is sales-funnel agnostic 

Use SMS marketing to engage with your customers and prospective customers in various stages of their buying journey

For people who just recently learned about your store, SMS marketing is a way to engage and nurture them to become a customer. 

For existing customers, SMS is a way to keep in touch, boost repeat purchases, and increase customer retention and loyalty. 

4. SMS marketing can increase sales 

According to MobileMonkey, consumers who get SMS marketing messages are 40% more likely to convert than those who don’t.

The same study states that SMS engagement rates are six to eight times higher than retailers normally achieve via email marketing.

These SMS metrics from retailer Hydrant proves it:

  • 25x ROI
  • 21% click-through rate average in 2020
  • $10,000+ from a single text for a product launch

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Image: Hydrant’s SMS Subscribe Page

5. Campaign creation is quick and easy 

SMS marketing campaigns are usually short and snappy and don’t involve the creative assets that you need for email marketing. This makes it easier to plan and schedule SMS as well as test and iterate quickly based on past campaign results. 

You can test message length and format to see what your audience responds to best. For example, emojis may work for some retailers, while others see an influx in unsubscribes after using emojis. 

The key is to test and learn from each campaign and iterate on a regular basis. 

6. Data-driven insights help you personalize and perfect your messaging 

Campaign data helps you understand when and how to engage with your customers. SMS marketing provides actionable insights to help you develop your strategy.

SMS marketing data is useful in determining how to segment your customers based on their interests and behavior. Segmentation is helpful to send unique, personalized messages

Depending on your SMS marketing platform, there may be an abundance of ways to build different segments

Five segmentation categories you can consider are:

  1. Location. Send personalized SMS campaigns to customers based on their location.
  2. Customer behavior. Gather information about your customers’ specific interests, purchasing habits, and order frequency to personalize SMS campaigns.
  3. SMS engagement. Use engagement data from past campaigns to determine what types of campaigns to send in the future. This data can also tell you if you should send a follow-up text on a previous campaign.
  4. Order information. You can personalize text messages based on what stage of ordering your customer is in. Whether their order is confirmed, fulfilled, or on the way, SMS marketing is a great way to keep shoppers in the loop. 
  5. Customer attributes. Similar to email marketing, you can add information like tags, relationship length, and account status to your SMS marketing audiences. These tools can help you segment lists for personalized campaigns. 

“Use data to make decisions on frequency of send,” says John Sherwin, co-founder of Hydrant

“A mistake I made early on was sending too infrequently, because I’m not the type of consumer who likes SMS marketing. I assumed people were annoyed by our texts. But unsubscribe metrics should just be carefully monitored. Ours was below the industry average, and at a level that made it clear that 99% of our customers wanted to keep receiving our messages.” 

7. Drive brand awareness through SMS marketing 

Americans check their phones 80 times a day, and 90% of SMS marketing messages are read within three minutes.

Its reach, high open rates, and affordability make SMS marketing a helpful tool to keep your retail business top of mind.

8. SMS marketing integrates with customer service apps

Many SMS marketing apps integrate with customer service platforms. This can improve your workflow and help you form a two-way conversation with your customers. 

Attentive and Postscript SMS marketing tools both integrate with Shopify, as does Gorgias, a customer service platform.

9. SMS marketing is not saturated (yet)

SMS marketing is a relatively new channel—about 61% of marketers still don’t use SMS, but it’s a growing trend. 

It’s not as saturated as email marketing or social media, so being an early adopter can help you gain a competitive advantage in customer engagement. 

“There’s less noise in SMS for most people,” says Sherwin. “Fewer brands are given permission to text, so you get someone’s full attention. I also have a theory. For those of us who hate seeing those little red bubbles that show something is unread, you will always open a message and mark it as read. This makes the open rates off the charts compared to email.” 

10. Use SMS to expand your omnichannel commerce strategy

Omnichannel commerce helps you create a seamless customer experience across all touchpoints. Add SMS marketing to your omnichannel selling strategy to boost customer engagement and deliver a continuous and convenient conversation. 

Emails and phone calls are still necessary, but SMS can provide a better customer experience in certain situations. 

Consumers today are accustomed to texting and instinctively want to text businesses as well. Text messaging is easier due to its mobile-first nature and real-time notifications. You can answer time-sensitive messages or simple inquiries faster than you would via phone or email.

SMS marketing best practices 

According to these statistics, 97% of companies found customer communication more efficient after launching SMS marketing. And 96% of marketers rated welcome texts as a very effective marketing tool. 

Whether you’re just getting started with SMS marketing or you’re in the thick of it, we’ve outlined best practices to help you succeed.

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Image: An example of an email I received from Hydrant 

1. Get permission 

Like email marketing, SMS marketing is permission-based. You can only send SMS marketing campaigns to someone who has opted in. The question is, how do you get people to sign up? 

Here are a few tips:

  • Include an SMS subscribe checkbox on your email subscribe pop-up form to encourage people to join. 
  • Ask people to text a particular keyword or short code to opt in to a mobile number. 
  • Spread the word about your new SMS marketing channel via email marketing campaigns or on social media (like the image above from Hydrant).
  • Create a dedicated SMS marketing page on your website that outlines privacy and prompts people to sign up. 

Pro tip: When you ask for someone’s phone number, always ask for their email address, too. This way, if they unsubscribe from text messages, you’ll still be able to communicate with them via email campaigns. 

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Image: Handheld Handmade’s SMS and email subscribe form

2. When to use mass texting vs one-to-one customer messaging 

Mass texting and one-to-one customer messaging require different strategies and have different regulations. Most retail businesses use both options. 

Mass texting is commonly used for marketing campaigns that get sent to an audience segment but are still personalized. One-to-one customer messaging is more commonly used for customer service. 

You can use SMS marketing in a way that makes the most sense for your retail business and your potential and existing customers. 

Here, we’ll dive deeper into mass texting versus one-to-one customer messaging: 

Mass texting

Retailers generally use mass texting to share new product drops, discount codes, events, exclusive products, VIP offers, and birthday messages. Mass messaging doesn’t mean the text message itself is not personalized. It just means that it is sent to many versus one. 

It’s equivalent to how you might send an email nurture sequence for a subscriber. It’s a segment with many people, but each message can be personalized based on past behavior and interaction with your brand. 

Mass texting best practices:

  • Before they’ve opted in, tell people how often they’ll receive texts, what type of content they’ll receive, and how they can stop messages.
  • Provide detailed information about your terms and conditions for your SMS marketing campaigns.
  • Let customers opt out.
  • Make it easy for customers to ask for help by providing a long code or 1:1 number that they can send text messages to.

One-to-one customer messaging 

One-to-one customer messaging is a way for you to build a two-way conversation with your customers. It’s similar to how you text with your friends and family. 

Your customer or prospective customer can send a text message directly to an individual at your company. 

For 1:1 messaging you can integrate with a customer service platform to streamline communication. This way, your customer service or sales team can see the messages and information about the customer and get back to them right away. 

The main challenge with 1:1 customer messages is that you need to be ready to respond. And your messaging needs to be on brand. If you hire someone to manage 1:1 messaging, it’s important to train them. You’ll also want to set clear expectations about when 1:1 messaging is available to customers. 

You can choose when you’re “open” for text messaging, but a popular timeframe is 9 am to 5 pm. 

3. When to use short codes vs long codes 

Short codes and long codes are special numbers to receive and send SMS for your company. Advertise your code via your website, social media, or an email campaign so people can easily opt in. 

You can choose either a short code or a long code for your business. With both options, your retail SMS marketing will come from this number. And this is the number that potential and existing customers can text a word to if they’d like to sign up or opt out. 

There are a few differences between short codes and long codes:

 

Short Codes

Long Codes

What are they? A five- to six-digit number you can use nationwide. For example, SHOPIFY (7467439). A 10-digit phone number that is bound to an area code. For example, +1 555-555-5555.
Accepted communication Mass text messages and marketing campaigns are more frequently associated with short codes. These bulk messages are still personalized based on customer behavior. More commonly used for one-to-one customer messaging and customer service messaging lines.
Maximum send The default base rate for short codes is 50 SMS per second.  You can send five text messages per second. Due to carrier regulations, you cannot use long codes for SMS broadcasting.
Limitations and carrier regulations No limitation on the number of SMS sent in a single day. No required ratio for the number of inbound and outbound messages.  Due to carrier regulations, the ratio of inbound to outbound SMS traffic must be greater than 1:3. With long codes, you can send up to 200 SMS per day. 
International usage

Great for nationwide use. With a short code you can send and receive messages within the same country. 

Pro tip: If you sell internationally, you can consider implementing country-specific or global short codes for your retail SMS marketing strategy.

A better choice for international brands. Because a long code is a regular phone number, you can use it internationally. However, you don’t have as much flexibility for mass messaging.
When to use each code

Because short codes are better for mass texting, they are usually used by the marketing team at a retail company. 

Because long codes are better for 1:1 customer messaging, they are commonly used by customer service and salespeople. 

4. Deliver locally 

Find an SMS marketing platform that allows you to grow and scale your mobile marketing strategy. If you sell internationally (or plan to), look for an SMS provider with a large carrier network that allows for localized and global numbers. 

Look for a platform that has a local time zone feature. This way, you can deliver messages at the right time in the right time zone.

5. Watch your SMS performance metrics 

Investing time and money into a new marketing channel isn’t worth it if there’s no ROI. Keeping track of SMS campaign performance is vital. Most SMS platforms have a dashboard where you can track metrics and learn which campaigns are working and which ones aren’t. This way, you can iterate and improve with each new SMS you send. 

The KPIs to consider are open or read rate, click-through rate (CTR), and unsubscribe rate.

6. Aligning SMS marketing and email campaigns

“SMS can be used to help you amplify your marketing campaigns,” says Erin Lopez, ecommerce growth strategist. “Align messaging with your email strategy, but be sure to adapt it for text messages. You can also create text-message-specific campaigns that only SMS subscribers receive.”

This approach can encourage people to opt in if they know they’ll get exclusive offers that email subscribers won’t receive.

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Image: SMS Drip Campaign Workflow Example

7. Send SMS drip campaigns

SMS drip campaigns are a series of automated SMS messages that get triggered once someone opts in or based on behavior once they’re subscribed. 

You can create a workflow of two to three messages (like the screenshot above) to introduce new subscribers to your retail business.

Take it a step further and implement conditional splits that get triggered based on subscriber behavior once they receive your welcome series.

SMS marketing is also a great channel for abandoned cart and browse abandonment drip campaigns. 

8. Keep it short and simple

The maximum number of characters available for SMS marketing campaigns is 160 characters. 

“This isn’t the best place for blasting out links to blog posts,” says Sherwin. “The content of your SMS campaigns should be easily digestible. If you’re rerouting someone from their SMS app, you should be trying to convert a purchase.”

Get straight to the point with your text messages. You can test different formats to see what works best for your audience, but be concise. For example, do your customers like emojis? Do they respond well when you include their first name?

Retail SMS marketing campaign types to consider 

Building your SMS subscriber list is one piece of the puzzle. Strategizing on the types of campaigns that you can send is just as important. The objective is to engage with customers and increase sales. 

Here are 11 ways you can do this with SMS marketing: 

1. Welcome series 

As soon as someone subscribes to SMS marketing, send them one or a series of text messages to introduce them to your retail company. Let them know what to expect, tell them where they can find you on social media, and encourage them to visit your website.

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Image: Hydrant’s SMS welcome I received after signing up

Your welcome sequence is also a great place to include a special discount code to say thank you for subscribing.

2. Abandoned cart recovery 

Use SMS to remind shoppers that they left products in their cart. Similar to email marketing, you can set up an automated abandoned cart recovery SMS flow. You can start with one to two text messages, see how this performs, and then iterate based on results. 

“Do switch on automations, specifically the abandoned cart sequence,” says Sherwin. “About 25% of our SMS revenue comes from the abandoned cart sequence. Some of this revenue would likely be caught by an email sequence, but not all.”

3. Reply to buy

Reply-to-buy SMS is a message that gets sent to subscribers providing details about a specific product. They can easily reply to the message by saying “Yes” or “Buy” to make a purchase. 

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Image: A reply to buy text message I received from Handheld Handmade

This approach makes it easy for customers to say yes and can build brand loyalty. It also introduces shoppers to new products that they may not have noticed before. 

You can test one-time reply-to-buy SMS campaigns first. If they’re a success, build out your reply-to-buy SMS marketing strategy with automated workflows that get triggered based on customer behavior. 

This way, you can ensure each customer or segment gets a personalized reply-to-buy text message.

4. Customer service 

Integrate your SMS marketing platform with your customer service software to develop a two-way text messaging conversation with your customers. 

Customer service doesn’t only have to entail answering questions. You can also use it to let your loyal or VIP customers know about new products or special offers. 

5. Event promotion

Use SMS marketing to spread the word about an upcoming pop-up or online event. Retail SMS marketing for events can be especially effective for time-sensitive messaging. Be sure to include a clear CTA so subscribers can sign up or add the event to their calendar.

6. Back in stock 

Due to higher open rates, SMS is a great place to announce when items are back in stock. You can personalize and segment campaigns and send them to customers who opted in for back-in-stock notifications. You can also send back-in-stock text messages to customers who have bought similar products in the past. 

7. New arrivals 

Send exclusive announcements for new products specifically to SMS subscribers so they can shop before items sell out. This can help build brand loyalty and increase sales on new inventory. 

8. Special offers and discounts

Create SMS campaigns that include an image of one product, also known as MMS (SMS with pictures). And include a special offer or discount to encourage customers to buy now. Use this approach for flash sales or to move excess inventory. 

9. Loyalty programs 

Use SMS marketing to send personalized messages to your loyal customers. You can segment your loyalty program members and send product-specific information based on what they’ve purchased in the past. 

Address VIP customers by their first name and share new products and updates with them before the rest of your customer base. 

10. Birthday notifications 

If you have a customer’s date of birth, you can use SMS marketing to send a short “Happy Birthday” message on their special day. Include a discount to encourage them to treat themselves. 

11. Product reviews

84% of shoppers trust online reviews as much as a personal recommendation. And, according to Yotpo, SMS review requests see a 66% higher conversion rate compared to reviews requested via email.

Set up automated SMS flows that get sent to customers a few weeks after their order is delivered. 

You can personalize the message asking them to leave you a review for the product they recently purchased. Include a direct link to the product page to make the process easier.

Put your retail SMS marketing into action

There’s only one way to measure if SMS marketing will work for your retail business—test it out on your audience! 

Make sure you’re TCPA and CTIA compliant, keep your messages short and sweet, and collect email addresses via your SMS opt-in form. This way, you’ll be able to keep in touch with people who unsubscribe from SMS campaigns. 

Pay close attention to performance metrics and iterate with each campaign to leverage this highly effective marketing channel.

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