If you’re here, I’m going to assume three things.
First, you’re a DTC owner or marketer. Second, over the last year, growing your business has become more difficult. Third, you’ve heard of ecommerce SMS marketing but — thanks to everything else on your to-do list — haven’t implemented it.
Good news: You’re not alone.
Among the 150k largest Shopify stores, a mere 11.7% have SMS actively installed. Looking at the top 75k, that percentage only creeps up to 13.5%.
Here’s the bad news.
For the top 1,000 stores, SMS marketing skyrockets to 66.7%. And among mainstream online retailers, it’s ubiquitous.
Translation: The biggest of the big are ahead of you.
What do they know that you don’t? Why have high-growth DTC brands adopted SMS so aggressively? How can your business not only “catch up” but repeat the rewards of more new customers, accelerated LTV, and better margins?
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SMS marketing is an owned channel that leverages promotional, transactional, and relational text messaging to grow your ecommerce business.
Executed well, it fuels every stage of the funnel: From increasing onsite conversion rates to acquiring more new customers to retaining the customers you’ve already won.
Like email marketing, subscribers must opt-in to receive SMS. Where social media, paid search, and online advertising operate on “rented” land, you own your SMS list — a valuable asset ready and waiting to be utilized whenever you need it.
What’s more, you control the customer experience; beginning to end.
However, its similarity to email doesn’t limit SMS to loyalty, reorders, and lifetime value (LTV). Nor should the two channels be treated interchangeably.
Often, you’ll hear SMS lumped into a larger marketing approach known as “conversational commerce.” It’s a phrase born to highlight both sides of SMS’s intimacy and efficiency.
While balance matters, fear of over-indexing on the latter — the big, bad s*** word (spam) — holds back most ecommerce brands from truly unleashing the power of SMS.
But, I’m getting ahead of myself.
Technically speaking, text messages come in two forms.
Either form can be used to send promotional, transactional, and relational messages.
Though you might not know it, SMS has been around for over two decades. Despite sounding like a digital dinosaur, its popularity has exploded in recent years.
You don’t need a chart to tell you we live, work, and shop in a mobile-first world. Expecting everything to be available at the touch of a button.
This puts big pressure on businesses but also presents a greenfield of opportunity.
At a global level, revenue generated by application-to-person (A2P) SMS will increase $8.44B over the next five years: from $42.71B in 2022 to $51.15B by 2027. Pile on what’s called “over-the-top” (OTT) messaging — platforms such as WhatsApp, WeChat, Facebook Messenger, etc. — and 2027’s total jumps to $78.21B.
While illustrating SMS’s value, numbers of that magnitude defy easy application. Especially because they reach across industries like banking, travel, healthcare, advertising, and retail.
First, text messages are intimate. Strict opt-in laws ensure your subscribers want to hear from you (and weren’t bought in a list). Plus, texts land in the only inbox that isn’t cluttered with spam.
Second, they’re effective purchase drivers.
That one-two combination weaves itself through a host of data points and at least three reasons that answer the question: Why SMS for ecommerce?
Why SMS for Ecommerce? Reason 1
Reported click-through rates (CTR) on ecommerce SMS vary greatly. Sources swing from 6% on the low end to 35% at the high.
On top of that, some sources list ranges of CTRs — making clarity that much more elusive.
Nonetheless, conservative estimates call striking attention to the channel’s ability to drive action. Coupled with audience segmentation and tailored content, SMS’s relevancy towers above email and social media.
Among all demographics in the US, 69% report interacting regularly with promotional text messages. Only 31% “seldom” or “never” engage. Of those who interact, 51% do so at least once or twice a week; 19% every day.
As for why people choose to engage, offers and discounts are the number one decision influencer (48%); followed closely by “critical information” (44%).
Tied with social media, consumers rank SMS as their second “top preferred” communication channel with businesses. 58% of people rate texts as the best way for businesses to reach them quickly. And, fully 70% of consumers have opted-in to at least one business SMS list.
The Federal Communications Commission (FCC) governs SMS through the TCPA and the CAN-SPAM Act. SMS also has a set of principles called CTIA — guidelines implemented by a wireless communications trade association.
Compliance covers numerous topics, including:
With new privacy safeguards released regularly, getting opt-ins is becoming more challenging. On the other hand, consumers can subscribe and unsubscribe easily. A solid SMS tool will handle the setup and compliance for you.
Why SMS for Ecommerce? Reason 2
A good ecommerce marketing strategy uses multiple methods to communicate and send data between apps. SMS marketing should integrate seamlessly, making the channel simple to implement and a quick source of growth for businesses.
There are a few key integrations to look for when selecting your SMS tool.
First, integration with your ecommerce store.
Platform-specific providers are built for a single ecommerce software such as Shopify. Platform-agnostic tools work across multiple backends. While a nice-to-have feature, the value can be diluted versus a platform-specific option.
Second, list capture capabilities.
Even though SMS tools offer subscriber growth features — if you’re already using apps like JustUno, Wheelio, Privy, or OptiMonk — you’ll want to connect to them directly. This lets you grow your lists through multiple methods, optimize your conversion rate, and keep your data syncing automatically.
Third, email integrations.
SMS has strategic value but isn’t a stand-alone channel. Approach email and SMS as best friends rather than pitting them against each other. From dual subscription pop-ups to better segmentation, your SMS and email marketing tools must “play nice” with each other for a multi-channel strategy.
Why SMS for Ecommerce? Reason 3
Of course, none of the other reasons matter if SMS can’t generate results. Given the price of SMS compared to “free” channels like email, sales alone aren’t what matter.
Instead, it’s sales and return on investment.
Much like click-through rates, data varies wildly — not simply between providers but also from the same provider, depending on what page you visit.
Rather than summarize the various figures, I want to be as transparent as I can about the returns and revenue we see inside Recart.
Across all customers, 36.8X is the average ROI — total SMS-attributed revenue divided by total SMS costs. That’s a weighted average factoring in each business’ SMS revenue so that smaller accounts with low billables (but high returns) don’t throw off the number.
Among our top customers, ROI actually drops to 28.2X. Why? Because the larger an ecommerce business, the more channels they operate on.
SMS as a percentage of total revenue is 19% for all customers. For top customers, it’s 29%. Lastly, SMS’s incremental value — the percentage of additional revenue driven by the channel — averages 14% across all customers and 33% for the top.
Unfortunately, finding a suitable comparison is tough. Compared to the degrading efficiency of paid ads, SMS shines. But — while SMS can aid customer acquisition — it can’t go out and get you new customers.
Perhaps a better apples-to-apples is retargeting where the point is to remarket and retarget shoppers who have already visited your site.
More important, however, is the method by which SMS attributes revenue.
You’d think attribution would be clear-cut but it’s oh-so-tricky.
Although 1-day view (receipt) and 30-day click “show” exceptional results, those standards are too low to truly count as incremental revenue. In most cases, they represent customers who would have bought from you anyway.
Instead, we attribute a sale to Recart only when a customer:
Whatever tool you use, be cautious about default attribution windows. Particularly when demoing. If the same list with the same sends and the same offer produces more sales, that’s rarely incremental. It’s over-attribution.
Like other marketing tactics, setting up SMS requires you to define your business goals and target audience needs. That way your strategy will benefit you and your customers. To streamline the process, we’ve outlined five key strategies.
SMS Ecommerce Marketing Strategy 1
A data and research-driven foundation will set you up for long-term success. The first step in creating your strategy combines your business objectives, everything you know about your target audience and customers, as well as your competitor landscape.
There are only three ways to grow a business:
When defining your goals, make those three methods your foundation. Here’s how your objectives for SMS can sprout from each.
You can also set KPIs with specific, metric-based targets for each objective.
Investigate how businesses similar to yours (direct and indirect competitors) leverage SMS. Take note of the kinds of text message campaigns they send and see if you can identify their goals.
Keep an eye on elements like content, how personalized the campaigns are, timing and frequency, and CTA.
Create an ideal journey for consumers who interact with your business. Take into account what you learned in your competitor research and plan campaigns to suit each stage.
Remember that all the steps are unique. You’ll want to send different content during each one. We like to use these buckets. Try them as a basis for yours!
The goal here is to plan the different SMS ecommerce campaigns you need to set up in parallel to keep each stage of your funnel fueled. From awareness to conversion, you need to take every step into account to offer a great customer experience.
There are two important categories to consider:
Identify the value your messages will offer. You’ll need to draft your messages accordingly to encourage your subscriber to take the desired action in your text message. At this point, you should be thinking about themes and structures.
Watch your SMS character limits. One SMS is 160 characters. You can send multiple messages at once, but it will cost more. Special characters and links are also included in the character count; so keep an eye on these.
Here are a few best practices to keep in mind:
The only real way to know what works for your business is to run your SMS marketing campaigns and then make data-driven decisions. So before you hit send, you’ll want to make sure your reporting and analytics are set up properly.
Make sure you’re monitoring:
Using these, you’ll be able to identify your best campaigns and can optimize your strategy to double down on what gets you the best results.
SMS Ecommerce Marketing Strategy 2
There’s no wrong time to start building your subscriber list. But there is a right time. Now! The sooner you grow those lists, the faster you’ll see the impact of your SMS marketing messages.
There are a few ways to do this, from onsite pop-ups to social media links… test them all to discover the most effective strategy.
Kick off your opt-in strategy strong by targeting high-intent visitors at checkout.
Best part? This feature is natively available on Shopify Checkout and takes a few minutes to turn on.
You can also customize your SMS opt-in text. If you click Customize checkbox label, you won’t actually find it. Instead, Shopify buries the option under Themes > Edit languages. Search for SMS and edit the Accept SMS checkbox label.
Activating SMS at checkout takes less than five minutes. Then, those valuable sign-ups can immediately (or, with a short time delay) get sent a post-purchase upsell or downsell via SMS automation.
Below-average list growth eats away at your bottom line. Thankfully, the opposite is equally true — though commonly overlooked.
At 100k visitors per month, a modest lift in opt-ins from 4% to 7% equals 3,000 more people you can sell to every month.
Substantial SMS list growth, leading to substantial SMS sales, come from optimizing three types of pop-ups — each designed to meet visitors natively…
These two off-site subscription tools can boost also materially boost list size (more so if you have a strong social media following or a brick-and-mortar store).
Keyword opt-ins take five minutes to set up and are used successfully in three major ways.
SMS subscription from Instagram Stories and other social platforms create an effortless opt-in, requiring only two actions from a mobile phone:
SMS Ecommerce Marketing Strategy 3
SMS marketing automation helps businesses send campaigns to the right person, at the right time, with the right message.
Triggered by customers’ actions and segmented based on engagement data, automated workflows yield high conversion rates and generate revenue on autopilot.
71% of consumers expect businesses to deliver personalized interactions. And 76% get frustrated when this doesn’t happen.
Segment-based triggers should tailor every automated campaign. These conditional formulas essentially construct any list your brand might need. Some of our favorites include:
Naturally, SMS marketing automation enables you to run multiple text message flows simultaneously without someone having to sit and hit send. It’s a one-time effort (except for the occasional optimization) for your team to set up, save time, and earn revenue on autopilot.
Simultaneously, it reduces errors by fetching data directly from your store. This ensures the right campaigns are sent to the right customers, along with the correct data fields.
For instance, you don’t want to send a first-purchase coupon to an existing customer or a product-specific discount for something they already own. Every little mistake compromises a customer’s experience and may lead to them opting out of your list.
What do I mean by set up (at least) five flows? To win from the jump, here’s exactly what I mean.
Give your subscribers an opt-in journey they won’t forget with a multi-part Welcome Flow.
These welcome messages greet your new subscriber and engage them right away. With conditional splits to exclude anyone who’s made a purchase or has an item in their cart, three–five texts work brilliantly:
These automations are what ecommerce dreams are made of. Simple yet powerful, the goal isn’t to merely re-engage your warmest shoppers… but to seal the deal.
Most ecommerce businesses struggle with cart abandonment, the average rate being as high as 69%.
These high-intent shoppers may only need a timely nudge to convert. Set up a single message for both browse and cart abandoners delayed by one hour (less during major retail holidays). Keep it short, singular, and seductive:
Avoid customer anxiety and customer support requests by keeping your customers up-to-date and informed at every stage with personalized receipts and notifications.
Send transactional updates from separate, non-promotional number:
Use these automated campaigns to make personalized product suggestions and improve customer retention through repeat purchases.
These text message campaigns work through purchase data. So if your customer purchased a swimsuit last week, you can send them a deal for a matching towel.
With replenishment flows, you set time delays post-purchase that will trigger reminder campaigns.
Great for subscription models but also for consumable products as well as beauty (CPGs). If you know a super-food smoothie mix usually lasts about three weeks, set a time delay for two weeks and remind your customers that they’ll likely need to place an order soon.
SMS Ecommerce Marketing Strategy 4
Sending SMS campaigns may make business owners a little spam-scared. But the reality is, subscribers love tactical text message campaigns. They usually contain fun content and have the best deals. You’ll quickly see the proof in your results and revenue.
These campaigns usually have a follow-up SMS but can also have multiple campaigns per day during big sale periods like Black Friday.
Create campaigns and sales around big holiday periods:
Pick moments your customers care about — from trends to news, pop culture to pets. Sending interesting and relevant SMS campaigns will improve your engagement and more importantly make your customers feel considered.
(Think Pumpkin Spice sale. We hate to love it.)
Create special offers based on product availability, end-of-range items, popular categories, or other themes that suit your business goals and that your customers will love.
These clubs are great for retention and are a good way to segment your shoppers and offer unique and special deals or early access to sales. Plus, they create a feeling of exclusivity.
Celebrate new product lines, new colors, or just about anything fresh with your audience. These campaigns are a great way to build hype among non-purchase subscribers as well as to get your existing customers excited about shopping again.
SMS Ecommerce Marketing Strategy 5
Tracking and understanding your SMS data is vital. It lets you properly assess the success of your tool and optimize your campaigns. Here are a few ways ecommerce businesses can track their text marketing performance, moving from manual to automatic.
In short, this sheet would contain an overview of your campaigns and would allow you to manually input important metrics.
Spreadsheets work when you have less than 1,000 subscribers. The moment your business starts to scale, manually tracking SMS performance becomes more prone to errors, and you will never be able to identify the “why” behind the results.
You’ll be able to see data on how visitors from your SMS links engage with your website, how long they spend on your website, and whether they drop off or convert.
Useful overall given its broader view, Google Analytics doesn’t offer theengagement data you need to optimize your future campaigns.
The best way to track SMS performance is through your SMS marketing platform. It should have a built-in insights dashboard where you can view the results of each campaign.
You’ll want key metrics so if you’re in the market for an SMS tool, look for the following:
What do the biggest, fastest-growing DTC brands using SMS marketing know that you don’t? After this guide. Not much.
You’ve unlocked the what, why, and how of the most intimate form of B2C communication that’s simultaneously the most effective purchase mechanism at your disposal.
But one final question remains: When?
If you’re waiting for the perfect moment to leverage SMS, you may be waiting a while.
Not because it isn’t a powerful channel to grow your ecommerce business. It is. Executed well, SMS fuels every part of your funnel:
Still, there likely won’t be an “ah-ha” moment with SMS. Not until you’ve sent your first (good) campaign and experience the results yourself.
Grab the full guide. Put it into action.
Recart is a one-stop-shop solution for setting up targeted, highly engaging two-way message campaigns. SMS accounts are also fully managed — from subscriber growth to set up to sending to optimization — our team does it for you.
Get your SMS Marketing guide to boost revenue and improve retention.