The Slow Decline of Email & SMS

Three moves to replace lost inbox reach.

Pietro Saccomani
August 14, 2025

Inbox ROI is quietly decaying.

Since last year’s sender-rules shift, many lists are down a couple of points MoM on opens and CTRs. That compounds fast.

SMS is affected too; with stricter compliance thresholds and new inbox filtering features sapping your visibility and reach.

These channels won’t go away tomorrow. But there’s a slow drain happening.

The temperature is rising (slowly)

Maybe you’re familiar with the “burning frog” analogy.

If you put a frog in boiling water, it will immediately try to jump out.
But if you place it in cold water and slowly heat it up, the frog doesn’t notice the gradual change in temperature and will stay put until it’s boiled alive.

It’s the perfect way to describe email & SMS.

You don’t notice the declining performance, because it’s not a dramatic shift.

You see a tiny monthly decay: a 2% MoM slide in open rates, slightly lower ROI.

The thing is, this compounds.

It leaves you ~22% down in a year; 3% MoM cuts you roughly in half in two years.

This is not a eulogy.

This is a guide on how to adjust your strategy so that, in two years’ time, you’re not stuck trying to milk dollars out of your email list with 5% open rates.

Why this matters now

Here’s a summary of the current state of play.

Bulk-sender rules from Gmail/Yahoo are over a year old now, and we’re seeing the impact.
Gmail is making it easier to unsubscribe. And Google Shopping ads in the promotion tabs are giving you another thing to contend with for visibility.
Increasing SMS regulations are slowly tightening the reins on what brands can do:
- New regulations for marketing messages in Texas go live from September 1 (registration + $10K deposit/annual bond required).
- It’s already off the table in some industries (Cannabis/CBD) - and health-adjacent industries are becoming more stringent (watch out supplements).
- In the U.S., carriers limit to one message per cart event, and recipients must explicitly agree to receiving abandoned cart reminders. This limits the effectiveness of the #1 low-hanging fruit revenue driver in direct channels.
SMS is trending towards email-like filtering. iOS is introducing secondary inboxes for marketing messages.
SMS was most effective when it was known as a more “personal” channel. Once it gets the same reputation as a marketing channel as email, we’ll see commercial messages filtered out a lot easier.
BFCM is coming up. As I wrote about last week, classic channels are extremely saturated at this time. Your customer’s promotional inbox is full by 9.15am on Friday, and everyone’s sending SMS messages.

What to do about it

Despite everything I wrote above, email and SMS are not dead.

Dying? Maybe, but very slowly.

For now, they’re still producing a positive return on investment — each dollar you put in should send more than a dollar back.

Monitor your ROI, optimize your flows and segment your lists; just as you’re doing now. Just be careful about becoming over-reliant on email & SMS, when the tea leaves are clearly pointing downwards.

The idea is to start building alternative channels before you have no other choice but to pivot away from email & SMS.

Turn on push

Native push notifications are the best supplement to email & SMS.

They’re free to send. Delivered instantly, straight to the lock screen. And you’re not competing in crowded inboxes or getting sent to spam.

Push is direct like SMS, but separate from personal messages, which is important.

It’s less intrusive this way. You’re less likely to irritate your customers by messaging them regularly.

Push is not not an alternative to email and SMS. The audiences don’t fully overlap (app users vs a mix of existing customers and potential customers).

But as a supplement, it’s a powerful complementary piece that makes your overall messaging funnel stronger.

How to unlock push

The biggest barrier to success with push is availability. You can only send it to app users, who have opted in to push.

That means three steps to unlocking this as a high-performance direct marketing channel.

Having an app (only around 4% of successful Shopify stores even have an app right now)
Getting app downloads (this will typically be limited to engaged, repeat buyers)
Push opt-ins (users need to opt in to receiving push. Average opt-in rates vary from 60-80%)

Your job? Get past these barriers.

Launch an app for your customers (if you haven’t already)
Make a drive to get downloads: advertise the app on your website, run app-exclusive promos and show customers why they should get the app
Put the work into optimizing your opt-in rate. Give users a reason to keep push on — surprise deals, fun messages that they enjoy receiving. And make it clear that they’ll get value via push. Make sure users feel the FOMO if they have push disabled.

Yes, it’s more work to unlock. But that work is your moat.

It’s why push isn’t saturated like email & SMS, and why it gives you a closer and more effective connection with your subscribers.

Once you’ve built up the channel, start experimenting.

There are so many ways to use push - for new product drops, flash sales, or just general awareness messages.

Transactional push notifications are the low-hanging fruit. It’s the best channel for automated messages like shipping notifications and abandoned cart reminders.

If you want to know where to start, our guide shows you 250+ real examples from 40+ brands — as well as everything else you need to know about how to craft your push strategy.

Other channels

While you’re unlocking push, it’s also worth playing in some other sandboxes.

WhatsApp is already a staple in Europe and Latin America and is slowly carving out space in the U.S.

For the right audience, it’s a direct, high-engagement pipe that’s solid for transactional updates, reorders, and quick back-and-forth with customers.

Direct mail might not be flashy, but it’s still underused in ecom. A well-timed postcard or catalog to a high-value segment can stand out, especially with customers who feel the fatigue with digital channels.

You might think about Web push. You can try it if you’re feeling experimental, but temper your expectations. Opt-in rates are low, engagement is lower, and in many cases the interruption of asking for permission can do more harm to your site experience than the channel’s worth.

Finally, you’ll see a lot of hype soon about RCS, the “SMS 2.0”. It’s richer, more visual, and iOS 18 finally supports it, but in terms of reach, deliverability, regulations, it’s not really any different from regular SMS. Play around with it as coverage expands, but don’t treat it as a “new” channel.

Summing Up

Email and SMS are still worth the spend. But the slow decay is real.

Deliverability rules are stricter, visibility is harder, and SMS is on the same trajectory email has been on for years.

The smart move is to squeeze the most from email and SMS while you still can, and use this window to build out the next layer of your retention stack.

Push is the best addition to your stack. Free reach, instant delivery, and far less saturated. Think of it as the tool that plugs the holes starting to appear in your current workflow.

Whether it’s using push to win BFCM, or slowly build stronger retention, loyalty and LTV, the potential of the channel is clear.

Remember, email and SMS are honest workers for now. But don’t be the boiling frog. Start branching out now.

Quick Hits

There was a lot going on in ecom this past week. Here’s what you need to pay attention to.

Shopify - AI Agents

Shopify is going all-in on AI. That’s perhaps a sign you should, too.

They just announced several new features enabling stores to build commerce-capable AI agents.

All the tea leaves are pointing towards AI-native shopping arriving sooner than later. Prepare accordingly.

Zuck Predicts “Superintelligence”

Shopify’s not alone in this. All the biggest names in tech are major believers in AI.

Mark Zuckerberg just announced Meta’s goal to enable “personal superintelligence”, in the form of a wearable, always-on AI assistant. And they’re willing to spend big to make it happen.

What ChatGPT Checkout Means for Merchants

This interesting read at Modern Retail (via Digiday) examines what the prospect of checkout functionality in LLMs like ChatGPT really means for brands.

This quote just about sums it up: “It fundamentally changes what it means to be an e-commerce brand. We can’t be thinking of ChatGPT or other AI models just as search engines. Now, we have to be thinking about them as storefronts.”

Shopify’s Revenue Up 31% in Q2

So much for rough times in ecommerce. Shopify, at least, isn’t feeling the crunch.

They did $87 billion in GMV over Q2 (up from $67 billion for the same period last year), and $2.68 billion in revenue — up 31%.

This strong outlook drove a significant 21% surge in the company’s share price last week.

Spending Up: But Also CAC

Data from The DTC Index gives us a good picture of the state of ecom right now.

On the positive side, revenue is up over the last 28 days (YoY), a solid 5.87%. New customer revenue is up 2.92%. AOV is also up.

On the other hand, CACs are up 5.99%. Median MER is down 9.46%.

In summary, people are still buying, but the cost to get in front of them is going up.

This just widens the competitive advantage for brands with dependable owned traffic sources, good retention and stable margins.

US Retail Sales Up in July

The CNBC/NRF Retail Monitor shows similar bullish signs for the industry, with core retail sales in July up 1.55% Month over Month, and up 5.93% Year over Year.

This comes after a decrease in June, and brings numbers for the entire year to date up to an increase of roughly 5% YoY.

Updated Tariffs

If you’re having trouble keeping track of tariff mania, this will help.

Newsweek has an interactive map of updated tariff rates by country.

China currently sits at 30%, while India and Brazil have been hit with significant 50% tariffs.

Worth a bookmark.

Is the PDP an Endangered Species?

Some feel the PDP will be extinct within the next two years.

The traditional shopping experience is changing. We don’t scroll, dwell, read and decide like we used to. And that’s going to change even more with AI.

Soon, brands still optimizing for on-site conversions the way we have been for the last decade may be left holding the bag.

What do you think? Is there a fundamental shift coming? Is it already here?

200 Yotpo Staff Laid Off

All over the news, still, is Yotpo shutting down their email & SMS products.

Reports say approximately 200 staff around the world are affected by this — meaning there are a lot of talented people now available, for anyone looking to hire.

Yotpo Email & SMS Alternatives

Need to migrate your email & SMS to a new platform? We’ve got you covered.

We listed all the alternatives to consider — from all-in-one platforms, to dedicated email/SMS, to alternative direct marketing channels to add to the mix.

That’s all for now.

I’ll be back in touch next week, with more on how successful brands are doing CX and retention right.

If there’s any topic you’d like to see us dive into, for either the newsletter or the podcast, just shoot me a message here.

Until next time,

Pietro and The Retention Edge Team

PS: want to boost retention, revenue and profitability? If so, launching your own app could be the best move you make this year.

See how: go to our website to get a preview of your app for free, or shoot me a DM on LinkedIn to talk about it.