Square’s expansion into email marketing seemed like a surprise move for the company best known for its mobile point-of-sale system for small businesses.

Upon closer analysis, however, it’s a natural next step for the company, and one that reinforces the importance of data-driven retention marketing for all businesses, not just within e-commerce.

Historically, email marketing is tough for local businesses with physical storefronts. Small business owners run cafés, boutiques, restaurants, yoga studios, and much more; their primary focus is on day-to-day operations, not technology partners or building complex digital marketing strategies.

At the same time, it’s crucial for small businesses to use the channels available to them to encourage repeat business. While some restaurants (mostly chains) have robust email marketing programs in place, small merchants have largely struggled to find a sophisticated way to reengage existing customers. Getting in on the email marketing game can pay off in a big way—most e-commerce businesses can still attribute up to 45% of their revenue to email.

What’s more, Square’s offering brings data-driven intelligence to merchants that don’t have access to the kinds of information e-commerce companies collect on the daily. As a point-of-sale platform, Square can incorporate the data their system collects, including transactions and frequency of visits,  to help merchants better identify their high-value customers.

It might be puzzling why so much attention is being given to Square’s product launch, given that email marketing is well established by this point. Wouldn’t it be more helpful to introduce capabilities for marketing channels that are considered “hot,” like social media or mobile advertising? Although there’s lots of noise surrounding these newer platforms, email marketing is still the most effective marketing tactic from a revenue generation perspective. According to a 2014 report by Gigaom Research, 56% of marketers still rank email marketing as the most effective strategy.

Think of how often e-commerce businesses send promotional emails or offers. Now Square is giving small businesses easy access to that valuable real estate to notify customers of deals and encourage return visits. Effective email marketing also helps build relationships and brand loyalty with their customers.

Will Square Marketing add value to local businesses? Yes, as long as local merchants embrace the features and fully utilize them. Square’s move underscores the importance of retention marketing, and the effect customer retention has on the bottom line. Even in this unprecedented age of information, small businesses still struggle to understand their current customers. Square’s move helps bring data-driven marketing to businesses outside e-commerce, which is a win for all parties involved.

Jerry Jao is CEO of Retention Science, a marketing company.