The United Postal Service, trying to stem the tide of financial losses, has proposed a 5-day delivery schedule. Elimination of Saturday delivery each week would save between $2 billion and $3.5 billion dollars according to different studies. Opponents of eliminating Saturday delivery cite among their arguments that it would hurt direct marketers that rely on the Postal Service to reach their customers. The reality is that direct marketers have cut back on their use of mail as a communications channel. Direct mail volume dropped by 9 billion pieces in 2009 to 202 billion pieces.
The reduction in direct mail volume has been impacted in the short term by the recession. A long term change is that marketers are using more channels to reach their audiences, namely e-mail and social media. Eliminating one day of mail delivery will do no more harm to direct marketers than the shift to other media has already inflicted. What will be needed is careful planning to time the drop of direct mail pieces, particularly when they are time sensitive such as sale catalogs. As Hamilton Davison, president-executive director of the American Catalog Mailers Association, puts it “It doesn’t do any good to have something delivered two days after the sale is over” (no wonder he is the voice of the catalog industry with insightful logic like that… sorry, I could not resist!).
In the final analysis, if marketing mail volume continues to decrease it would not be because of a switch to a 5-day delivery schedule. And, the proposed move would not put USPS at a competitive disadvantage against UPS and FedEx in serving the B2C e-commerce market.
Response Magazine – “Five-Day Postal Week Doable for DR”
The woes of mass media advertising have been well documented. Newspapers, in particular, are scrambling to remain viable to advertisers. Television is facing similar challenges, although to a lesser extent. Now, a third medium could be joining the list: direct mail. Love it or hate it, direct mail has enjoyed a run of 60 years of annual growth in overall spending. That run came to an end in 2008, as a study from the Winterberry Group reports a 3% drop in direct mail spending last year. Furthermore, direct mail spending is predicted to fall another 8% to 9% in 2009.
A series of events have aligned to create a perfect storm for the direct mail industry. First, consumers who are tired of unwanted mail solicitations can minimize them more easily through the Direct Marketing Association’s DMAchoice program. Second, a weak economy has led marketers to pull back on spending, and the relatively high cost of conducting direct mail campaigns make them a target for reduction. Third, at the same time marketers are spending less on direct mail, they are utilizing e-mail marketing more, especially when targeting customers with whom they have existing relationships (and permission to contact via e-mail). Fourth, electronic communications like e-mail are environmentally friendly instead of using natural resources to make envelopes, brochures, and sales letters.
Direct mail will not disappear from our mailboxes altogether anytime soon. But, the era of constant growth in direct mail marketing appears to be over. The capabilities of direct mail to precisely target an audience and measure its effectiveness make it a very useful tool in the IMC toolkit. But, with the emergence of e-mail and search engine advertising as ways to cost effectively reach specific audiences and measure campaign effectiveness, direct mail’s role in marketing programs will likely not be quite as prominent going forward.
Link: eMarketer – “Direct Mail Drop”