Abandoning the mail

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Abandoning the mail
Abandoning the mail

The threat of financial doomsday scenarios at the US Postal Service, coupled with advancements that make customer communications possible in an instant, are forcing marketers to prepare for a day when the US Mail is a far smaller piece of their business plans.

Even after the Postal Regulatory Commission struck down the Postal Service's recent attempt to raise rates far beyond the rate of inflation, marketers are planning for possible future rate increases, a drop in home delivery to five days per week and fewer Post Office branches, as well as the very real possibility that the USPS could run out of money next year. In a strategy that also helps them communicate with consumers more quickly, brands are increasing spending on digital platforms that are independent from the postal network. 

Plow & Hearth, a multichannel retailer that launched in 1980 as a country store, began reducing its marketing dependence on USPS three years ago, after significant rate increases. The move was also driven by customers migrating to online retail, says David Hay, VP of marketing at the multichannel retailer, which has catalog, bricks-and-mortar retail and Internet sales arms. 

“We are reappraising our reliance on catalogs as our main marketing vehicle, and we are developing a multi-year plan to reduce our spending on catalogs in relation to other media,” he says. “We see catalogs as still having relevance to our business, but being a smaller part of the mix than they are now. There are instances where catalogs will continue to be effective, but that proportion is growing smaller and smaller and every day, and that's a big driver for our move. But we have no active plans to phase them out.” 

Interview: Ruth Goldway



Ruth Goldway, chairman of the Postal Regulatory Commission, sheds light on USPS's current challenges

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The move to digital marketing platforms is not limited to catalogs. Although corporate promotion of online payment methods is nothing new, marketers are now enticing customers to move to e-payment with sweepstakes and other incentives. Verizon launched the “Great Paper Escape” sweepstakes and marketing campaign this year with the goal of convincing a quarter-million consumers to enroll in online billing. The telecommunications company also launched a mobile payment service in the US with m-commerce firm Danal this spring.

More dynamic customer service is mostly driving Verizon's move to digital communications methods, but Internet payment also costs the company significantly less money than sending traditional paper bills to millions of consumers each month, says Mark Studness, director of e-commerce at Verizon. 

“More and more, customers want to interact with us online, and people prefer to interact with us 24-7, where they can move at the pace they want and can browse information, get feedback and comparisons, watch video and testimonials. Our mission is to meet that demand,” he says. “Digital interactions are often more economical for us as well, so there is definitely a cost advantage for us to send paperless bills.”

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