Direct mail drop doesn't tell the whole story
We've all heard the staggering numbers on the precipitous drop in direct mail, but let me remind you: There were 35 billion fewer pieces of mail in the system in 2009 compared with 2007's tally. It is in part why the US Postal Service, which reported an almost $2 billion shortfall in the first half of its fiscal 2010, is considering doing away with Saturday delivery. The Government Accountability Office calls the quasi-government agency "not viable" as a business and recommends jobs cuts and outsourcing for starters.
What, or who, can fix the post office when even postal reform three years ago — the first in 30 years — didn't even make a dent? There are no simple answers, and the fluctuations of mail volume, even as it continues to head south, is obviously only one part of a complex problem that involves a flawed business model, labor relations and local and national politics.
DMNews examines the topic of direct mail and postal matters in this issue. Our Gloves Off department features two marketers facing off over the provocative question, "Is direct mail on its deathbed?" Our main feature highlights three companies - Frederick's of Hollywood, SimplySoles and Sprint - for whom direct mail is very much alive and well. However, these marketers have had to adapt to the new "frugal consumer" mindset by offering value beyond simple price promotions.
They also stress relevance. Joy Schwartz, co-president at Euro RSCG Chicago, told us that one of the good outcomes of the recession is an increased focus on value and relevancy in direct marketers' communications."
That word, "relevant," keeps cropping up among marketers. In a recent conversation I had with Ernan Roman, president of Ernan Roman Direct Marketing, he said he found that highly personalized direct mail for specific communications — crafted by listening to customers and their preferences — has been pulling 10% response for some of his clients.
It's clear that like television commercials, direct mail may be suffering from its traditional dusty legacy (and high price!), but it is not going away any time soon.
In this issue, we also feature a Q&A with the deputy postmaster general of the USPS, Patrick Donahoe, who spoke with us about some of these important issues challenging the agency today.
For counterpoint, American Catalog Mailers Association executive director Hamilton Davison calls the five-day delivery proposal "regrettable," and laments the effect postal rate increases have on mail volume within the catalog industry. He says, "Our estimate is that since the large [rate] increase in 2007, there's been more than a 35% reduction in catalog volume."