Consumer Mail in Plastic Bags: Bonanza or Disaster?

The U.S. Postal Service is working on a program that could seriously reduce response rates for direct mail. I am talking about Delivery Point Packaging, its plan to automatically package or unitize consumer mail so carriers would deliver one package per household. DPP, which is in the research and development stage, is part of the Corporate Automation Plan being pursued by the USPS.

The consumer’s package could include Standard, Periodical and First-Class mail. It would be up to the recipient to open the package, or break the band, to access the mail.

Considerable savings could be achieved at the postal facility, where manual casing of the mail would become almost obsolete. Further, because the carrier no longer would have to “finger” the mail at the curb or delivery box to find the delivery breaks, considerable time would be saved on the route, letting a single carrier handle many more mail stops. Postal officials are likely to decide on the program by the end of the year.

The potential cost savings to the postal service, and to mailers, is considerable. But the question has been asked, “What impact will placing the day’s mail in a plastic bag, or other packaging, have on the way that consumers handle and respond to their mail?” I raised it myself after reflecting on how I handle the Sunday supplements delivered to my home by the newspaper carrier.

The ad supplements arrive at the end of the walk in a clear plastic bag. My dog likes the bag because it makes it easier for him to fetch the paper and the supplements – on Sunday it takes him two trips, to retrieve two bags. And I like the Sunday supplements bag because I can reach into it and extract the TV listings book and the magazine – and then use the bag as a handy conveyance for the rest of the material for its trip to the recycling pile. I feel some guilt, I must admit, for ignoring the fine ad copy and offers in the supplements.

While perhaps not taking it to the same extreme, I think millions of others also never get to the bulk of the material in that convenient bag. When I learned that the USPS plans to package mail in a similar manner, I felt panic. After all, I represent an association of mailing and fulfillment companies and their suppliers, whose success depends on consumers and businesses paying attention to the individual mail pieces our member companies prepare. Though our members support efforts to reduce processing and delivery costs, we don’t want it done at the expense of the direct mail medium itself.

In a bagged-mail environment, what if one in five consumers adopts the practice of reaching into the bag to extract only the First-Class mail? How would this affect response rates? If response rates fall, how would this affect companies trying to decide how best to spend their advertising funds? If fundraising were to dip seriously, would nonprofits redirect their efforts to other media? What if even more consumers – say two in five – begin ignoring most of their Standard mail? And how many First-Class invoices in the bag will be overlooked?

Mailers have made the case to the USPS that these questions should be answered before hundreds of millions of dollars are invested in hardware designed to package daily mail. DPP’s potential cost benefits could pale compared with the potential losses from plummeting response rates and the resulting reductions in mail volume.

But the postal service has a long tradition of being an operations-focused organization. Finding support from its engineering department and an array of willing hardware vendors, it is difficult to stop, or even slow, an equipment program once it gets rolling. However, the USPS did hear the questions raised by mailers and did initiate marketing research, some of which is taking place now.

But the research is 100 percent dependent on what consumers say they will do with their mail. In focus groups, consumers have been encouraged to discuss their feelings and intentions relative to mail. The USPS has refused to conduct live market tests to see how consumers actually would handle their mail when confronted with a plastic bag.

Unlike professional marketers outside the postal service, who carefully test in the market the consumer’s acceptance of envelope size, shape, design, exterior message and every other variable that affects consumer response, the USPS has indicated it will be content with what consumers say they will do.

To its credit, the postal service has shared its research plan with interested mailing industry members. The USPS explains that the focus groups are considered the “qualitative” phase. Next will be the “quantitative” phase, which will simply assign quantities to the stated intentions of the participants, i.e., what percentage say they will do this with their mail and what percentage say that.

But are the postal service and the direct mail community ready to pin their future on the stated intentions of a roomful of focus group participants eager to please? In an effort to reduce costs, are we in danger of throwing the baby (direct mail effectiveness) out with the bath water (avoidable carrier costs)?

Some of the postal service’s large and sophisticated customers who use ad mail must demand that the necessary live market research be done before a commitment to DPP is made. These companies would have the resources to help the USPS do live market testing that would provide the certainty needed for such a serious change to mail delivery. They could segment their mailing lists into panels for the purpose of comparing recipient response rates between those who receive their mail in plastic bags and those who don’t.

With an adequate array of mailers involved, the postal service could address the response rate questions in a reasoned, objective way. If there is no deterioration in response, the USPS could proceed, confident that mailers and the postal service could look forward to reduced delivery costs, without delivering a crippling blow to the effectiveness of direct mail.

Those who depend on direct mail must act now to protect the medium. They should demand that the USPS fully test how packaged mail affects response rates. Without the certainty of live market tests, we risk the world’s most effective ad medium. n

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