Direct Mail--Enough Elbow Room, Growth?
"We get a lot of mixed messages from our major customers," McNamara points out. "Some businesses are doing very well; they will continue being bullish on the health of their businesses and investments, and in making their businesses stronger. For them, 1999 is business as usual. The businesses that are dependent upon their industry segments and diversity of their businesses overseas, are the ones that are experiencing some softness. Even so, we're very optimistic that the industry—marketing and promotional materials—will continue to be one of the fastest-growing print markets (in 1999)."
McNamara isn't alone in his assessment. The Direct Marketing Association, in New York, projected a compound annual growth of 7.6 percent for the consumer category and 10.2 percent for business-to-business between 1997 and 2002, or 8.6 percent overall for that same period. The study also found that growth rates in all direct marketing media exceed the total U.S. growth rates of 5.1 percent for consumer sales and 5.4 percent for business-to-business sales in that same timespan.
Time to Change
Peter Gargano, executive vice president of sales and marketing for Quebecor Direct, saw 1998 as a year of continuing change and challenges for direct mail printers. Acquisitions, he notes, have further consolidated the direct mail printing industry, which paralleled a growing trend among customers to use fewer suppliers capable of providing a wide range of products and services.
Competition, price erosion, reduced production cycles and faster response times, he adds, are the salient challenges printers are facing.
"We believe 1998 will prove to be a good year for Quebecor Direct in two key areas," Gargano points out. "First, our group has seen a significant increase in sales this year, which has solidified our position as a market leader. Secondly, we have made advances concerning our initiative to fully integrate the business units that make up the Quebecor Direct Group. Being a more fully integrated group will allow us to better serve our customers by accessing the many enormous capabilities of our entire network of facilities."