The Rise of Direct Mail Shows Change in the Use of Print

PrintForecast Perspective

August 2006

multipage

The discussion of the increased use of direct mail has been common in recent years, especially as a source of growth for print service providers. This week, we focus on the present state of direct mail cards as tracked by the US Postal Service. The chart (click thumbnail below) shows the change in the weight of items mailed in the US Postal Service through this past March. The line with the upward trend is direct mail presorted post cards; the bottom line is periodicals. This direct mail trend line started to move strongly upward when the economy began its expansion in mid-2003.

Periodicals have not grown at all; while it seems from other data that the number of magazines mailed has increased, their reduced page counts and circulations have netted out to basically zero in terms of total weight that has gone through the postal system. Lighter weight papers, changes in size, are literally, just around the edges. If periodical shipments were to keep up with the economy’s real growth, they should be back up at the 100 line or above. This is not the case, nor is it the long term forecast.

Why is direct mail growing? One of the factors is the growth in the number of small businesses. The latest measure, based on Bureau of Labor Statistics data that we analyze every month, there are now an average of 81,000 net new businesses (births minus closures) every month. Any wonder why Staples has been a solid performer among retailers? Or why Vistaprint continues to grow its business producing supposedly unprofitable specialty items like the most mundane business cards? Or why Staples is investing in its copy shop operations?

At the heart of the rise in direct mail has been the shift to e-commerce. We already have discussed in a prior issue how the rise of e-commerce correlates with very high statistical reliability the decline in commercial printing shipments. Direct mail, however, is being used to stimulate e-commerce use. On one hand, magazine advertising, catalog printing, and other print products have been negatively affected by the e-commerce growth. Yet, direct mail offers a reliable way to cut through communications clutter and get into peoples’ homes for what the USPS has described as “the mail moment.”

The global consulting firm McKinsey has recently reported that there is a shortage of advertising opportunities in electronic media. Advertisers cannot find enough reliable properties at this time on which to place their banner ads or in other e-media formats. E-marketing campaigns are still hindered by deliverability issues. These will change, of course. But there is no shortage of direct mail applications, and there won’t be for some time, representing a continued, significant opportunity for print service providers. Direct mail does not have to be complex. A well-designed post card alone with a compelling offer encourages recipients to remember a brand or to visit a web site. Print has always been about creating conditions for action. With that in mind, we need to do put ideas for action in clients, and our own, minds.

• MORE ON
• MAILING/POSTAL