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Is Mail Dead?




by:
David P. Hendel
Husch Blackwell LLP - Washington Office

 
April 10, 2014

Previously published on April 3, 2014

Is mail dead? Let’s ask Google, the ubiquitous source of all things online. This should be a lay-up on the home court of those who would say yes. And guess what. The top ten results for a Google search of “Is mail dead?” produces seven articles on why e-mail is dead, two unrelated articles, and one article on why direct mail is not dead. Dig down for another ten results and you get about the same result - more articles on why email is dead and a few on why direct mail or “snail mail” isn’t dead.

At the National Postal Forum last month, a postal official responsible for large customer accounts noted that a while back, Circuit City was his 26th largest customer. Circuit City is now defunct. But if we asked people 15 years ago to predict whether USPS or Circuit City would still be around today, I don’t think many people would have picked the Postal Service.

Don’t get me wrong - mail has definitely changed. There’s much less First-Class Mail than before, and less total volume than before. But here’s what I learned about why mail is not dead and not going away any time soon. No company is forced to use the mailbox as an advertising medium and there are strong competitors for most package services. But Standard Mail volume for the first quarter of Fiscal Year 2014 is the same as last year, and Shipping Services & Packages volume increased by 14 percent.

I’m reminded of what I heard at past National Postal Forums, when the digital revolution was taking off. Back then, in the 1990s and early 2000s, mail volume continued to grow steadily each year (the high point was reached in 2006), but notwithstanding this growth, the postal industry worried that it would become a dinosaur. A speaker at one of those Forums noted that after the telephone was invented and grew popular, the mailing industry similarly feared it was done for, but telephone companies later became the Postal Service’s biggest customers.

Unfortunately, that type of mail - bill presentment and payment - is declining and will continue to decline. While the movement of bill payment to online methods is inexorable, the Postal Service is taking a stand on bill presentment. At this year’s Forum, the Postmaster General noted some initial studies showing that online bill presentment is fraught with problems that make it less economical than using the mail. For example, the typical digital method of bill presentment starts with an email from the biller advising the customer that its invoice is ready to be viewed on its website. Many customers ignore this email notice, often resulting in missed payments, late charges, and irritated customers contacting the biller’s call center. If a customer does want to view its invoice, it has to log on to the biller’s website. This is an additional step and inconvenience, and many customers will not remember their ID or password, resulting in more inconvenience and additional call center activity. These difficulties have resulted in some companies experiencing a quadrupling of call center usage by electronic presentment customers compared to customers who receive statements in the mail.

The primary reason that mail will not die is that it still works. For example, the overall average response rate for a direct mail campaign is about 3 percent. While that might sound low, think about what the response rate is for each person who views a television commercial or an online ad. Are three percent of the viewers of those ads going to buy the product? And this figure jumps to at least nine percent in response to a precisely targeted direct mail campaign.

Consumers also prefer print. According to a poll conducted by the Chief Marketing Officer Council, 73% of consumers would opt for more traditional mail if promised less environmental impact. According to a Print With Purpose Survey and Report, 80% of people read or skim direct mail, and 38% find direct mail interesting. How many people find online advertising interesting? Also, 82% of people like getting catalogs in the mail from stores they patronize and 70% have renewed a relationship with a company as a result of receiving direct mail. That’s why professional marketers have concluded that a direct mail campaign combined with the Internet is more effective than either medium alone.

And it’s not just for old-timers, either. Most everyone prefers the physical over the digital. According to a study by JWTIntelligence, pick any age group you want and about 80% will agree that “physical cards/letters make me feel more connected to people than digital notes (emails, SMS, etc.).” Over three-quarters will agree that “it’s nice to give a physical book, movie or album rather than an e-version, even if the person has an e-reader or MP3 player.”

While mail is old school, it’s also new school. Advertising mail is commonly being designed to be used in conjunction with tablets and smartphones. We’ve all seen the special codes that, when scanned by the recipient’s smartphone camera, will bring up a customized webpage with more information. And now, smartphone applications can convert your mail piece into an “augmented reality” experience. Aim your phone’s camera at a photo in a catalog you received in the mail, and the photo of, say, a desk, now appears in 3D, or as part of your living room.

The Postal Service has its financial problems - severe ones - but these are fixable by the passage of some sensible legislation in Congress. Circuit City is dead, but mail isn’t and needn’t be. The Postal Service can have a promising future if set on the right course by our political leaders.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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David P. Hendel
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Government
 
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