2021 State of the Industry Report: The Power of Direct Mail
From a global pandemic to a new administration, the past year was filled with attention-grabbing headlines. For Print+Promo Marketing’s 2021 State of the Industry report, we set out to learn more about the central issues currently affecting the print and promotional products industry, and find answers to questions like: Which vertical markets are poised for recovery and how does that impact the products distributors sell.
As part of our investigation, we reached out to experts in various market segments: printed forms, promotional products, labels, branded apparel and direct mail. Below is an excerpt from our conversation with Mike Parker, chief marketing and solutions officer for IWCO Direct, Chanhassen, Minn. Find out what he had to say about the current state of direct mail, the chances for postal reform and new enhancements.
What are your thoughts on the current state of the direct mail sector?
Mike Parker: People continue to ask and speculate about the future of direct mail. From our perspective, marketers are [making] and will continue to make significant investments in direct mail because it continues to work. Direct mail drives better response rates and higher return on marketing investment (ROMI) than other channels, especially when integrated into a multichannel campaign. Further, we remain confident that this is not a generational issue―recent studies by the USPS Office of Inspector General show millennials value direct mail, with 62% saying they had visited a store in the past month based on information received in the mail. Even as pandemic restrictions are beginning to lift, millions of Americans continue to work from home, and direct mail is proving to be highly valuable in reaching these screen-weary prospective customers in their home.
That said, the direct mail sector is not without its challenges. The USPS service failures experienced by the mailing industry in December and January have shaken marketers’ confidence in the Postal Service. Marketers are also concerned that a potential mid-year postage rate increase will strain marketing budgets, leading to a drop in mail volume. IWCO Direct is heartened by the renewed interest in the Congress to provide the Postal Service with a more sustainable business model. We are also encouraged by the focus the new Biden administration has shown toward ensuring the USPS Board of Governors is fully staffed and engaged in leading the Postal Service to a more stable financial future while maintaining service levels and predictable, affordable postage rates.
Did you see an increase or decrease in certain vertical markets using direct mail last year? How do you think vaccine rollout and the move toward recovery will influence that trend in 2021?
MP: Overall mail volumes were down, but we certainly saw variances of volume trends within industries. For example, health care, multiple system operator (MSO) and nonprofit sectors were up and insurance held steady, while we saw decreases in the financial sector. As the vaccine rolls out and we have some return to normalcy, we will begin to see that effecting consumer behavior, and marketers will respond accordingly. Since the start of the year, we have observed increased activity in the credit card vertical, with an emphasis on hotel co-branded programs as consumers begin to open up to more travel and begin to plan vacations. Our expectation is that volume and spend will continue to grow as the year progresses, again with greater acceleration in key industries.
What types of direct mail enhancements are drawing attention in 2021?
MP: Direct mail works best when it’s integrated into multichannel marketing campaigns. Leveraging information available through the USPS Informed Visibility Mail Tracking and Reporting platform helps integrate mail into the cadence of the overall marketing campaign, allowing email delivery and social media overlays to be effectively timed to support the marketing message in the direct mail piece. We are also seeing more and more clients take advantage of the USPS Informed Delivery product to create additional digital touches to extend their direct mail’s reach.
Marketers are also focused on creating direct mail that engages its recipients and allows them to move seamlessly into compelling digital experiences. Engagement can be driven by tactile elements on the surface of the mailpiece, unique opening devices or full-color personalization throughout the mailpiece, including on the envelope. Many marketers are including QR codes or PURLs in their mailpieces to allow easy access to personalized online resources, with QR codes being especially useful for providing that access directly from recipients’ mobile phones.