Unfold the Mystery of Envelopes
Envelopes are preferred stock in a technology-driven world.
Our futuristic, paperless society really likes paper. While we have all benefited from technology, people haven't begun getting rid of their mailboxes, so envelopes are a long way from being obsolete," said Steve Brocker, vice president of sales and marketing at Western States Envelope and Label, Butler, Wis.
Brocker said that a recent report published by the Envelope Manufacturers Association (EMA), Alexandria, Va., indicates that envelope consumption was down 2.4 percent in units in 2002 due to a declining economy and the aftermath of events following Sept. 11, 2001, and the subsequent Anthrax scare.
The report also showed that in 2003, units were up 3.1 percent. "This was attributed to an improving economy and the realization by marketers that direct mail is the most effective way to communicate with a targeted audience," Brocker explained.
With the upsurge in conveniences such as e-mail, the Internet and automated services, the envelope industry has undoubtedly suffered some losses. Said Brocker, "Technology in the form of the Internet, e-mail and electronic bill payment had minimal effects on the envelope industry. Electronic bill payment has negatively affected transactional mail by a small percentage in units, and e-mail has had a negligible effect on envelope units, replacing some first-class mail."
Despite these showings, Brocker pointed out that a recent survey conducted for the cable TV industry found that 70 percent of adults prefer to receive advertising by mail, as opposed to 5 percent choosing e-mail and 1 percent preferring telephone.
Ron Pollock, associate marketing development manager at Wisco Envelope, Tullahoma, Tenn., said that new telemarketing restrictions established by the National Do Not Call Registry could positively affect the future of direct mail.
You've Got Mail
New technology inevitably breeds change. Brocker said that the envelope industry is evolving from being product focused to service oriented. "Western States' lead times have shortened, and a storage and fulfillment system has been added to complement our manufacturing capability," he said.
Of the various types of envelopes available, Dan Kimball, plant manager at B&W Press, Georgetown, Mass., said that his company manufactures in-line finished direct response envelopes. "When it comes to fundraising, our direct response mailers seem to be very efficient. Clients tell us that the mailers generally pull a good response and help keep their bottom lines in perspective," he said.
Pollock said that commercial envelopes remain a favorite because "they fit the everyday needs for business and private consumers."
Manufacturers agreed that quality, product knowledge and company reputation is of utmost importance when envelope shopping. "End-users should look for knowledgeable, reliable suppliers who have a proven track record," Brocker advised.
Kimball said that "using an in-line supplier with capabilities to personalize the product on its inside and outside provides a low-cost advantage when the process is combined in one machine step."
When asked if increased postal rates have affected the envelope industry, manufacturers admit that there has been some effect.
"Historically, the year of a rate increase causes a decline in envelope consumption. The year following a rate increase, units return to pre-increase levels, and the following year, units increase," explained Brocker. He said that the current pattern of increasing all rate classes at roughly the same time will be evaluated by the new President's Commission on the United States Postal Service initiative.
Kimball said that increased postal rates have caused some direct marketers to seek lower-cost alternatives. "We have seen an increase in the use of package inserts that allow the marketer's message to be carried to the consumer at a considerably reduced cost," he said.
New Ideas
When it comes to new products and trends, envelope manufactures say the possibilities are endless.
Pollock said that items that were once custom made have become stock items due to demand. In addition, Brocker said that the general usage of high-strength products—such as Tyvek, Dura-Print and Fiber-Tuff—in larger envelopes is a popular industry trend.
Anything that's worth something doesn't come easily—much like manufacturing envelopes. "The increasing automation of the United States Postal Service requires manufacturers to produce imaged products that meet tighter guidelines for high-speed sorting of mail," said Kimball.
For Wisco Envelope, Pollock said that challenges involve keeping manufacturing costs low, coupled with the electronic transfer of documents and data, which tend to decrease envelope usage.
Inside Info
To ensure that distributors have the best possible information to successfully sell envel-
opes, manufacturers were eager to share their thoughts.
"Many of today's customers are seeking a full-service supplier. It is important to provide the client with one-stop shopping," said Kimball. "The client is looking for a supplier with the expertise to take the project from start to finish. Distributors need vendors they can trust to manage the process professionally."
Brocker advised distributors to be aware of postal considerations, especially when automation discounts are sought by the end-user. "The United States Postal Service is now using MERLIN [Mail Evaluation Readability Lookup INstrument] technology to verify eligibility for postal discounts by measuring most of the characteristics of a mail piece," he said. "The monetary penalty for failure to achieve an automation discount because of an oversight will far exceed the cost of the envelopes, in most cases."
Looking Ahead
In a 2002 survey, the EMA reported that the envelope industry will experience a modest 1 percent to 1.5 percent annual increase in units through 2008. Brocker said that these numbers may be overly conservative, due to the economy at the time of the survey and recent favorable events in direct mail. "Manufacturers who stay on the technical cutting edge while envisioning the future will have tremendous opportunities for growth," he said.
By Cynthia T. Graham