COVID-19, POSTS and DIRECT MARKETING

A UPU Direct Marketing Advisory Board (DMAB) report |

A UPU

Direct Marketing

Advisory Board

(DMAB) report

COVID

19,

POSTS and

DIRECT

MARKETING

Published by the Universal Postal Union (UPU)

Berne, Switzerland

Printed in Switzerland by the printing services

of the International Bureau of the UPU

Except as otherwise indicated, the copyright

in this publication is owned by the Universal

Postal Union. Reproduction is authorized for

non-commercial purposes, subject to proper

acknowledgement of the source. This

authorization does not extend to any material

identied in this publication as being the

reproduce such third party materials must be

obtained from the copyright holders concerned.

COORDINATION AND PROJECT

MANAGEMENT:

Olivier Boussard

Directorate of Policy, Regulation

and Markets (DPRM)

Universal Postal Union

PUBLICATION PROJECT

MANAGEMENT:

Abby Bossart

UPU PROJECT INTERN:

Amber Ren

The UPU wishes to thank Jonathan Margulies,

Managing Director, Winterberry Group for his

special contribution (chapter 2 and 3)

DESIGN:

Sonja Denovski, UPU Graphic arts Unit

CONTACT:

Direct Marketing Advisory Board (DMAB)

Abby Bossart

MAIL: abby.bossar[email protected]

TABLE OF CONTENTS

CHAPTER 1 – Posts and

direct marketing: a global view

CHAPTER 2 – How has the COVID-19 pandemic

aected the direct marketing industry?

CHAPTER 3 – Has COVID-19 presented

any opportunities for the reinvention

of direct marketing in the years to come?

CHAPTER 4 – COVID-19 and direct marketing:

the views of postal operators and stakeholders

in the direct marketing value chain

About the Direct Marketing

Advisory Board (DMAB)

A UPU Direct Marketing Advisory Board (DMAB) report |

Since the outbreak of the COVID-19 pandemic, Posts

across the world have been working on the front lines of

the public response to the disease. In addition to fullling

their traditional role as a logistics service provider, in

the course of this pandemic, Posts have expanded

their social, nancial and delivery services to assist

governments, support businesses and serve citizens

in a way that has helped underscore the resilience, the

innovation and the unique value proposition of postal

networks both domestically and globally.

Many Posts have continued to operate and provide

a range of services against the background of

restrictions on the movement of people and the

closure of international borders to prevent the spread

of the pandemic. Posts have emerged as an essential

service and in a positive light in many countries

in response to the pandemic. The pandemic has

amplied and augmented the two key facets of Posts’

value proposition: rst, their role as delivery agents

of what may be deemed essential services, including

communications (mail, including direct mail and parcels)

and medicines, as well as social and nancial services;

and second, their role as custodians of an essential

infrastructure composed of tangible (e.g. post oces)

and intangible (e.g. local knowledge and trust) assets

that enable and expedite the delivery of essential

services. More than a new role for Posts, the pandemic

has reinvigorated their existing value proposition to

governments and citizens.

This augmented value proposition sheds light on the

unmatched assets of Posts in pandemic times and

beyond:

The near universal reach of the postal

network, both domestically (physical

network, urban and rural reach) and

globally (through the UPU treaty-based

ecosystem), and an unmatched last mile

delivery logistics capability;

The trust premium enjoyed by Posts

with citizens, businesses, communities

and governments; and

The local and community knowledge

held by Posts.

Posts have also taken the opportunity to roll out

innovative products and services to support the response

of governments to the pandemic. This is the case of

social services, such as the delivery of medicines and

medical supplies, and of new electronic and nancial

services.

IMPACTS ON

INTERNATIONAL AND

DISRUPTED POSTAL

SUPPLY CHAINS

The international light-logistics growth rate calculated by

the UPU shows that cross-border exchanges worldwide

have dropped by 21% since April 2020, which saw the

outbreak of the crisis for all mail classes (letters, parcels

and express).

In the specic case of the postal sector, an immediate

and striking consequence of COVID-19 has been

widespread disruption to international supply chains,

resulting from constraints imposed on international

transport, in particular aviation, inuencing international

transport capacity. Another visible impact of the

crisis for cross-border postal exchanges has been

the increase in the time taken to clear items through

Customs, owing to additional inspections of both

outbound and inbound items.

GROWTH IN DOMESTIC

COMMERCE

COVID-19 has massively accelerated the growth of

e-commerce, with reported year-on-year total online

spending up 77% (Adobe study). Online shopping is

also expected to be the new norm in the post-COVID

world where the unparalleled growth of e-commerce

will certainly disrupt national and international retail

frameworks. As observed in most countries, the surge

in e-commerce sales has boosted demand for postal

services. Across the world, Posts are reporting double-

digit growth in e-commerce transactions and delivery

through the postal network.

| COVID-19, Posts and direct marketing

DIRECT MARKETING

AND COVID

Direct marketing has also been aected by COVID-19,

including in relation to the growth in demand for

e-commerce. In most markets, direct marketing volumes

have decreased since the beginning of the pandemic,

in line with global mail trends. However, the pandemic

has amplied existing customer behaviour, particularly in

terms of people’s response to advertising and direct mail.

In some important markets, the demand for local and

domestic e-commerce and home delivery services has

amplied the way customers have engaged with direct

mail and boosted the impact of direct mail in driving B

to C transactions. As shown by a study led by Royal Mail,

with more people at home, direct mail matters more and

is driving online transactions more than ever.

In the view of the impact of the pandemic, the Directing

Marketing Advisory Board (DMAB) developed this report

providing the postal and direct marketing community

with a global perspective and analysis on the levels of

impact of the pandemic on the direct marketing market

and the postal oering in this space. It also focuses on

country and industry cases that illustrate the way specic

postal operators and direct marketing stakeholders have

responded to the pandemic and to the challenges arising

therefrom.

This report comprises four chapters:

THE STATUS OF THE

DIRECT MARKETING

INDUSTRY OF

POSTS AND DIRECT

MARKETING;

THE IMPACT FACTORS

OF THE COVID

PANDEMIC ON THE

DIRECT MARKETING

INDUSTRY;

OPPORTUNITIES AND

THE WAY FORWARD;

AND

SPECIFIC CASES: THE

VIEWS OF POSTAL

OPERATORS AND

DIRECT MARKETERS

ON THE IMPACT OF

COVID

19.

A UPU Direct Marketing Advisory Board (DMAB) report |

| COVID-19, Posts and direct marketing

Posts

and direct

marketing:

a global view

DMAB survey analysis

CHAPTER 1

A UPU Direct Marketing Advisory Board (DMAB) report |

INTRODUCTION

In 2007, the DMAB launched a survey on direct and

digital marketing products and services, which was

repeated annually until 2014 and biennially from 2017

onwards. The survey consists of 22 yes/no questions,

aimed at assessing the direct and digital marketing

products and services provided domestically by

designated postal operators (DOs). Over the years, an

average of 80 DOs have responded to the surveys, with

a balanced regional representation.

Based on the surveys conducted since 2007, this

chapter provides a high-level analysis of the key trends

surrounding the dierent types of products and services

oered by DOs across various regions in the eld of

direct marketing.

PRODUCTS

AND SERVICES

PROVIDED BY

UPU DESIGNATED

OPERATORS

PHYSICAL SERVICES

Addressed direct mail: when the addressee is

identied with a name and an address (of a person and/

or a company).

Globally, over the 2007–2019 period, there was steady

growth in the number of DOs oering an addressed mail

service in dierent countries. The proportion of DOs

providing addressed direct mail is high, at between 55%

and 100% depending on the region. This shows that

addressed direct mail remains a major product for Posts

in all regions.

Unaddressed direct mail: when the addressee

is not identied with a name. Unaddressed direct mail

services might, however, be targeted at a specic region,

postcode or letter-carrier route, or to a number of

households sharing a similar demographic prole.

Globally, the unaddressed direct mail service remained

steady in all regions throughout the 2007–2019 period.

Overall, the percentage of DOs oering an unaddressed

direct mail service was very high throughout the

period, at 80%. The proportion of DOs providing

an unaddressed direct mail service in industrialized

countries (ICs) maintains the same trend, with 96% in

2007, up to 100% in 2019.

With a high level of return on investment (ROI), the

unaddressed direct mail service remains a key activity

for DOs. The survey shows that, over the years, the

unaddressed direct mail service has played an important

part in DOs’ products mix, and is perceived by their

customers as an easy and ecient way of reaching

potential new customers.

| COVID-19, Posts and direct marketing

Printing services: printing services provided on

the postal operator’s premises or in partnership with a

subsidiary.

Globally, the overall trend constantly increased with an

average of 50% of DOs oering printing services to

their customers. In ICs, the percentage of DOs stood at

85%, against an average of 50% in other regions. The

increasing importance of printing services again conrms

the relevance of physical media as a marketing channel

for postal operators and their customers.

WEB

BASED MARKETING

E-mail marketing: direct communication with

targeted customers or prospects using e-mail to obtain a

measurable response or transaction.

Globally, the proportion of respondent postal operators

oering e-mail marketing increased from 26% in 2017

to 34% in 2019. However, the situation varies from one

region to another.

While widely available in ICs, e-mail marketing is less

commonly oered in other regions, with an average of

over 20% of DOs providing it. One reason for this could

be Posts’ varying degrees of digital transformation, and

the perception of e-mail as a competitor to physical mail.

Display advertising (banners): advertising

using ad space on websites to reach a desired target

audience. Sites may include web portals, blogs,

casual gaming sites, social networks, instant message

applications, widgets, RSS feeds, and more. The most

common type of display advertising is banner ads.

In 2019, a total of 36% of DOs oered display advertising

(banners) as a direct marketing product. In ICs, the

average stood at 46% of DOs in 2019, with an average of

31% in other regions. It should, however, be noted that

40% of DOs in the Arab countries oered this service.

Social media marketing: marketing through

social media sites (Facebook, Twitter, Instagram,

LinkedIn).

Globally, social media marketing is oered by a third

of the respondent DOs. In ICs, 38% of DOs provide it,

against an average of 35% in other regions. However,

in the Caribbean and Latin America region, the trend

has increased and averaged at 29% in 2019. This type of

oering is expected to grow in the future with the rise of

the social media footprint in the media mix.

PHONE

BASED MARKETING

Mobile/SMS marketing: marketing

communications delivered through electronic devices,

such as mobile phones.

Globally, oering mobile (SMS) marketing has been an

increasing trend among respondent DOs. In ICs, an

average of 60% of DOs provide mobile (SMS) marketing

services, while the proportion remains relatively low in

other regions, at around 40% in the Arab region and

45% in the remaining regions.

SMS marketing has a high ROI as studies show that

the average SMS open rate is 98%, which is much

higher than for marketing e-mail. A total of 90% of

SMS messages are read within three minutes, and 51%

of consumers are interested in being able to text with

their favourite brands. It should, however, be noted

that mobile (SMS) services are sometimes perceived

as intrusive and are negatively aected by customers’

reluctance to provide their mobile phone numbers. ,

Telemarketing: the practice of marketing by

telephone. Inbound telemarketing is when interested

customers respond to a mailing or advertisement by

phoning the number indicated to place an order or to

inquire about the product or service oered. Outbound

telemarketing is when a salesperson calls prospects to

get them to buy the product or service oered directly

by phone.

Globally, telemarketing is oered by a small number of

DOs – on average, 11% of respondent DOs since 2007.

However, with the proportion standing at 16% in 2019,

there has been an increase in the last two years in all

regions, especially in the Europe and CIS region and

Africa.

A UPU Direct Marketing Advisory Board (DMAB) report |

CONSULTANCY

Consulting in direct marketing: free or paid-

for specialist advice provided to actual or potential users

of direct and digital marketing for planning, executing

and managing their campaigns.

Globally, the number of DOs oering customers

direct marketing consulting services has remained at

a high level over the last 12 years. Having increased

in all regions, the proportion of DOs providing direct

marketing stands at 80% in ICs and 40% worldwide. This

rise is particularly prominent in Europe and among ICs,

where the numbers doubled over the period surveyed.

Those gures show that postal operators are increasingly

considered as key players in the direct marketing value

chain, and that they are seen by their customers as a

trusted advising partner in order to gain optimal direct

marketing results.

ADDRESS

BASED SERVICES

Master address databases (delivery-point

databases)

Internal operational planning:

allocation of resources;

For address correction and verication: the

customer is able to verify whether an address

(delivery point) exists.

The number of DOs providing master address databases

has been steadily increasing since 2007, with an average

of 85% of DOs from ICs and 55% in the other regions

oering this service over the surveyed period.

Change of address system – system that allows

companies and individuals to inform the Post when they

move to a new address, so that they can have their mail

redirected to the new address.

Over the last 12 years, there was an overall increase

in the provision of change-of-address systems for the

redirection of mail. It is an important service, oered

by 90% of ICs and more than 50% of DOs in other

regions. Most DOs provide redirection of mail when

people move. While not being solely connected to direct

marketing per se, this service has a high value in terms of

the quality of data used by Posts to support their direct

marketing oering.

Mailing lists (compiled internally by

the Post):

names and addresses of companies and/

or individuals with a common interest, lifestyle, activity

or characteristic. These lists are owned by the Post and

can be compiled from questionnaires sent to individuals/

companies (e.g. lifestyle surveys), or other surveys

performed by mail carriers or other agents, or with a

combination of data acquired from public or ocial

sources.

Globally, DOs’ mailing-list services remain consistently

stable, at around 55% of DOs in ICs and 20% in other

regions.

INTERNAL ORGANIZATION

Department/division dedicated to direct

marketing/advertising mail (product

management):

special unit or department of the

Post dedicated to direct marketing product management

(denition of product features, pricing, strategy, etc.) –

but not necessarily responsible for sales.

The establishment of a department, division or structure

dedicated specically to direct marketing is a very good

indicator of the importance of this line of business for

DOs. Since 2007, an increasing number of DOs have

created such structures, with the proportion standing at

56% globally. Regionally, in 2019, 69% of DOs in Asia-

Pacic, 71% in Africa, and 85% in ICs had a department/

division dedicated to direct marketing/advertising mail.

The trends shows the business importance of direct

marketing as a postal product.

| COVID-19, Posts and direct marketing

Quality of service control for direct mail

items – measurement:

the Post measures

the quality of service provided for direct mail items

(how many days it actually takes between posting and

delivery).

Over the last 12 years, there has been a steady growth

in the number of DOs that have implemented processes

to measure the quality of service provided for direct

mail items, with a global average of 66%. In ICs, the

percentage rises to 80% of DOs, with a level of 60% for

the rest of the world. The success rate of a campaign is

very dependent on the return of marketing investment

(ROMI). To be able to show clients the accuracy of

delivery is a key selling point.

Quality of service control for direct mail

items – delivery standard:

the Post publishes

the delivery standard for direct mail items (expected day

or period for delivery of direct mail items).

Setting delivery standards for direct mail has been an

increasingly important feature for DOs. On average,

over the 2007–2019 period, 77% of respondent DOs set

delivery standards globally, with the percentage rising to

85% in ICs. Both standards and quality control are very

important, as direct mail is highly time and data quality

sensitive – the marketed oer is very often valid for a

certain period only.

KEY FINDINGS

As show by the results of the DMAB surveys, two distinct

but simultaneous trends in direct marketing have

emerged:

horizontal value chain extension

and vertical value chain development.

HORIZONTAL EXPANSION OF

POSTAL SOLUTIONS ALONG

CUSTOMERS’ VALUE CHAIN

As shown by the surveys, traditional physical direct mail

is still a core activity for Posts, and contributes to postal

volumes and revenues despite the global decrease in

letter mail.

An increasing number of Posts worldwide have been

adding value to their core distribution services by

oering products and services both before and after

delivery. These include: consultancy and agency services;

data management and list oerings; printing, nishing

and lettershop services; response management; logistics

and reverse logistics; and customer services. Some of

these value-added services, such as data management,

have even become core to some Posts, since they

facilitate and drive ecient use of the mail channel.

The DMAB survey on direct and digital marketing

products and services clearly demonstrates this trend:

at least 43% of all Posts now provide mailing list

services; 37% possess mapping and proling capabilities

for unaddressed direct mail; 56% oer mail preparation

services, such as lettershop and/or printing; and 44%

provide a service to manage returns of undeliverable

items. Additional services do not necessarily represent

signicant additional revenue, but they add value

to the physical direct mail product. These services

are provided in direct competition with other

market suppliers in the great majority of countries,

industrialized and developing alike.

In the past, direct mail volumes in most

countries experienced continual, signicant

growth, before decreasing towards the end of

the last decade, and declining further in recent

years. At the same time, spending on digital

media has been growing exponentially. Posts

should invest and develop new digital-based

services, so as to bolster revenues gained

through physical streams.

A UPU Direct Marketing Advisory Board (DMAB) report |

VERTICAL VALUE CHAIN

DEVELOPMENT

A second and more recent trend is vertical expansion,

which relates to channel diversication through the

provision of new solutions that position Posts as direct

marketing channels as opposed to simply physical

channels.

As shown by the results of the surveys, Posts are

increasingly oering other channels besides traditional

physical direct mail, ensuring that not only is the mail

channel fully integrated into a customer’s overall

communications mix, but also that there are other

ways through which businesses can contact current

and potential customers. In this way, Posts provide

other direct marketing channels. The survey shows

that digital transformation is a reality for Posts in the

direct marketing space, with more and more DOs

oering e-mail services, web-based marketing services

and so on.

In vertical value-chain development, the growth of direct

marketing is digital and data-driven. It includes:

Understanding of how advertisers plan,

develop and execute their marketing

campaigns;

Integrated direct mail and digital advertising

channels.

As technology advances and communication processes

become progressively integrated, and as direct mail is

increasingly combined with other media channels in

customer marketing campaigns, Posts are changing their

role in the media markets and aligning their strategies

and activities with customer requirements.

Posts need to understand the role of direct mail in this

new environment, and to create innovative solutions

to facilitate the integration of mail into advertisers’

marketing strategies through oine/online oerings.

In today’s multi-channel, integrated media market, the

past growth seen in physical mail volumes is unlikely to

return; however, that does not mean that there need be

a decrease in the importance of postal services. On the

contrary, in diversifying and expanding their strategies

both horizontally and vertically, Posts can take advantage

of the convergence and integration of new media into

advertisers’ campaigns, adding new value by oering

solutions that facilitate the use of several channels, using

technology wisely and eciently to that end.

The available data and analyses show that direct mail

and direct marketing have been adversely aected by

the decline of physical mail volumes worldwide. However,

the growth in e-commerce trac is perceived by mailers,

direct marketers and postal operators as a driver for

direct marketing at both the domestic and international

level. Direct mail and direct marketing are considered

as complementary to the online environment. The

integration of various media and marketing channels

(whether digital or physical), data management,

and knowledge of the client environment all present

opportunities for postal operators and mailers in not

only the industrialized world, but also in emerging and

developing countries.

ANALYSIS OF MAIN FACTORS

INFLUENCING DIRECT

MARKETING TRENDS

OF THE POST

Digital transformation, data revolution and e-commerce

development can be identied as the main drivers of the

trends observed across the suite of products and services

oered by DOs over the period covered by the surveys.

| COVID-19, Posts and direct marketing

With the global increase in e-commerce transactions and

the resulting impact on business-to-business (B2B) and

business-to-consumer (B2C) trac, direct mail and direct

marketing have a new role to full in the e-commerce

ecosystem. The DMAB surveys have shown the relevance

of physical mail and its importance in the direct

marketing mix oered by Posts. This relevance has been

conrmed by several other studies and research projects,

especially in the e-commerce context. For example,

International Post Corporation (IPC) commissioned a

survey with over 28,000 consumers in 31 countries.

A total of 51% of them claimed to have received

advertising mail – i.e. paper adverts and catalogues –

from e-retailers in the past 12 months (IPC Cross-Border

E-Commerce Shopper Survey 2017

). In the same study,

44% of those that received advertising mail claimed to

have made an online purchase as a result of receiving

printed advertising mail or catalogues from e-retailers.

Data is fundamental to the success of direct mail

campaigns and the foundation of successful combined

physical and digital media campaigns. Advertisers

have learned how to work with, and benet from, data

collection and analysis to achieve eective direct mail.

Data is also responsible for the growth and success of

digital and electronic marketing. Investing in data and

information management has been a major innovation in

the postal world, often building on previous operational

data used for quality distribution of physical mail. To

expand horizontally along a customer’s value chain, as

mentioned above, Posts have been working to acquire

and enrich address data and demographic knowledge,

which is extremely useful to advertisers for better

targeting. Indeed, for vertical expansion into channel

diversication, one of the key developments is into digital

data management.

A UPU Direct Marketing Advisory Board (DMAB) report |

DIRECT MARKETING AND THE POST

(

2007

–

2019

)

: SNAPSHOT OF MAIN TRENDS

PRODUCT/SERVICES

Global trends

from 2007 to 2019

% of DOs

oering the products

and services in 2019

PHYSICAL PRODUCTS

Addressed direct mail service

81%

Unaddressed mail service

79%

DIGITAL PRODUCTS

Email marketing

34%

Social media marketing

30%

Mobile/SMS marketing

28%

CONSULTING

Consulting in direct marketing

38%

Training for customers

31%

ADDRESS

Master address databases

46%

Mailing list brokerage

18%

Change of address system

54%

PRINTING SERVICE 53%

DM INTERNAL DEPARTMENT

Advertising mail

57%

DM items-QS measurements

56%

QS Delivery standard

53%

| COVID-19, Posts and direct marketing

How has

the COVID-19

pandemic

aected

the direct

marketing

industry?

CHAPTER 2

A UPU Direct Marketing Advisory Board (DMAB) report |

Prior to the coronavirus crisis,

the outlook for growth in direct

marketing was decidedly mixed.

All around the world, direct marketing plays an

important role in helping brands promote themselves,

engage prospective audiences and reinforce customer

relationships that touch a vast array of other channels.

Nevertheless, for more than a decade its practitioners

have had to contend with a conicting array of signals

about the role of mail and its place in an evolving

media mix.

While brands wrestle with the cost and complexity

of direct marketing campaigns, as well as the false

perceptions in some markets that mail lacks the

eectiveness of digital media alternatives, the same

marketers are contending with intense competitive

pressures and a media ecosystem that bombards its

desired customers with non-stop promotional messages.

This problem of “clutter” has served to drive widespread

interest in mail and other promotional vehicles that

attract meaningful attention and deliver relevant

messages to target audiences. The fact that direct

marketing is so deeply dependent on audience data has

also helped reinforce its attractiveness, while helping

direct marketers carve out positions of leadership

inside organizations that are seeking to capitalize on

the potential of “big data” to drive this type of targeted

marketing, as well as a host of other functions.

Competition for mail’s signicant piece of the marketing

budget has been growing signicantly in recent years.

In the United States of America, for example, spending

on direct mail has been in a shallow but systemic decline

for several years – even while relatively “mature” digital

channels (such as search and online display advertising)

continue to post annual double-digital spending

gains (on a percentage basis). Prior to the COVID-19

pandemic, for example, Winterberry Group projected

that all US advertising and marketing expenditures would

grow by 7.2% in 2020 (more than double the pace of

the economy as a whole, to a total of almost 390 billion

USD). Direct mail, by contrast, was expected to grow by

just 0.5% over the course of the year.

Source: Winterberry Group

Note: 2020 Direct mail spend/volume estimate was established prior to the COVID-19 crisis

| COVID-19, Posts and direct marketing

The coronavirus crisis has very much reset those

estimates (with some outlets projecting that global

advertising expenditures would actually decline by

more than 7% in 2020 – mirroring, to the negative,

the otherwise rosy prognosis from just months earlier).

Nevertheless, the long-term trajectory of direct

marketing is clear: it remains an important part of the

promotional mix, and is vital in support of certain use

cases and vertical market applications. Its share of

marketer spending is, however, shrinking relative to other

data-driven channels.

Crises do not typically aect

marketing investments in

straightforward ways

Conventional wisdom would seem to suggest that in

times of economic diculty, marketing budgets are

among the rst to be cut as businesses seek to eliminate

unnecessary spending.

The truth is more complex. Since economic downturns

aect geographic and vertical markets in dierent ways,

we tend to see responses that vary signicantly across

media channels. Increasingly, brands – with more data at

their disposal, and better tools allowing for insight into

the impact that marketing spend has on sales and prot

performance – are growing reluctant to simply slash

marketing budgets when facing economic adversity.

Instead, they tend to adjust their campaign priorities

and media mix to protect their entrenched positions and

reallocate capital to where it can have the greatest eect.

Over time, that trend has aected the mail channel

in opposing ways. On the one hand, it has served to

diminish investment in direct mail (since many brands

“protect their entrenched positions” by redoubling

their eorts around customer retention and loyalty

management – much of which has already migrated to

e-mail, social media and other similar communication

channels). But it has also often reinforced condence

in direct marketing and its contribution to bottom-line

results, which are typically far easier to measure (and thus

optimize) than other traditional advertising channels.

Invariably, direct marketing is also one of the rst

channels that brands rely upon in re-engaging “business

as usual” following an economic downturn. Aggressive

brands will look to capitalize on their competitors’

absence; upstart brands will look to quickly ramp up the

work of new customer acquisition; and still others will

look to attract attention among the broadest swath of

their customer base as possible.

Source: Winterberry Group

Note: 2020 Direct mail spend/volume estimate was established prior to the COVID-19 crisis

A UPU Direct Marketing Advisory Board (DMAB) report |

In virtually every market,

COVID-19 has dramatically

curtailed direct marketing

activity

At the time of writing (October 2020), we are still living

in the thick of a human and economic crisis of such

profound scale that we cannot yet fully comprehend its

breadth and impact, nor the window of time with which

we will have to continue managing its repercussions.

In the relatively short period that COVID-19 has been

with us, though, we can already see signicant negative

eects in the practice of direct marketing. For example:

In the US, marketing mail volume in

the second calendar quarter of 2020

(representing most mail sent to support

commercial customer acquisition and

brand-awareness eorts) dropped by

36.4% compared to the same quarter

in 2019 – from 17.7 billion to 11.2

billion pieces. “First-class mail” faired

somewhat better (dropping just 9.2%

over the same period).

Elsewhere in the world, results have

been directionally consistent (and,

in some cases, even more severe). In

the United Kingdom in late June, for

example, Royal Mail reported that

direct mail volumes had fallen 63% on

account of the coronavirus crisis when

compared to previous periods. And

a survey of UK marketers conducted

by the Institute for Practitioners of

Advertising in July found that more

than half of British marketers had

slashed marketing budgets between

March and June of the year – even

while direct mail faired better than

most among the list of channels that

had were targeted for cuts.

In Canada, Canada Post reported in

August that direct marketing revenue

had fallen 46.4% in the second quarter

compared to the same period in 2019.

And even though the coronavirus crisis

did spark new e-commerce-driven

parcel activity, COVID-19 is seen as

driving a net revenue decline of 46

million Canadian dollars (CAD) in the

quarter.

The crisis has also altered the mix of communications

that marketers are looking to push to the consumer

mailbox. As one might expect, the markets that have

been hit most directly by the crisis, including brick-and-

mortar retail, live entertainment and travel/hospitality,

have all cut back dramatically on their promotional

programmes. Other verticals, however, have maintained

or actually increased their volumes amidst the crisis,

with emergent direct-to-consumer brands (which were

foremost among up-and-coming direct marketers prior

to the onset of coronavirus), insurance and not-for-

prot mailers taking centre stage. In the US, where the

presidential election and nearly 500 House and Senate

races loom large on the calendar, political mailers have

also maintained a heavy presence in the mailstream. By

contrast, many nancial-service mailers have moderated

the frequency of their new-customer appeals in the light

of the economic diculties facing many consumers.

Despite a growing optimism among industry circles,

a return to direct marketing “normal” – in volumes,

revenue or general enthusiasm – is not expected for

some time.

| COVID-19, Posts and direct marketing

A UPU Direct Marketing Advisory Board (DMAB) report |

THOUGH MANY HAVE LEARNED

TO “MANAGE” THE ECONOMIC EFFECTS

OF COVID, KEY QUESTIONS REMAIN

Can our economies handle the shock of the

“second/third waves” now impacting many

nations? How long do they last?

Can markets continuing to struggle with

Covid learn important lessons from those

that have largely contained the pandemic?

What kind of ancillary economic impact will

be felt by those markets moving to enact

stronger safeguards?

Will the vaccines ultimately deliver results

and help reinforce economic condence? If

so, how quickly can they be manufactured

and distributed in a way that is safe,

equitable and further reinforces condence?

If not, how does that impact the timing and

severity of a “long-range” recovery scenario?

| COVID-19, Posts and direct marketing

Has COVID-19

presented any

opportunities for

the reinvention of

direct marketing

in the years

to come?

How should industry

stakeholders respond?

CHAPTER 3

A UPU Direct Marketing Advisory Board (DMAB) report |

What can we learn about the

2008-2009 global economic

crisis to inform our response to

COVID-19?

Although the challenges ushered in by COVID-19 are

unprecedented, history does provide some instruction

with respect to how and why they are currently being

felt in the market, and how the market can most

constructively respond.

To point, the global direct marketing community also

encountered signicant headwinds in the midst of the

2008-2009 global economic crisis, which sharply aected

economies worldwide and drove many observers to

predict that the crisis would accelerate marketers’ eort

to shift their spending away from “traditional” channels,

like direct mail, to digital media alternatives that were

then emergent.

In fact, the global direct marketing industry did endure a

signicant downturn in brand investment between 2007

and 2010. However, in the US and many other markets,

that adversity was not linked to any change in channel

preference among end-users. Instead, the economic

crisis disproportionately aected those vertical industries,

including the real estate, credit cards, mortgage and

other consumer lending sectors, which happened to be

heavy users of direct mail at the time. With no eective

products to market, those brands essentially turned o all

marketing eorts across all channels for the better part

of a year. And not surprisingly, their eventual economic

renaissance brought with it a return to spending on

direct mail and similar channels.

Direct marketing recovery will

be grounded in the elements

that dierentiate mail as a

promotional channel

We are already seeing similar patterns emerge in this

crisis. The brick-and-mortar retail industry, for example,

has been hardest hit by the COVID-19 crisis, and its

contraction has had a disproportionate impact on the

mail channel, given the signicant role that catalogues,

cross-channel/e-commerce promotions and the unique

Source: Winterberry Group

Note: 2020 Direct mail spend/volume estimate was established prior to the COVID-19 crisis

| COVID-19, Posts and direct marketing

combination of national, regional and local retail

promotions have long held in the media mix.

Ultimately, full recovery will depend on improvement

across a vast array of factors connected to public

health, economic policy and general consumer welfare,

which are typically dicult to measure and even more

dicult to control. When these conditions improve, and

when retail and other hard-hit businesses regain some

momentum, they will need a platform to build brand

recognition and engage customer audiences in ways that

are relevant but ecient.

That is where direct marketing is positioned to play a

powerful role in the future. Amidst a more fractured

and dynamic media mix, mail’s ability to drive customer

acquisition remains unsurpassed, particularly when

bringing tailored messages to large audiences is the

brand’s overarching marketing priority. Helping those

brands understand more about that performance,

and to attribute a defensible ROI to their direct

marketing investment, will be the responsibility facing all

participants in the direct marketing value chain going

forward.

Posts have an active role to play

in the post-COVID-19 economic

rebirth, but must be responsive

to commercial needs

The world’s postal operators have an active role to play

in the rebirth of the direct marketing industry, along

with printers, mailing houses, agencies, data providers,

analytics consultancies, software developers and a range

of other suppliers. It will not, however, be enough to

simply advocate the use of the mail. These entities must

all help their customers make a compelling business

case for their investment in direct marketing, showing

how and where using the mail can drive performance

advantages relative to channels that, say, reach narrower

audiences or drive lesser emotional impact.

That will not always be easy, especially as competition

and adverse macroeconomic conditions narrow the

exibility that many brands have in experimenting with

new and/or particularly expensive marketing media. As

usual, brands will demand reliability, predictable delivery

windows and continuous product innovation from

their direct marketing suppliers, with the nature of that

“innovation” varying signicantly across markets. Today,

we are seeing the most resilient direct marketing industry

participants engaging in at least four key activities:

“Scenario planning” various potential

economic outcomes;

Reconsidering their product suite, with

a plan to streamline focus on high-

performance oerings (as well as those

that are required by charter or their

universal service mandate);

Restructuring for a “new normal” that

will be smaller for months – and maybe

years – to come; and

Engaging with customers and other

stakeholders to hear more about real-

world business needs.

Many risk factors remain, but

enthusiasm for mail and its role

is actually growing

The risk factors facing direct marketers, and the direct

marketing industry that services them, are plentiful.

COVID-19 is still with us and is likely to remain so

for some time. Many markets are struggling with

unprecedented socio-political challenges that are

aecting economic opportunity, and for the rst time,

competitive media channels, such as advanced TV, are

emerging to challenge the supremacy of direct mail as a

platform for driving new customer acquisition.

More than ever before, consumers are likewise

rallying behind Posts as forces for national and global

communication, equality and interconnectedness. For

those up to the task, tapping into that goodwill (as

well as the distribution networks and expertise that

distinguish postal operators as unparalleled platforms

for one-to-one communications) will prove instrumental

in re-establishing a healthy and durable foundation for

direct marketing’s continued health for years to come.

A UPU Direct Marketing Advisory Board (DMAB) report |

| COVID-19, Posts and direct marketing

COVID-19 and

direct marketing:

the views of postal operators and

stakeholders in the direct marketing

value chain

CHAPTER 4

A UPU Direct Marketing Advisory Board (DMAB) report |

Vision of direct marketing in a post-

COVID-19 world:

Vietnam Post considers direct

marketing as one of the most eective sales marketing

channels to support the business plan targets 2021-2025

and vision 2030.

COVID-19 accelerates

digital transformation

In the context of limited physical marketing solutions

resulting from COVID-19, digital marketing has become

the most important tool for pushing up revenues

from postal services and attracting dierent types of

customers.

Vietnam Post has used digital marketing channels

together with traditional ones (leaets, posters,

roadshow, etc.) during COVID-19, as follows: tele-

marketing, marketing via e-mail, search engine

marketing, and SMS and social marketing (marketing

on social network) to introduce and oer products and

services that help reduce direct contact with customers

and minimize the spread of COVID-19.

From March to October 2020, Vietnam Post launched

10 marketing campaigns to approach 10 million

customers, turning 100,000 potential customers into

existing ones. It increased revenue from postal services,

nancial postal services and distribution communication

services, and supported all subsidiaries in marketing and

sales activities across the entire postal network.

Direct marketing plays an

important role in recovery

and how the Post becomes

a part of the economic

recovery

With direct marketing, leveraging on the advantages of

network, labour and IT application solutions, Vietnam

Post involves itself in big government plans and projects,

and updates and actively cooperates with business

partners on IT solutions to renew existing products

and services to be ready for government, society and

community’s connection.

Making use of the current advantages of a large IT

applications network (over 20,000 computers connected

to the Internet, over 10,000 service points connected

online, mail sorting centres equipped with automatic

sorting machines, etc.), Vietnam Post has implemented a

digital transformation strategy as the basis for deploying

many big government projects and plans, including

the following: Itrithuc; Vmap; e-government; electronic

identication and authentication – PostID; non-cash

payment solution; social security and residential database

development; and a postal address system covering each

household nationwide.

Vietnam Post also actively engages in the development

of Viet Nam’s national public services portal. Vietnam

Post focuses on creating accounts allowing individuals

and businesses to access the national public services

portal and self-register on PostID rst, then to submit

relevant documents and dossiers to the post oce for

verication. In addition, post oce sta also introduce

and create accounts for customers on the PostID

system when they are using postal services at any post

oce. To increase the number of users, Vietnam Post

supports individuals and businesses, especially people

in rural and remote areas to access and submit relevant

dossiers via this portal at every post oce. Vietnam

Post also collaborated in integrating Vmap into this

portal to create an appropriate basis for attracting more

individuals and businesses using public services.

VIETNAM POST ADDRESSING

THE POST

COVID

19 SITUATION

WITH INNOVATIVE SOLUTIONS

| COVID-19, Posts and direct marketing

Recently, Vietnam Post has developed Covid-19 Safe

Living Map

. This system includes utilities on the Vmap

Digital Map platform to show the real-time safety

situation of epidemic prevention and control in crowded

facilities. Vietnam Post is one of the key business units

involved in the construction and development of this

platform by providing a mapping platform and address

information system allowing users to nd the exact

address and most convenient route to this public facility,

even in remote areas. Users can easily share these

locations in the community.

Opportunity for Vietnam

Post’s growth in direct

marketing in the context

of e-commerce (cross-

border direct marketing)

To promote e-commerce development and build a

common platform for digital transformation in the postal

eld, the Government has assigned Vietnam Post the task

of developing the postcode platform, Vpostcode, on the

national scale

. Vietnam Post has already completed this

task.

Since the Vpostcode launch ceremony, many individual

and business users have accessed Vpostcode.vn to

experience functions of this postal address system.

Vpostcode not only supports delivery service providers

and users in looking up addresses and directions quickly

and accurately, but it also brings benets to e-commerce

and logistics businesses by optimizing transportation and

delivery.

Small and medium-

sized enterprises (SMEs)

(insurance, education,

retailers, etc.) in Viet

Nam use the Post’s large

network of service points

in rural and remote areas.

The Post provides frequent

daily delivery routes/trips

and allows SMEs to market

their products and services.

Vietnam Post’s delivery services are used to send product

samples, coupons and vouchers to every household

nationwide.

Vietnam Post’s direct mail service is used for the direct

marketing of products and sending of catalogues and

cover letters/advertisements to customers and residents

nationwide.

A UPU Direct Marketing Advisory Board (DMAB) report |

In Italy, direct marketing (DM) is considered a crucial

commercial product, which can create value for

companies adopting it. In our country, those companies

that traditionally preferred to channel their campaigns

through the television have transitioned to digital

marketing to advertise their products, and have

successfully tapped into the numerous advantages

provided by DM. DM’s specic features, namely

adaptability and cost-eectiveness, combined with a

widespread good response and a favourable return

on investment, have pushed an increasing number of

companies to consider this marketing tool as an active

component in multichannel campaigns during the

past few years. Through DM, any company can build a

commercial proposal that is suitable to meet individual

customer needs. Poste Italiane has a success story

to tell on the matter. It has clearly identied a strong

value proposition in choosing DM, which is easy to use,

nancially aordable, and equipped with a streamlined

contracting process.

Statistics indicate that at the beginning of 2020, DM

saw an increase in its usage share, compared to other

means of communication. This is mostly related to

Italian companies’ shared need to develop multichannel

campaigns, and resorting to DM as their preferred

commercial support tool.

Last March, the rst lockdown in Italy proved to be a

disruptive event with regard to commercial mail, which

inevitably caused a remarkable change in the advertising

scenario. For organizational and nancial reasons, all

DM product deliveries were suspended for 40 days.

Consequently, any company using DM was forced to

modify its communication strategies and to deal with lost

income, increased costs, and unexpected expenditures

related to cancelling all campaigns in progress.

The sectors that were most aected by the urgent need

to change their commercial strategies were the major

organized distribution companies, whose business

was based on mail orders, as well as fundraising

organizations, whose advertising was mostly channelled

through DM. In some cases, rms had to reduce their

DM campaigns, and in a large number of cases, DM

was completely cut out of the budget. In Poste Italiane,

business continued as usual and DM continued to be

part of the commercial strategy, which simply slowed

down, but never stopped.

In the second half of 2020, DM advertising was

gradually resumed by means of several initiatives aimed

at encouraging its usage. These strategies included

extending the trial period for new customers and

introducing an extraordinary time extension on aliation

contracts to allow large customers to make up for the

shipment of forecast annual volumes. Poste Italiane

also launched a partially addressed mail service, an

experimental product for the Italian market. It is designed

to leverage the DO’s logistical network and the eciency

of unaddressed mail campaigns.

Looking ahead, once we are out of the health

emergency, DM will surely be promoted again as a

leading strategy for old and new customers, and as

a winning tool that will expedite the much expected

nancial recovery.

POSTE ITALIANE

–

DIRECT

MARKETING AND COVID

| COVID-19, Posts and direct marketing

In January 2020, the sudden onset of COVID-19 forced

China (People’s Rep.), with a population of 1.4 billion, to

press the pause button, and China Post, which serves all

citizens, to suspend postal operations across the country

owing to the strict implementation of the Chinese

government’s epidemic prevention and control policies.

However, the postal mission cannot remain stagnant.

Faced with this major public health emergency, China

Post Group Corporation actively responded to ensure

the health and safety of postal workers committed

to providing all Chinese citizens with uninterrupted

services, highlighting the Chinese postal industry’s sense

of responsibility. Moreover, in the case of this major

pandemic, China Post has shouldered the responsibility

of the national team in providing a response through its

operations and provision of services.

China Post’s direct mail

business revenue under

COVID-19 in 2020

In the past, when we talked about direct mail, it was

mainly referring to letter-post business. New media

advertising has developed rapidly over time, and

China Post has expanded its letter business into three

categories: basic letters, letter media and letter goods

(cultural and creative products) – all of which are now

part of the Post’s direct mail service oering.

Income from basic mail, mail

media and mail merchandise

(cultural and creative products)

business from January to

August 2020

The basic letter business totalled 1.86 billion USD, which

was a 24% drop on the same period last year. In detail,

business letters amounted to 490 million USD, which

was a 25.5% reduction on the same period last year.

In addition, postcard postage totalled 540 million USD,

which was a 14.6% decline on the same period last year.

The remaining billing business amounted to 680 million

USD, which was a 26% decrease on the same period

last year, and unnamed address advertising amounted

to 150 million USD, down 37.1% from the same period

last year. Letter media revenue totalled 1.45 billion USD,

representing an increase of 9% on the same period last

year, and revenue from creative products totalled 1.06

billion USD, representing an increase of 73% on the same

period last year.

CHINA POST

DIRECT MAIL DURING COVID

A UPU Direct Marketing Advisory Board (DMAB) report |

Analysis of basic mail, mail

media and mail products

(creative products) business

Basic letters currently cover

four types of business: business

letters, postage postcards,

bills and unaddressed

advertisements.

Business letter business: Business

income continued to decline, mainly for three

reasons: rst, there was the inuence of the

Internet and mobile network new media, while

the traditional paper media market continued

to shrink. Many business-letter customers

reduced their use of paper-based publicity

as a result; second, owing to the impact

of COVID-19, provincial postal companies

were unable to physically visit customers to

develop new business; and third, in August

2020, the national postal protection network

action meant that postage machines could

not be used on a daily basis, oine branch

oces were unable to organize activities

related to postage machines, and online sales

channels had to be closed.

Postage postcard business: Owing to

the impact of COVID-19, the demand for bulk

customization of postcards of travel tickets

and scenery has decreased signicantly,

resulting in a decline in revenue from such

business.

Billing business: With the rapid

advancement of electronic billing by banks,

the traditional paper billing business shrank,

resulting in a decline in postal billing revenue

in all provinces across the country.

Letter media business: In the control

period of COVID-19, provincial postal

companies actively developed project

marketing, took advantage of the postal

letter franchise, and developed online and

oine promotion projects such as epidemic

prevention, resumption of work and business.

Meanwhile, China Post actively promoted

the car premium insurance project through

live broadcast and other means, resulting in

signicant revenue growth.

Letter goods (cultural and creative

products):

The theme “50

Anniversary of

the First Sputnik” and other hotspots of social

concern, themed and serialized research and

development of cultural products, income

from cultural and creative products continued

to grow. Meanwhile, we tried to promote the

marketing of cultural and creative products by

means of “live sales”. In August, the “Postman”

programme was broadcasted three times,

with total sales of 210,000 renminbi (RMB).

Overall, the revenue from the traditional basic mail

business continued to decline owing to the shrinking

market and the impact of COVID-19. However, because

of the inuence factors, namely online communication

and hotspot marketing, the overall revenue of the new

mail media and cultural and creative products continued

to increase.

China Post’s direct mail

business development

under COVID-19

In January 2020, COVID-19 broke out in Wuhan,

China, and spread rapidly across the country with

the nationwide movement of people caused by the

Spring Festival, an important traditional Chinese event.

The Chinese government, respecting the the right to

live of every citizen, decided to impose the strictest

containment on 1.4 billion people in order to avoid the

life-threatening eects of the virus. China Post and all

related units in the direct mail industry chain actively

explored the development mode under COVID-19,

ghting the epidemic in various ways with the idea

| COVID-19, Posts and direct marketing

of helping to stem the epidemic, serving society and

generating income, and continued to provide direct mail

services by various means.

The fourth China Postcard Cultural and

Creative Design Competition.

The 2020

design contest was held online, with a special theme

“Go Wuhan! Go China!” We were seeking postcard

designs conveying warmth and friendship in the face of

COVID-19, a major catastrophe that has aected human

security around the world, documented by direct mail

products.

“I am the master of my own health”

collection of hand-drawn illustrations

from Guangzhou, Hong Kong, China and

Macao, China.

Guangzhou Primary and Secondary

School Health Promotion Centre and Guangzhou Post

Oce jointly organized the rst “I am my own little

master of health” collection of hand-drawn illustrations

in Guangzhou, Hong Kong and Macao. The best

drawings were selected and made into postcards, which

were mailed to primary and secondary school students

throughout the city to promote the knowledge of

emergency prevention of diseases and to enhance the

awareness and ability of minors to protect themselves.

Development of COVID-19 protection

leaets.

Through telephone communication,

Shaoguan Lechang City Branch of Guangdong Province

designed and produced COVID-19 protection leaets

and brochures for the Public Security Bureau of Lechang

City and Lechang Prison, generating income of 36,000

RMB and 15,000 RMB, respectively.

China Post direct mail

development exploration

Billing business exploration.

Shanghai Post designed the “registered

appointment” voting project for the credit

card centre of the Agricultural Bank of China.

In 2019, Shanghai Post’s revenue from the

registered appointment postal service was

46.929 million RMB. In addition, from January

to July 2020, the revenue was 22.835 million

RMB. In August 2020, China Post Group

and the Agricultural Bank of China signed a

“total-to-total registered appointment mailing

service” agreement to promote the registered

appointment mailing service in postal

companies nationwide.

Letter media advertising

exploration.

China Post and Tencent

carried out the advertising cooperation

projects “Nearby Push” and “Circle of Friends”.

During the heavy COVID-19 months (January

to March 2020), the Chinese government

implemented a strict ‘’closed” campaign. A

management style approach was adopted,

and with the exception of medical personnel,

government sta and necessary livelihood

security personnel related to epidemic

protection, all people stayed at home and

were not permitted to go out. Consequently,

they browsed WeChat friend circle and

watched “TikTok” and other popular Chinese

video apps, such as “Kuaishou”. Short video

apps have become a new habit for many

people staying at home, and China Post looks

for online direct mail advertising development

opportunities arising as a result. For instance,

“Nearby Push” is a new WeChat friend circle

advertising product launched by Tencent in

2020, mainly targeting local small businesses

and providing a full set of friends’ circle

advertising with solutions, mainly oering

discounts or coupons. China Post Group

cooperated with Tencent and launched the

“Nearby Push” mail media advertising service

in August, combining the characteristics of

postal services.

Cases: Zhejiang Post successfully

developed 45 single “near push”

business

Success case 1: Wenzhou Post marketing A

Chuan shing village Europe City shop and

station shop, targeting push advertising for

the 19-49 age group, all gender directional

delivery, a total number of views of 330,000,

2500 times the total amount of preferential

receive, and a business income of 4,000 RMB.

Success case 2: Yiwu City Mall School is a

private boarding school, and this year, through

the Yiwu Post friends of the advertising

project, 35,000 RMB was generated.

A UPU Direct Marketing Advisory Board (DMAB) report |

The new era of China Post

direct mail development

thinking

The rapid development of the Internet, especially mobile

Internet, has given birth to the Internet economy,

from which all kinds of emerging industries, such as

“WeChat circle of friends advertising”, “live streaming”

and “museum culture and economy”, have derived. Key

opinion leaders (KOLs), such as “Li Jiaqi, Viya”, “the Palace

Cultural Creativity” and other phenomenal characters

and products, have also entered this digital market.

As a new type of advertising communication method

that emerged in the 1990s, China Post direct mail must

actively seek a path of sustainable development, to

innovate, transform and integrate big data and new

media, creating a new type of direct mail in the new era

in the face of the walled development of the Internet

economy.

Building China Post’s direct mail

brand.

Combined with the development

of the technology, building the “China Post

Media” brand by putting China Post’s mail

media business as the centre and combining

new media and big data technology to

promote the “China Post Media” brand and

make it the representative brand of China

Post’s direct mail in the new era.

Innovative direct mail business. On

the basis of traditional direct mail basic-letter

business (business letter, postage postcard,

bill, no-name address advertisement), China

Post will integrate new media, studying

the digital transformation of direct mail

business, and speed up the digital function

transformation of postage postcard and

business letters.

Precision marketing. With the goal

of increasing customer revenue, we focus

on improving precision marketing of direct

mail. Based on traditional postal address

advertising, we use big data analysis to rene

the target group of advertising and accurately

deliver commercial letters and unaddressed

advertising.

Open-minded development

thinking.

The UPU has rich postal

operation and management experience, and

China Post Direct Mail has been holding

the principle of development in learning,

actively learning the advanced thinking and

cases of postal direct mail from dierent

countries. COVID-19 is a major emergency

faced by humanity, conrming that only

with the concerted eorts of postal unity

and cooperation, can humanity better cope

with and solve the diculties caused by the

epidemic. We hope that UPU will continue to

lead members countries’ eorts to deal with

the COVID-19 crisis, building neutral online

platforms and providing data support services

for members’ countries to help them expand

their cross-border direct mail products and

customer base. Under the leadership of the

UPU, China Post Direct Mail will continue to

explore better ways and means of direct mail

development, so that all members’ countries

can share the achievements of direct mail

and promote the continuous development of

postal services.

| COVID-19, Posts and direct marketing

Mr Festus Hangula,

CEO of Namibia Post

(NamPost), asserted that

direct marketing could

be used to harness the

digitalization opportunities

created by the COVID-19

pandemic, especially in

the face of declining mail

volumes. The pandemic

has resulted in increased

teleworking, home

schooling and online shopping, and increased Internet

access in general. Consumers are actively forming new

purchasing behaviours and brand relationships, thus

creating more opportunities for e-commerce and direct

marketing. A post-COVID era will continue to propel the

digital transformation and reshape the online mindset of

consumers.

Direct mail is perhaps the most eective way of reaching

consumers and introducing them to a new product

or service, and easily complements other forms of

marketing.

NamPost sees an opportunity for direct mail, as

consumers are spending more time at home. NamPost

oers hybrid services with growth potential, including

the printing and delivery of direct mail materials, such as

leaets. Indeed, the mailbox oers an ideal path to cut

through the clutter and gain the undivided attention of

valuable customers and household decision-makers.

In addition, postal direct marketing can play an

important role in the country’s economic recovery by

lling the place of face-to-face marketing, with Posts

serving as a direct channel of communication through

post boxes.

SMEs’ use of the Post to market their products is limited

in Namibia, but has been identied as an area of

future growth and will be a key element of NamPost’s

e-commerce strategy. NamPost plans to recoup lost

revenue through the launch of discounts for new mailers,

limited time oers, and complimentary services for both

new and current customers.

NAMIBIA POST

THE IMPORTANCE OF DIRECT

MAIL DURING THE PANDEMIC

A UPU Direct Marketing Advisory Board (DMAB) report |

The past year has been extraordinary for the United

States Postal Service® (Postal Service™) — presenting

unique challenges, revealing hidden strengths and

demonstrating our essential role in the life of the nation

and in the lives of the American public. The Postal

Service™ provides a vital public service that is a part

of this nation’s critical infrastructure. To address the

unique challenges faced, in March 2020, the Postal

Service established a dedicated Coronavirus Disease

2019 (COVID-19) Response Command leadership team

that is focusing on employee and customer safety in

conjunction with operational and business continuity

during this unprecedented pandemic.

During this national emergency, the Postal Service is

rmly committed to fullling its mission to bind the nation

together and serving as a source of constancy and

reliability in every community. Our more than 630,000

employees are working to make sure our customers can

depend on us. We are on the front lines — delivering

needed medicines, supplies, benet checks, nancial

statements, and the important correspondence every

family counts on. The Postal Service is able to reach

160 million delivery points, 137.5 million of which are

households, to share the message of public safety. With

more people working from home, our carriers are a

trusted reminder of a sense of normalcy, and they are

a conduit to consumers’ relationships with retailers and

businesses.

The Postal Service’s Fiscal Year (FY) 2020 nancial results

were signicantly impacted by the COVID-19 pandemic,

which increased customer demand for package

delivery services while exacerbating ongoing declines in

traditional mail services. In addition, the Postal Service’s

ability to manage its cost structure was challenged

due to stang shortages, transportation shortages,

and increased expenditures for personal protective

equipment (PPE) and cleaning supplies.

The Postal Service is at the core of the $1.6 trillion U.S.

mailing industry that employs more than 7.3 million

people. These mail categories brought in most of the

Postal Service’s operating revenues in 2019 and in 2020

respectively:

2019 2020

Operating

Revenue

$71.1

billion

$73.1

billion

First-Class

Mail

$24.4

billion

$23.8

billion

USPS

Marketing

Mail

$16.4

billion

$13.9

billion

Shipping

and Package

Services

$22.7

billion

$28.5

billion

Periodicals

$1.2

billon

billion

Source: USPS Postal Facts

First-Class Mail® and USPS® Marketing Mail continued

to provide the majority of the Postal Service’s operating

revenue in FY 2020. As a percentage of operating

revenue, First-Class Mail and USPS Marketing Mail

combined represented approximately 51.5 percent of

revenue, down from approximately 57 percent for the

same period in 2019. Combined First- Class Mail and

USPS Marketing Mail volume represented slightly over

90 percent, down from 91.6 percent in FY 2019.

USPS Marketing Mail volume was 75.7 billion in 2019.

Consumer and business responses to the COVID-19

pandemic resulted in a surge in package volume,

beginning in late March 2020. As a result, FY 2020

Shipping and Packages revenue surpassed those of

First-Class Mail for the rst time.

U.S. POSTAL SERVICE

–

IMPACTS OF COVID

19, RESPONSE

AND INNOVATION: BRINGING

A SENSE OF NORMALCY IN

UNCERTAIN TIMES

| COVID-19, Posts and direct marketing

The USPS Marketing Mail category is typically used for

direct advertising to multiple delivery addresses and

may include advertising, newsletters, catalogs, small

marketing parcels, and other printed matter. Revenue

from Marketing Mail was

$13.9 billion, $2.1 billion below the planned amount, due

to lower-than-expected volume, and the vast majority

of this shortfall occurred in the second half of FY 2020.

In Quarter 3 for example, when compared to same

quarter last year, Marketing Mail revenue declined by

37.2 percent and volume declined by 36.4 percent.

The declines experienced in FY 2020 were signicantly

exacerbated by the eects of the COVID-19 pandemic.

For the three months ended December 31, 2020 (i.e.,

Quarter 1 of FY 2021), Marketing Mail revenue decreased

$246 million, or 5.6%, and volume declined 788 million

pieces, or 3.9%, compared to the same period last

year. For the three months ended December 31, 2020,

revenue and volume from political and election mail

increased by nearly $400 million and more than 2.3

billion pieces compared to the same period last year,

due to the mailings associated with the 2020 general

election. If not for the positive impact of political and

election mail, Marketing Mail revenue and volume would

have decreased by an even greater extent for the three

months ended December 31, 2020, reective of the

continuing migration to digital and mobile advertising

that has been accelerated by the COVID-19 pandemic.

Looking to FY 2021, USPS Marketing Mail volume is

expected to decline by approximately 9.5 billion pieces

compared to FY 2020, the remaining decrease primarily

due to increased competition from electronic media and

the ongoing eect of the pandemic. Marketers continue

to leverage technology to better target customers and

increase their investment in digital advertising at the

expense of hard-copy media, and the pandemic appears

to have accelerated this trend. The pandemic had an

immediate, signicant, negative impact on Marketing

Mail volume beginning in mid-March 2020, although

volume recovered somewhat later in the year, driven by

increased amounts of political and election mail.

Nonetheless, USPS Marketing Mail continues to provide

proven value and return on investment. The Postal

Service intends to continue eorts to further improve

the value of USPS Marketing Mail by enhancing it with

innovations such as Informed Delivery®.

As noted, customer usage of postal services continues to

shift to substitute products and digital communication,

a trend that has been further exacerbated by the

COVID-19 pandemic as more businesses have had to

operate remotely due to quarantines, shelter-in-place

orders, and travel restrictions. However, given the

uncertainty of the COVID-19 pandemic, the long-term

impact on these shifts is unclear. First-Class Mail, such as

the presentment and payment of bills, has been eroded

by competition from electronic media, driven by some

of our major commercial mailers that actively promote

the use of online services. Marketing Mail has recently

experienced declines due to mailers’ growing use of

digital advertising including digital mobile advertising.

The volume of our Periodicals service continues to

decline as consumers increasingly use electronic media

for news and information. Periodicals advertising has

also experienced a decline as a result of the move to

electronic media.

Shipping and Packages normally experiences its highest

volume during our rst quarter each year, but in 2020,

the surge in electronic commerce (ecommerce) due

to the COVID-19 pandemic resulted in much higher

Shipping and Packages volume during each of our third

and fourth scal quarters than during our rst quarter.

While this surge may subside as the economy reopens,

we believe that ecommerce will remain increasingly

popular with consumers, which will sustain elevated

demand into the future for our Shipping and Packages

services compared to prior years. We therefore expect

our previous Shipping and Packages seasonal trends to

resume after the pandemic fully subsides.

Despite increased uncertainty, the Postal Service

continued to proactively target opportunities to grow

its business. The Postal Service continued to focus on

its customers’ needs and has increased its investment

in mail and package innovation. The Postal Service

anticipates that the volume of First-Class Mail will

continue to decline in future years with the ongoing

migration to electronic communication and transactional

alternatives resulting from technological changes. To

address the long-term trend that such changes have

had on First-Class Mail revenue and volume, the Postal

Service has focused on providing new services and

innovations with USPS Marketing Mail. The Postal Service

has expanded service oerings, such as Informed

Delivery, which enables customers to preview mail and

packages scheduled to arrive, as a means of merging

digital and physical mail.

A UPU Direct Marketing Advisory Board (DMAB) report |

Additionally, one of the FY 2020 and FY 2021 Strategic

Initiatives is “Accelerate Innovation to Create Mailing

Customer Value and Increase Protability.” This initiative

seeks to increase revenue, customer satisfaction, and

engagement through sales, brand marketing, pricing,

product enhancements, and innovations programs that

sustain the value of the mailbox, accelerate innovation,

and grow Informed Delivery adoption by mailers

and households. This will help to improve customer

perceptions and the value of the mailbox, accelerate mail

innovation, and develop plans to support long-term mail

strategies.

The Postal Service’s COVID-19 Response Command

team’s strategic approach has focused on the health

and welfare of employees and customers and continuity

in the areas of operations, employees, business, and

customers. The Command team developed and issued

policies, plans, and procedures to ensure continued

high-quality service to the public, with employee and

customer safety at the forefront. To best serve customers,

having the latest information on impacts to service and

delivery is critical. The Postal Service implemented a

3x/week communications cadence with industry

associations throughout the crisis. The ow of

information between the Postal Service and its customers

has been key to managing during the pandemic.

Critical information for our residential customers,

business mailers, and international customers is

posted on www.usps.com® under “Business Mailer

FAQs”, “Small Business Resources”, and “International

Service Disruptions”. The Postal Service also focused

on supporting small businesses with outreach to assist

with mailing and shipping needs. In addition, the Postal

Service timely responded to complaints as an element of

the overall Customer Experience.

As part of our COVID-19 response, the Postal Service’s

Sales and Marketing teams promoted services that

provided opportunities for businesses to eectively

inform their customers of operating status, operating

hours, service changes, and delivery options. Our Sales

team introduced Every Door Direct Mail® (EDDM®) as

a means to communicate locally for curbside services,

takeout, and other important communications to

communities. Our Marketing team’s eorts showcased

the very important message – the Postal Service is here

for you.

Another example of the Postal Service’s unique

positioning and promotion involved enhancing the

relevance of political mail. While political mail has been

a major source of revenue for the Postal Service, mail

is still perceived as outdated by many, contributing

to a decline in mail volume across industries. With an

aggressive 2020 political mail revenue goal, the Postal

Service needed to make political mail relevant to a new,

rising generation of political strategists, driving awareness

of Postal Service mail innovations and mail’s inuence on

voters. The Postal Service launched a new Postal Service

political mail brand campaign during the 2020 election

season. The brand campaign allowed the Postal Service

to leverage new trends and reach younger, more digitally

savvy decision-makers.

The objective was to drive political mail use and establish

the Postal Service as a thought leader in political

communications. The Postal Service leveraged its trusted

brand and expanded it to engage a new generation of

campaign managers. With a research-based approach,

the Postal Service showed that mail is highly relevant to

campaigns and makes a meaningful impact with voters—

even the younger generations. This approach involved

direct mailings that drove to thought leadership assets,

such as the Political Mail Guide that explored dierent

voter types and why mail is impactful to them.

In an overly saturated digital landscape, the Postal

Service had the opportunity to dierentiate the political

mail channel and increase industry authority. Unlike

digital, mail provides a personal connection that is often

lacking in an omni-channel landscape, especially during

the pandemic. Political mail also has a new story to tell

because of the innovations and technologies that truly

allow for omni-channel integration.

The 2020 political mail brand campaign

included four lead generation direct mail

pieces; combined they drove a 103x Return on

Investment (ROI).

The Political Mail Guide piece drove a 337x ROI.

Retargeted direct mail had a 4.8% response rate.

The Postal Service sold a total of 4.7 billion

pieces in political mail volume, a 130% increase

over previous general election years.

| COVID-19, Posts and direct marketing

Through an omni-channel approach, direct mail

was responsible for driving 11% of total leads

generated and 24% of total revenue.

Direct mail revenue per lead was 4.3x higher

than any other channel (other channels were:

social, display, search, and email).

Online service oerings available through

www.usps.com have also enhanced the customer

experience by providing customer-focused applications

and services. Included in online services is Informed

Delivery, which enables customers to digitally preview

mail and manage package delivery. We continue to

enhance Informed Delivery so that businesses may

incorporate marketing campaigns and reinforce the value

of the printed mail piece. During 2020, the Informed

Delivery platform increased engagement with additional

messaging to its millions of subscribers, and customers

were signing up at record rates as mail became even

more relevant in their daily lives. The Postal Service’s

COVID-19 experience has expanded into other areas: for

example, the Postal Service has leveraged its network to

assist independent grocers and pharmacies in delivering

non-perishables and prescriptions.

During the pandemic, the role of mail for marketers

and businesses has amplied with changes in consumer

behavior and physical separation from one another.

In times of crisis, people value and appreciate trusted

sources of information and trusted ways to feel

more connected to one another. Creating a physical

connection through mail, as part of an omni- channel

campaign, can deliver a more meaningful customer

experience.

As indicated below in slides from our management’s

virtual presentations during last summer’s National Postal

Forum (NPF), the Postal Service notes some emerging

2020 COVID-19 trends in how the pandemic has aected

mailer behavior. Unique sector challenges are creating

opportunity to market using the mail. Small businesses

need business rejuvenation to sustain themselves

through the pandemic. The Postal Service is condent

that the programs and initiatives it has put in place will

help small businesses and retailers, and direct mail will

help bring results for business mailers.

Source: NPF Virtual 2020 Summer Series (July)

A UPU Direct Marketing Advisory Board (DMAB) report |

Considering the total advertising market, direct mail

is forecast to make up 7% and competes with digital

advertising spend, of which social media and search

categories make up 45% of the overall market. The

Postal Service is innovating mail to make it more

impactful to increase growth.

Integrative marketing improves many aspects that drive

consumer behavior – it is about making connections

with consumers more interesting and more engaging to

improve response rate. The Postal Service promotes its

innovations in direct mail featuring Informed Delivery,

promotions and incentives, and through academic

outreach to educate on the viability of direct mail in

the marketing mix. As of mid-2020, over 100 professors

at colleges and universities in the United States were

engaged with curriculum content and innovation

challenges for over 3000 students.

Business customers are leveraging Informed Delivery

to enhance customer communication. Informed

Delivery oers business mailers the opportunity to

engage users through an integrated mail and digital

marketing campaign that generates additional consumer

impressions, interactions and insights. Informed Delivery

provides eligible consumers with a digital preview of their

household’s mail every day. Informed Delivery users are

engaged, looking at notications daily. In addition to a

printed mail piece, Informed Delivery campaigns are a

way to promote timely, customized oerings and calls to

action. The digital impression is then reinforced with the

physical impression of the mail piece. Informed Delivery

oers a huge value to businesses and marketers, and

we are committed to spreading the knowledge about

proven integrated marketing strategies and techniques

that will benet every business as they work to meet the

needs of their customers in a timely manner.

Source: NPF Virtual 2020 Summer Series (July)

| COVID-19, Posts and direct marketing

During 2020, the Informed Delivery service piloted Mail Delivery Notication, designed to let consumers know when their

mail was delivered. Marketers will be able to embed an ad in the notication. Pilot programs include Package Campaigns to

give shippers the same capabilities as mailers, integration of Informed Visibility® features, and Piece-Level Campaigns that

will enable marketers to customize messages to individual recipients.

Marketers had new options in 2020. People are using these triggers to go from hard copy to digital. Digital combined with

direct mail are showing a 38% higher return on investment (ROI) than digital campaign alone.

Source: NPF Virtual 2020 Summer Series (July)

A UPU Direct Marketing Advisory Board (DMAB) report |

The Postal Service is encouraging innovation through promotions and incentives for integrating mail with new technology

and print techniques such as direct to digital implementation and opportunities to transform statements into a marketing

mail piece.

Source: NPF Virtual 2020 Summer Series (July)

| COVID-19, Posts and direct marketing

The Postal Service is leveraging analytics and data-driven

decision-making practices for business and service

decisions and customer experience. Customers are using

and relying on the visibility to manage their mailings.

Analytics have been instrumental in ensuring business

continuity for the Postal Service during the COVID-19

pandemic.

The Postal Service holds a diverse and growing set of

data assets: from nearly 5 billion geospatial breadcrumbs

captured daily while servicing 160 million delivery points;

to over 2.6 billion digital customer interactions through

www.usps.com; to over 142.6 billion mail piece images

delivered to approximately 28.9 million Informed Delivery

subscribers.

Informed Visibility Mail Tracking & Reporting (IV®-MTR)

is a near real-time, single source for all domestic-bound

mail and mail aggregate tracking information. For

customers, knowing when and where their mail is being

delivered – and what is being mailed back to them –

adds value to the mail, and mail is an investment. These

tools can be used to enhance and measure it.

Finally, the Harris Poll Essential 100 recently ranked

the Postal Service #1 in our business response to

the COVID-19 pandemic. A representative sample of

over 2,000 Americans were asked which companies

are the most “essential” to America by ranking their

resolve, integrity, responsiveness, and permanence. Our

customers see and feel the impact we have made in their

lives, and they continue to trust our industry because of

our responsiveness and reliability in serving their needs.

Sources: FY 2020 Annual Report to Congress — United States Postal

Service; Postal Facts 2019; Postal Facts 2020;

Quarter I, 2021 Report on Form 10-Q - United States Postal Service-22;

2020 Report on Form 10-K United States Postal Service; Report on

Form 8K November 13, 2020; Fiscal Year 2021 Integrated Financial Plan -

United States Postal Service; National Postal Forum 2020 Summer Series

Episodes https://2020summerseries.npf.org/series/previous-sessions/

series_summit;

www.usps.com; www.usps.com/business/informed-delivery.htm.

A UPU Direct Marketing Advisory Board (DMAB) report |

Like any other sector, the data and marketing industry

worldwide has been aected by the COVID-19 crisis. The

Global Alliance of Data-Driven Marketing Associations

(GDMA) provides for DMAs from all regions of the world.

In October 2020, it held a virtual meeting at which the

impact of the crisis on our industry and how DMAs are

responding to it was reviewed.

This article is an opportunity for GDMA to share its

key ndings.

Going digital

As for everyone else, the lockdown imposed by many

countries across the world has forced DMAs to rethink

the way in which they engage with their industry

at national level. Most DMAs organise events and

conferences as a way of keeping their members informed

and strengthening the community of marketers. In the

United States, the Association of National Advertisers

(ANA) turned over 94 committee meetings, 39 one-day

conferences and 13 national conferences into virtual

format in 2020. It also produced over 100 webinars and

dozens of podcasts.

All events had to be turned digital, but replacing a full-

day event with a full-day video conference needed to be

rethought in order to continue to provide high added-

value for participants. Some conferences have been split

into web series, or more targeted shorter events. In some

countries, this strategy has worked more successfully

than in others.

Online events also raise the question of the business

model. While many DMAs derive revenue from the

organization of events, including sponsorship, not all

participants are willing to pay for attending online events,

and in some countries, sponsors are still suspicious of

the benets of sponsoring such events. However, DMAs

identied opportunities in that area, and where able to

drive ideas from countries where the approach taken is

working. The mini-series of webinars has been a success

with the members of the German DMA (DDV), and

Sweden has established a model whereby participants

have to pay a small fee to access events organized

by the DMA (SWEDMA). However, there was mixed

feedback on how to create a revenue stream from

online events. Allowing sponsors to use online events for

lead generation has also helped generate sponsorship

revenues for the UK DMA.

In several countries, companies impacted by the crisis

and having to reduce their activities had the opportunity

to have employees on furlough. In the Netherlands

and the UK, among other countries, there was a strong

incentive for companies to invest in employee online

learning. DMAs oering education programmes have

seen a substantial decrease in classroom style training,

but an opportunity to increase their oer in online

training.

GLOBAL ALLIANCE OF

DATA

DRIVEN MARKETING

ASSOCIATIONS

(

GDMA

)

–

DATA

DRIVEN MARKETING

ASSOCIATIONS

(

DMAS

)

OF THE

WORLD SUPPORT THE INDUSTRY

TOWARDS THE “NEW NORMAL”

| COVID-19, Posts and direct marketing

Providing dedicated

services

In such challenging times, DMAs in each country have

gone above and beyond to support their industry. All

DMAs have enjoyed increased communication with

their members. And have developed specic activities to

respond to the needs created by the pandemic.

In Canada, the Canadian Marketing

Association (CMA) issued COVID-19 related

resources for consumers

to stay protected

when it comes to privacy, fraud and

misleading advertising, and publishes regular

blogs and resources on keeping up with

obligations in these areas on its marketing

connected webpage

. The DDV in Germany

produced many publications, including how

to work from home for call centres

The Federation of European Direct and

Interactive Marketing (FEDMA), which is based

in Brussels and whose mission is to represent

the industry towards European Union

institutions, launched a survey

on the impact

of COVID 19 on the industry, and held a

webinar in May about the situation in various

EU countries. It has also centralized available

studies and resources on its website

In the UK, the DMA has a section dedicated

to coronavirus and how the organization

can help the industry. To be even more

accurate, the DMA launched a survey

better understand the support the industry is

seeking.

In Argentina, AMDIA is focusing its public

aairs eorts on a new “work from home”

piece of legislation developed in the context

of the lockdown, which will signicantly aect

the data and marketing industry.

Some DMAs, such as in France with the

SNCD, or in the UK, helped their members

with administrative processes, such as how to

apply to government schemes and recovery

packages.

This increase in communication and dedicated

services has allowed many DMAs to establish their

leadership in the market. In some countries, the

DMA has the opportunity to act as an intermediary

with the government, such as the DMA in the UK,

which organizes regular meetings with government

departments, thus ensuring that the industry‘s voice

is heard, while having as much visibility as possible on

the governmental decision ahead. FEDMA addressed a

letter

to the European Commission, both on the impact

of the pandemic on our industry as well as on data’s role

in the economic recovery.

DMAs seized the opportunity to conduct a study on the

economic impact of the COVID-19 pandemic, such as

its impact on marketing budgets (in Finland)

, the use of

data in the COVID-19 crisis (in France)

, or a report on

how COVID-19 changes the business operations of DDV

members permanently (in Germany)

, providing DMA

members with information on the economic situation,

how to benet from government loans, and companies’

obligations (health and safety measures).

Fullling our mission

It may seem obvious, but the last GDMA meeting

demonstrated that the most important action a DMA can

do in such times of crisis, is to continue to full its mission

of helping the industry.

During the three days of GDMA sessions in November

2020, representatives from all over the world

continuously demonstrated how they are able to carry

on delivering on their objectives, despite the challenging

times. While ensuring the support of their members in

this time of need, DMAs continue to address issues such

as new legislative challenges, answering government

and public authorities’ consultations to ensure the

voice of the industry remains prominent, monitor

government enquiries such as the review of customer

loyalty schemes in Australia, or the digital advertising

services enquiry in Australia, the reform of the Personal

Information Protection and Electronic Documents Act

(PIPEDA) in Canada, the newly adopted Protection of

Personal Information Act (POPIA) in South Africa, or

the implementation of the General Data Protection

Regulation (GDPR) in Europe.

A UPU Direct Marketing Advisory Board (DMAB) report |

If anything, 2020 is a continued demonstration of the

importance of data in today’s and tomorrow’s world.

The data and marketing industry plays a crucial role in

helping marketers to eectively communicate reliable

information and services to individuals increasingly

seeking to navigate these dicult times, and to stay safe

and healthy. And with data comes Data goes hand-in-

hand with data protection and privacy, and DMAs across

the world are making tremendous eorts in developing

ethical rules for our industry in order to sustain consumer

trust. During the GDMA sessions, no fewer than seven

DMAs from all parts of the world shared new initiatives

on the development of national and regional codes of

conduct, certication mechanisms, and privacy training

initiatives to help the industry handle data responsibly.

Looking ahead

Along with the rest of the global economy, the data

and marketing industry is struggling with the economic

crisis as spending on advertising is heavily impacted.

Nonetheless, our industry plays a crucial role in helping

marketers to eectively communicate reliable information

and services to individuals increasingly seeking to

navigate these dicult times and to stay safe and healthy.

DMAs all agree that 2020 is a turning point. The

pandemic is likely to leave a substantial mark on how

society lives, works, travels and consumes, and no “going

back to normal” should be expected. Reaching the right

audience in this context is particularly important for

small and medium-sized enterprises, which are trying to

survive in a highly competitive environment.

Embracing these rapid changes, DMAs have already

engaged discussion on what the world of tomorrow

will look like, the ever-increasing role of data, and the

opportunities data will generate for innovation and

business. Privacy, data protection and consumer trust

are keys to the sustainability of the data and marketing

industry and are the core of DMAs’ expertise. In addition,

issues such as social challenges and environmental

concerns will also play an increasing role in the coming

years, and thus must be part of the GDMA’s discussions

in order to be integrated in our industry’s long-term

vision.

“While COVID-19 has severely impacted the world’s

economies, the data and marketing industry has stood

ready to boost businesses in their digital transformation,

and in maintaining their relationship with customers

in these times of lockdowns and connements. DMAs

have been instrumental in supporting the industry in

their respective countries. Grasping the changes and

opportunities ahead, the GDMA is ensuring that the

data and marketing industry will be able to seize all

opportunities the new normal will hold.” (Martin Nitsche,

President, GDMA)

| COVID-19, Posts and direct marketing

How do you see the impacts

of the pandemic on the postal

business at large and the

envelop industry and direct mail

in particular?

We see that the COVID-19 pandemic promotes digital

substitution: home oce, home school and e-commerce

are all currently necessary, and they are all digital.

Enterprises turn from invoicing by letter mail to PDF-

invoicing. As part of cost saving, advertising expenditures

are reduced (in total and/or by switching to digital

media).

Mail is still a key source of revenue for Posts, but is no

longer the largest revenue source in many countries.

Transactional mail is continuing to decline, and marketing

mail is declining even more. We need a recovery.

Envelopes and letter mail are complementary.

E-commerce is now driving

a change in packaging and

mail formats

Retailers are now adept at quick order and delivery.

The “doorstep” has become the new battleground as

consumers want their purchases delivered at home or

the oce, but many DOs prefer delivery into “parcel

boxes”. Posts seem to be focusing on global supply

management and merging mail and parcel businesses.

We are seeing the biggest declines in marketing mail.

Our concern is that the marketing budget will be/

has been transferred from marketing mail to digital

media and may not come back in the future. Nothing

says, however, that this is the end for the envelope

manufacturing industry; it is, perhaps, the end of the

beginning.

The Post is in transition towards a global delivery

company with parcels over mail. Direct mail is coming

back. First-class mail is falling. Process integration is the

name of the game. Hybrid converters are emerging.

What is the situation of the

envelope manufacturing

industry?

There are fewer envelope companies. More envelope

companies are making more than envelopes. Many

are multifaceted production organizations. They are

printers, packagers, form/label companies, and oce

products suppliers, since the home oce has become

a booming industry for oce products. Envelope

machinery footprints have changed. They have become

smaller and more intelligent. It is more of an inspector/

operator driven machine with a great deal of technology.

Some 75% of e-commerce shipments weigh below 2

kilogrammes. We are in the middle of a lightweight

packaging revolution.

THE PERSPECTIVES OF THE

GLOBAL ENVELOPE ALLIANCE

(

GEA

)

IMPACT OF COVID

ON THE CURRENT AND FUTURE

ENVELOPE BUSINESS AND

SPECIFICALLY MARKETING MAIL

A UPU Direct Marketing Advisory Board (DMAB) report |

The envelope industry

in North America

60 converters.

138 billion in sales volume as of 2020,

1.83 billion USD in sales.

Sales are on a long slow recovery from

the pandemic.

Raw materials will be in tight supply.

The envelope industry in Japan

Japan has ve envelope manufacturers of

some size and a few more small companies.

Japan reports its data dierently. In Europe

and the US data are researched by the

envelope associations, while in Japan the

data are provided by Japan Post. For the

rst half of 2020, a decline of 7.5% of total

mail was recorded.

The envelope industry in Europe

In Europe, the big four have now become

the big three, with many smaller companies.

The pyramid is narrowing at the top and

broadening at the bottom.

Europe has seen a 19% decline in envelope volumes

rst half-year over rst half-year 2020, according to the

European Federation of Envelope Manufacturers (FEPE),

whose data represents 85% of the envelope market in

Europe.

In the rst quarter of 2020, the market declined by

1.7 billion envelopes in Europe, and in the second

quarter by another 2.9 billion.

Looking at these numbers on a quarter-over-quarter

basis and comparing them to the rst quarter of 2019,

the rst quarter saw a 13.1% decline and the second

quarter a 25.7% decline.

How do you see the future in

the context of the pandemic?

Where do we go from here?

We are all declining at the same rate, but our markets

are heavily inuenced by COVID-19 and digital

substitution. We hope to come out of this downturn by

next spring, but things will be dierent.

We must focus on selling to value; volume is going to

be hard to reckon with. We will emerge, we will prosper

again, but we must reect on and learn from the current

period.

The envelope manufacturing industry will continue its

adjustment of the capacities and its market consolidation.

Digital equipment will make more headway in the

industry, and most plants will become fully digital over

the next ve years. We will shift from a volume-based

business proposition to one based on value-added. We

will all make more than envelopes and become more

diversied over the next ve years.

What recommendations do you

make to your members?

Stay close to the national Post. The UPU and

International Postal Corporation (IPC) will be important

and be in contact with the Global Envelope Alliance.

We must devote time and attention to intelligent

products as we look to become a more signicant part of

the marketing channel.

Digital technologies, such as augmented reality, near-eld

communication (NFC) and the Internet of Things (IoT),

will be central to our value proposition.

We will continue to make standard envelopes, but it will

be more challenging to make a living from them.

We need to learn from one another and grow our global

platform.

| COVID-19, Posts and direct marketing

How do you see the

collaboration between the

UPU DMAB and the envelope

industry going forward?

Again, envelopes and letter mail are complementary.

The Posts are dening the guidelines. Therefore, the

strategies of the UPU members set the priorities for

the envelope industry worldwide. We see DMAB as an

important platform for learning from the Posts how they

plan to operate in the future. Will marketing letter mail

remain in the business focus of D?

This is obviously a major concern for our members.

A UPU Direct Marketing Advisory Board (DMAB) report |

KEY

TAKEAWAYS:

DIRECT MARKETING

AND THE WHOLE

VALUE CHAIN HAVE

BEEN AFFECTED BY

THE CRISIS BUT ARE

PLAYING A ROLE IN

THE NATIONAL AND

LOCAL ECONOMY;

DIRECT MARKETING

REMAINS AN

IMPORTANT BUSINESS

LINE FOR POSTS;

INNOVATION AND

DATA WILL BE KEY

COMPONENTS IN

THE POST

COVID

DIRECT MARKETING

REALITY;

THE PANDEMIC HAS

ACCELERATED THE

NEED FOR INCREASED

OFFLINE AND ONLINE

INTEGRATION IN

DIRECT MARKETING;

DIRECT MARKETING

WILL PLAY AN

IMPORTANT ROLE IN

THE POST

COVID

ECONOMIC RECOVERY

AND WILL SUPPORT

THE GROWTH OF

SMES;

DIRECT MARKETING

WILL CONTINUE TO

PLAY A CRUCIAL

ROLE IN HELPING

MARKETERS TO

EFFECTIVELY

PROVIDE RELIABLE

INFORMATION

AND SERVICES TO

INDIVIDUALS AND

COMPANIES.

| COVID-19, Posts and direct marketing

About the

Direct Marketing

Advisory Board

(DMAB)

A UPU Direct Marketing Advisory Board (DMAB) report |

The Direct Marketing Advisory Board (DMAB) was

created in 1995 as the rst UPU body to formally

include members from the private sector. It comprises

designated operators (postal members) and private-

sector companies and associations (non-postal

members).

DMAB MISSION

The mission of the DMAB is to foster the growth of direct

marketing through the Post by positioning designated

operators as important direct marketing channels

and contributing to economic and market expansion

by increasing market knowledge and developing the

expertise of stakeholders at all levels.

Membership value proposition

The DMAB provides its members with training, research,

communications and networking opportunities to

promote and support postal direct marketing activities

and preserve the value and volume of mail.

Publications

The Direct and Digital Marketing Guide for Developing

and Least Developed Countries is designed to help

designated operators of UPU member countries develop

their direct and digital marketing services. It is free to

download

from the UPU DMAB website.

Projects

Direct Marketing Postal Platform – The postal

solution for successful cross-border direct marketing

campaigns.

Newsletters and LinkedIn group

Newsletter: Four issues have been published yearly

since 1999, with more than 1,200 recipients.

LinkedIn: The UPU – Postal Direct Marketing Group,

which has more than 300 members, is available at

www.linkedin.com/groups/7457750/.

Workshops and events

The Innovation Talk series

of interactive webinars was

created in 2020, focusing on

data-driven marketing. With

up to 200 participants, the

sessions have demonstrated

the value of the DMAB and the

relevance of direct marketing

in the digital era.

24 workshops held in

22 countries with more than

1,000 participants from 1997

to 2019

24 presentations delivered at

direct marketing events from

2004 to 2019

34 mini-conferences held in

Berne on various themes from

1995 to 2019

Universal Postal Union –

Direct Marketing Advisory

Board (DMAB)

UPU Direct Marketing Advisory Board:

www.upu.int/en/Universal-Postal-Union/About-UPU/

Cooperatives-boards/Direct-Marketing-Advisory-Board

Direct Marketing: www.upu.int/en/Postal-

Solutions/Programmes-Services/Direct-Marketing

Contact: [email protected]

Direct Marketing Advisory

Board (DMAB) members

CHINA DIRECT MAIL

ASSOCIATION

Ratans LLC

Digital Transformation

| COVID-19, Posts and direct marketing

Endnotes

1 www.ipc.be/services/market-research/cross-border-

shoppersurvey

2 antoancovid.vn

3 https://vpostcode.vn

4 https://www.the-cma.org/consumers/Protect-Your-

self-during-COVID-19

5 https://www.the-cma.org/regulatory/marketing-connected

6 https://pegase.upu.int/Workspace/Users/upu.prosserm/

Umfrage deckt viele Vorteile der Homeoce Arbeit in

Call-Centern auf

7 https://www.fedma.org/2020/03/fedma-launches-a-survey-to-

understand-the-impact-of-the-covid-19-outbreak-on-the-data-

marketing-industry-in-europe/

8 https://www.fedma.org/2020/04/fedma-centralises-national-

information-on-the-impact-of-covid-19-on-the-data-market-

ing-industry/

9 https://dma.org.uk/research/dma-coronavirus-survey-tell-

us-how-the-dma-can-help-you

10 https://www.fedma.org/wp-content/

uploads/2020/05/20200514-Data-marketing-indus-

try-and-covid-19.pdf

11 https://www.fedma.org/wp-content/uploads/2020/04/

Impact-of-COVID-19-on-marketing-budgets-2020-Finland-

and-Sweden-ASML_IAB_Avaus.pdf

12 https://services.message-business.com/v3/front/

contents/2/695/43695/Files/De l’utilisation de la DATA en crise

Covid.pdf

13 https://www.ddv.de/corona-veraendert-den-geschaeftsbetrieb-

der-ddv-mitglieder-nachhaltig.html

14 https://www.upu.int/UPU/media/upu/publications/guideForDe-

velopingAndLeastDevelopedCountriesEn.pdf

UNIVERSAL POSTAL UNION

International Bureau

Weltpoststrasse 4

P.O. Box 312

3000 BERNE 15

SWITZERLAND

Tel: +41 31 350 31 11

Email: direc[email protected]