Tag: North America

Are postal catalogues finished?

Posted by | Jul 28, 2008 | |

One respected industry analysis firm estimates that one in four UK mail order companies are now operating at a loss. Of nearly 900 mail order companies analysed, over 200 are currently rated by Plimsoll as being ‘in danger’. Jotham Danquah MD of Zmags (UK) explains more.

Many of the industry’s problems are converging at exactly the same moment – high inflation in raw materials, printing costs and transport are all combining with an economic downturn which was reflected in June’s record 3.9 per cent drop in retail sales (the highest drop ever recorded).

The key question therefore is whether postal mail order as a business model is doomed? Bloomingdales, the famous US retailer seems to think so. The company recently announced that it sees no future in postal mail order and is quitting it altogether in 2009. Given that Bloomingdales is owned by Macy’s, the second largest US retailer, such a move is not insignificant.

What has driven Bloomingdales’ decision? Online mail order. After all, why spend millions printing and distributing catalogues when the internet is readily available at a fraction of the cost? Bloomingdales expects USD 1 billion in internet sales this year alone which is not far behind its high street retail sales figure.

The internet is now transforming the mail order industry as demonstrated in the UK by Littlewoods Shop Direct (the UK’s market leader) where one in three sales are now made online. In fact, Littlewoods expects online orders to represent half of all sales by 2009. This is the future.

A key part of this transition to the internet is the growth of online digital page-turning software. These solutions, of which Zmags is one example, are downloaded quickly, are fully functional and offer a few advantages over postal catalogues. One example? Page-turning software can incorporate still photos that come to life and move as embedded video when clicked-upon.

Furthermore, catalogues are easily transferred online using pdf software conversions. It’s a straightforward process that transforms a postal catalogue into a digital page-turning version within the space of a few minutes. Free trials are readily available through most providers.

In short, digital catalogues offer an especially powerful way of tapping into the power of the internet and harnessing its ability to generate catalogue sales.

What are the cost advantages? Well that depends on factors such as list costs, email broadcast etc but as a rule digital catalogue versions cost 10 per cent of the postal catalogue costs. With the mail order industry working to 2% pre-tax margins that’s a critical cost saving.

The postal catalogue is not finished – far from it because people will always want to read a hard copy from the comfort of their sofa. However, postal mail order is coming under severe pressure from two sides: catalogue production/distribution inflation on one side and the rise in internet sales from the other. For the above reasons, I expect postal catalogues to continue their decline with digital catalogues taking their place.

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Magazines Canada makes recommendations to Canada Post review panel

Posted by | Jul 28, 2008 | |

A delegation of representatives from Magazines Canada met with the Canada Post strategic review panel in Toronto to provide six recommendations on what the crown corporation should to do to strengthen its relationship with and improve services for the Canadian magazine industry.

– There should be a “postal contract” between Canada Post and the Federal Government to clarify the crown corporation’s roles and responsibilities.
– An independent regulator should be created to ensure compliance with the “postal – contract” and provide for arbitration of disputes.
– Lettermail rates should rise with actual delivery costs.
– Rate increases should be transparent, timely and predictable.
– Competition should be introduced in magazine delivery.
– istance-related pricing should be put on hold pending the panel’s report.
The delegation also pointed out two key characteristics that make Canada’s magazine industry and mail services unique:

The size of Canada’s landmass relative to the small and dispersed population.
Competition from American magazines due to our proximity to the world’s largest exporter of magazines.

Magazines Canada will submit comprehensive proposal to Canada Post in September. This will also go out to Magazines Canada members.

The Canada Post panel will complete its review in December 2008.

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DMA's Prescott presents UPU Consultative Committee Chairman's report at 24th Universal Postal Congress in Geneva

Posted by | Jul 28, 2008 | |

Direct Marketing Association (DMA) Vice President of International Development Charles Prescott is attending the 24th Universal Postal Congress in Geneva, Switzerland. Prescott also is the chairman of the Universal Postal Union’s (UPU) Consultative Committee (CC).

During his report to the Congress on CC activities, Prescott announced that the Committee, during the next four-year cycle, would focus on address systems and change of address systems, as well as the related subject of sustainable development.

“Addresses are the structural core of the postal system,” Prescott told delegates convened in Geneva. “Consequently, the availability and accuracy of addresses are critical elements in the health of both domestic systems and the international postal network.”

“They are a huge public good, and this asset is used for a large number of important societal purposes,” Prescott said. “In addition to communication, those purposes include land-use planning, public service delivery, emergency response, and so forth. During the coming cycle our Committee intends to explore in depth all the issues surrounding those two themes: available addresses, and accurate addresses.”

Additionally, Prescott said that the CC will focus on the environmental impact of poorly addressed mail, which is one of the UPU’s core postal strategies. Prescott referred to Postmaster General John E. Potter’s goal for the US Postal Service (USPS) to reduce by 50 percent the USD 2 billion problem of undeliverable mail in the US as an indication of the seriousness of the problem.

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Capital One, USPS in NSA dispute

Posted by | Jul 28, 2008 | |

The Postal Regulatory Commission may rule in August on the dispute between Capital One Services Inc. and the US Postal Service, regarding the issu¬ance of a contract between the USPS and the mailer that would provide customized pricing incentives.
Capital One filed a complaint about the negotiated service agreement (NSA) with the PRC on June 19, alleging that the Postal Service “unduly discrimi¬nated” against the company because it was denied a NSA under the same terms as one granted to its competitor, Bank of America Corp.
Terms of the Bank of America NSA, which went into effect April 1, required multiple operational commitments from the company, including implementing the Intelligent Mail barcode and other auto¬mated sorting tools, as well as waiving the physical return of certain First Class Mail and Standard Mail pieces.
The USPS claims that Capital One’s proposed NSA was not identical to that of Bank of America, and that Capital One had not exhausted all good faith negotiations for an NSA before filing the complaint.
A Capital One spokesman declined to comment beyond the company’s com¬plaint filing, which states that the company was denied a NSA that was “functionally equivalent” to that of Bank of America.
Capital One further alleges that the NSA between Bank of America and the USPS used thresholds for mailing dis¬counts based on industry rates from 1998, rather than current NSA baselines.
The USPS has approved a total of nine NSAs, with one extension, since the opportunity began in 2002. Capital One received the first NSA, which was approved, in May 2003. The agreement granted the bank a discount rate on mail volume above an annual total of 1.225 billion pieces for a three-year term. The USPS receives between 50 and 100 requests for NSAs each year, according to a USPS spokesman.

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Is the postal sector an essential component of the global economy?

Posted by | Jul 25, 2008 | |

What better way of answering this question, the theme of today’s 24th Universal Postal Congress General Debate, than to take a look at the Brazilian Post’s Exporta Fácil programme.

This programme, launched in 2001 with the help of the Brazilian Government, has enabled 10,000 micro, small and medium-sized businesses to access international markets. It is now easier for Brazilian small businesses to export their goods to other countries, whether they are selling judo kimonos to Japan, mushrooms to Europe, or dog clothing to the United States.

As Brazilian Post’s Paolo Siciliano explains, the programme has cut down the red tape involved in cross-border trade. The previous 26 stages of the process have been reduced to three. The Ministry of Communication worked with Customs, the central bank and other players to make the administrative procedure more flexible. The ministry responsible for postal services also adapted the existing legislation to improve export conditions.

The programme was so successful it was adopted by the Peruvian Post. The Postal Union of the Americas, Spain and Portugal (PUASP) is currently working with the Brazilian Post and the Inter-American Development Bank, which has invested 1.5 million USD, on setting up similar programmes in Argentina, Ecuador and Uruguay by next year. As Serrana Bassini Casco Secretary General of the PUASP, points out, “This programme is strategically very important for the development of Latin America countries.”

The European Union will also be financing the implementation of a project linked to Exporta Fácil for Mercosud, the economic community for South American countries, says Wagner Moreira dos Santos, Under-Secretary responsible for postal services at the Brazilian Ministry of Communication.

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