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COVID-19, Posts and Direct Marketing A UPU Direct Marketing Advisory Board (DMAB) report | 1 A UPU - Direct Marketing COVID 19, Advisory Board POSTS and (DMAB) report 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 Copyright © 2021 Universal Postal Union All rights reserved 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 identified in this publication as being the copyright of a third party. Authorization to 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 E-MAIL: [email protected] TABLE OF CONTENTS 8 CHAPTER 1 – Posts and direct marketing: a global view 16 CHAPTER 2 – How has the COVID-19 pandemic affected the direct marketing industry? CHAPTER 3 – Has COVID-19 presented 22 any opportunities for the reinvention of direct marketing in the years to come? 26 CHAPTER 4 – COVID-19 and direct marketing: the views of postal operators and stakeholders in the direct marketing value chain 50 About the Direct Marketing Advisory Board (DMAB) A UPU Direct Marketing Advisory Board (DMAB) report | 5 Since the outbreak of the COVID-19 pandemic, Posts Posts have also taken the opportunity to roll out across the world have been working on the front lines of innovative products and services to support the response the public response to the disease. In addition to fulfilling of governments to the pandemic. This is the case of their traditional role as a logistics service provider, in social services, such as the delivery of medicines and the course of this pandemic, Posts have expanded medical supplies, and of new electronic and financial their social, financial and delivery services to assist services. 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. IMPACTS ON INTERNATIONAL AND Many Posts have continued to operate and provide a range of services against the background of DISRUPTED POSTAL restrictions on the movement of people and the SUPPLY CHAINS closure of international borders to prevent the spread of the pandemic. Posts have emerged as an essential The international light-logistics growth rate calculated by service and in a positive light in many countries the UPU shows that cross-border exchanges worldwide in response to the pandemic. The pandemic has have dropped by 21% since April 2020, which saw the amplified and augmented the two key facets of Posts’ outbreak of the crisis for all mail classes (letters, parcels value proposition: first, their role as delivery agents and express). of what may be deemed essential services, including communications (mail, including direct mail and parcels) In the specific case of the postal sector, an immediate and medicines, as well as social and financial services; and striking consequence of COVID-19 has been and second, their role as custodians of an essential widespread disruption to international supply chains, infrastructure composed of tangible (e.g. post offices) resulting from constraints imposed on international and intangible (e.g. local knowledge and trust) assets transport, in particular aviation, influencing international that enable and expedite the delivery of essential transport capacity. Another visible impact of the services. More than a new role for Posts, the pandemic crisis for cross-border postal exchanges has been has reinvigorated their existing value proposition to the increase in the time taken to clear items through governments and citizens. Customs, owing to additional inspections of both outbound and inbound items. This augmented value proposition sheds light on the unmatched assets of Posts in pandemic times and beyond: GROWTH IN DOMESTIC E-COMMERCE The near universal reach of the postal network, both domestically (physical COVID-19 has massively accelerated the growth of network, urban and rural reach) and e-commerce, with reported year-on-year total online globally (through the UPU treaty-based spending up 77% (Adobe study). Online shopping is ecosystem), and an unmatched last mile also expected to be the new norm in the post-COVID delivery logistics capability; world where the unparalleled growth of e-commerce will certainly disrupt national and international retail frameworks. As observed in most countries, the surge The trust premium enjoyed by Posts in e-commerce sales has boosted demand for postal with citizens, businesses, communities services. Across the world, Posts are reporting double- and governments; and digit growth in e-commerce transactions and delivery through the postal network. The local and community knowledge held by Posts. 6 | COVID-19, Posts and direct marketing DIRECT MARKETING This report comprises four chapters: AND COVID-19 1 THE STATUS OF THE Direct marketing has also been affected by COVID-19, DIRECT MARKETING including in relation to the growth in demand for e-commerce. In most markets, direct marketing volumes INDUSTRY OF have decreased since the beginning of the pandemic, POSTS AND DIRECT in line with global mail trends. However, the pandemic MARKETING; has amplified existing customer behaviour, particularly in terms of people’s response to advertising and direct mail. In some important markets, the demand for local and THE IMPACT FACTORS domestic e-commerce and home delivery services has 2 amplified the way customers have engaged with direct OF THE COVID-19 mail and boosted the impact of direct mail in driving B PANDEMIC ON THE to C transactions. As shown by a study led by Royal Mail, DIRECT MARKETING with more people at home, direct mail matters more and is driving online transactions more than ever. INDUSTRY; In the view of the impact of the pandemic, the Directing Marketing Advisory Board (DMAB) developed this report 3 OPPORTUNITIES AND providing the postal and direct marketing community THE WAY FORWARD; with a global perspective and analysis on the levels of AND impact of the pandemic on the direct marketing market and the postal offering in this space. It also focuses on country and industry cases that illustrate the way specific SPECIFIC CASES: THE postal operators and direct marketing stakeholders have 4 responded to the pandemic and to the challenges arising VIEWS OF POSTAL therefrom. OPERATORS AND DIRECT MARKETERS ON THE IMPACT OF COVID-19. A UPU Direct Marketing Advisory Board (DMAB) report | 7 8 | COVID-19, Posts and direct marketing CHAPTER 1 Posts and direct marketing: a global view DMAB survey analysis A UPU Direct Marketing Advisory Board (DMAB) report | 9 INTRODUCTION PRODUCTS AND SERVICES In 2007, the DMAB launched a survey on direct and digital marketing products and services, which was PROVIDED BY repeated annually until 2014 and biennially from 2017 onwards. The survey consists of 22 yes/no questions, UPU DESIGNATED aimed at assessing the direct and digital marketing products and services provided domestically by OPERATORS designated postal operators (DOs). Over the years, an average of 80 DOs have responded to the surveys, with a balanced regional representation. PHYSICAL SERVICES Based on the surveys conducted since 2007, this when the addressee is chapter provides a high-level analysis of the key trends Addressed direct mail: identified with a name and an address (of a person and/ surrounding the different types of products and services or a company). offered by DOs across various regions in the field of direct marketing. Globally, over the 2007–2019 period, there was steady growth in the number of DOs offering an addressed mail service in different 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 identified with a name. Unaddressed direct mail services might, however, be targeted at a specific region, postcode or letter-carrier route, or to a number of households sharing a similar demographic profile. Globally, the unaddressed direct mail service remained steady in all regions throughout the 2007–2019 period. Overall, the percentage of DOs offering 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 efficient way of reaching potential new customers. 10 | COVID-19, Posts and direct marketing Printing services: printing services provided on Social media marketing: marketing through the postal operator’s premises or in partnership with a social media sites (Facebook, Twitter, Instagram, subsidiary. LinkedIn). Globally, the overall trend constantly increased with an Globally, social media marketing is offered by a third average of 50% of DOs offering printing services to of the respondent DOs. In ICs, 38% of DOs provide it, their customers. In ICs, the percentage of DOs stood at against an average of 35% in other regions. However, 85%, against an average of 50% in other regions.
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