direct mail, Economics, Marketing, Media, USPS

The Last Post

This is my last post on USPS performance. If you are in the direct marketing or direct mail business, you have seen these before, but unless things stabilize, I don’t want to report, thanks.

The USPS Postal Regulatory Commission has just released the latest Revenues, Pieces and Weights quarterly report. They call it FY Q1/2020.This covers October 1 to December 31, 2019.

Cutting to the chase, I highlight these numbers:
1. First Class revenues are off $161 million, down 2.3% just for the quarter. This was supposed to be the Christmas, Thanksgiving, Halloween and holiday greetings season.
2. Direct Mail or “Marketing Mail” as they have renamed it, down $252 million, or off 5.4% during what was traditionally a good season.
3. Direct mail volume for the quarter was off 1.7 billion pieces…down 7.9%. Hello??
4. Periodical mail continues its slide, revenues off 7.7%, volumes off 7.4%
5. Competitive Packages and Parcel mail, revenues up $137 million, or 2.1%, but quantities down 68 million pieces, off 4.0%.

I suppose I am naiively conservative, but I really expected for this past quarter to shine, and I have been rudely shaken to grasp what everyone else has been saying for years.

On an annual basis, the numbers are no more encouraging. I have created the chart below, converting the USPS fiscal year reports to normal business calendar years: January to December.

Compared to 2018, here are a few highlights about 2019 volumes:
1. First Class revenues off 2.2%; pieces off 3.4%
2. Direct mail revenues off 3.7%; pieces off 5.6%
3. Packages and Parcels revenues up 3.5%; pieces down 2.8%

Clearly, email, chat, web, and social media has displaced the need to use the mail. The only beneficiary in this trend is the package delivery business, which the USPS has carefully cultivated, though the decline in pieces is still a concern.

If there is any bright spot in this numbers soup, it might be that the direct marketers who mail to live know what they are doing; that it’s the small local businesses which used to mail have opted for web and social media instead.

We’ll see, but unless they do, this is my last post on the USPS.

Thanks for reading and sharing.  If you are in the DM business, and have an alternative observation to make, I would love to hear it!

Standard