The United States Postal Service keeps our country connected every day, including now during the COVID-19 emergency. With recent changes in mail volume, we all must monitor the direct mail space and its partnership with the post office. Numbers aside, we salute the workers now more than ever as they keep our mailboxes full.
Direct Mail Is Alive
If we look at the last decade of mail, there has been some significant changes but direct mail advertising has maintained its strength. In 2010, First-Class Mail volume was 77.6 billion pieces. In 2019, it was 54.7 billion – a nearly 30% decline. Marketing Mail also declined, but less precipitously – from 81.8 billion pieces to 75.7 billion. Meanwhile, as direct-to-consumer shopping has taken hold, parcel volume has doubled from 3.1 billion to 6.2 billion package deliveries.
The decline in personal mail can be attributed to the rise of email and social media. And the parcel expansion is easily explained by the elephant in the room– Amazon. Throughout this changing landscape, the direct mail advertising industry has continued and is a major foundation of USPS's revenue. We should anticipate a long future for direct mail offerings, but we have to ask how the current health emergency is affecting business.
Anecdotally, Milestone Marketing Solutions has seen only minor adjustments in the volumes being sent. We have revamped messaging, and our clients have seen positive results. Although, mail volumes reportedly have dropped by 30% since the coronavirus became more widespread. Even though there has been an expected uptick in packages due to stay-at-home orders, this major drop in numbers means the USPS will be financially struggling and looking for government help.
Financial Crunch
The U.S. Postal Service has historically been a self sufficient operation, but since 2010 they've been operating at an increasing loss. This has been in part to declining overall mail numbers and under budgeted retirement plans. The Coronavirus has unfortunately made this financial struggle worse as mail quantities are down. The USPS has made it clear, it will likely run out of money before September of this year.
In order to stay afloat, advocates for the Postal Service are asking Congress for $25 billion in immediate assistance, a $25 billion modernization grant to overhaul infrastructure, and $14 billion in debt forgiveness. There are congressional actions calling for a special stimulus, but so far it has been slowed down with debate over how the money is spent. The treasury is also involved as a lender to the Postal Service, but that would also come with negotiated terms.
Despite these concerning numbers, I have faith the postal service will emerge functional and ready to adapt to the next challenge. As marketers, we have to be prepared for potential rate adjustments (which are managed by congress). This is an optimistic perspective, but I view the most likely changes in price will come for parcels, not standard mail. Many of the new stressors the Postal Service is facing come from the influx of Amazon packages, especially during quarantine. Standard Mail used by direct mail marketers should remain as viable as ever.
Thank your Postal Workers
Throughout all of the new pressures on our way of life, one thing has stayed consistent– the mail arrives. On a regular day, the job has its stresses and risks, but now more than ever these men and women are serving their community, masked and gloved. Make sure to show your appreciation when you can, six feet away.
In the coming weeks, the US Postal Service and its budget could become a national political sticking point. We as marketers must be prepared to adapt to any changes and hope that this original American institution stays afloat and strong. Once again, the regular people on the streets delivering your mail deserve the most appreciation, so we salute our postal workers.
Good luck and stay safe.
