The Envelope and the Future of Mail A View from North America

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The Envelope and the Future of MailA View from
North America

• A Mailing Industry Briefing
• August 2003

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We Are In The Middle of A Decade of Challenge

• The Consumer is Overwhelmed with messages.
• Responsiveness is the key to success.
• There will continue to be significant shifts in
  advertising spending.
• Permission based marketing is here to stay.
• New Consumers have new mail oriented values.
• The Retailer Grows.
• The Posts will continue to change.
• From Print and Distribute to Distribute and
  Print.
• New Opportunities for Mailers and Vendors

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The Consumer is Overwhelmed!

• Direct E-Mail has sky rocketed, over 70 percent
  of office email is advertising too much.
• Telemarketing has gotten out of control.
• Television commercials continue to push
  programming time downward.
• Direct mail is under attack in many States and
  Municipalities.

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So How Are Consumers Dealing With This Tidal Wave
of Communication?

• Do Not Call Me.
• Do Not FAX Me.
• Do Not Email Me.
• Do Not Mail Me.
• Do Not Bug Me.
• If I Want To Respond I Will Respond!

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So What Is A Marketer To Do?Responsiveness is
the Key To Success!

• Consumers desire and businesses respond to
  targeted, tailored and timely communication.
• According to recent research by Vertis, Inc., 46
  percent of consumers stated they responded to
  direct mail this year as compared to 34 percent
  last year.
• Young baby boomers indicated they responded 49
  percent of the time.
• Seniors are responding more.
• The secret is targeted, tailored and timely.

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The Shift in Ad Spending

• Advertising is now global, campaigns are global.
• Brand management is the key Coke, is Coke, is
  Coke in any language.
• Advertising pharmaceuticals direct to consumer.
• Advertising public health concerns to teens.
• Advertising and entertainment have merged.
• Even distributors are trying to contact their
  customers directly.
• Mail must be made more interesting in this new
  word.

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Permission Based Marketing Is Here To Stay!

• I want it when I want it. The consumer is in
  control.
• Brand based models are growing- Amazon,
  Nordstrom, Levis.
• Coupon models are also permission based
  Coolsavings.com, Val Pack.
• Points based marketing is also moving forward
  Airlines, Credit Cards, etc.
• Sweepstakes still there but more web based.

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The Contextual Transformation of Mail

• Permission based marketing.
• Personalization and digital printing.
• Shop at home and delivery to the home.
• New ways to mail, new ways to grow business and
  new ways to reach the consumer.

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So What Does This Mean for the Mail?

• Consumers want convenience. They dont want to
  walk or drive too far.
• They prefer an instantaneous relationship. They
  have to connect to the package.
• They like quick response devices. Tear off
  coupons, easy to fill out forms, simple paper
  work, ease of access.
• They dont want to be hassled by devices that are
  too complicated for them to handle. They only
  have a limited time.

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Ways In Which Mailers Are Responding

• Integrating mailing lists with detailed customer
  profile.
• Working to insure that the content of mail is
  targeted to an individuals needs and interests.
• Adding value to the exchange at point of
  delivery.
• Reaching the consumer in a timely fashion.
• Adding more value to the mailpiece itself.
• Providing integrated services.
• Establishing better metrics to show response.

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Home Shopping Behavior Will Change!

• E-Commerce will continue to grow globally.
• Traditional retailers will play a stronger role
  in home shopping.
• Home shopping will double by 2010.
• Delivery will be a growing cost and a real
  challenge.
• Consumers will want convenience.
• International partnerships will emerge.

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Home Shopping Growth Rates
Source Institute of the Future/Bureau of the
Census 2002
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So How Is Printing Changing?

• Digital printing will be the most important
  printing technology over the next decade.
• These new presses are quieter, more robust and
  print much faster than before. They are not yet
  at offset quality but they are getting there
  fast.
• There will be overlaps in printing quality
  between flexo and offset first, then between
  flexo and digital. We will also see digital
  technology merged into the process, i.e.. Digital
  color verification, plates, screen to plate, ink
  metering.

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So Where Will Digital Print Emerge?

• Variable data printing content targeted on user
  profile.
• Print-on-demand/short run just in time
  printing.
• Distributed printing print it where I want it,
  when I want it, how I want it.
• Barriers so far Quality (not offset), cost,
  maintenance, run lengths number of colors and
  customer education.

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The Transformation of the Posts

• The posts will be driven to find new values in a
  changing communications market.
• They will continue to have to deal with the USO
  and how to pay for it with other services.
• The will provide new mail and parcel delivery
  services.
• They will become logistics providers.
• They will offer more integrated financial
  services.
• They will do whatever they can to protect their
  core businesses.
• They will be more integrated communications
  companies.

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New Post Offices?
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So How Will The Envelope and Printing Industry
Change?
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What Is Going To Happen?

• Mail will shift from broadly targeted to
  specifically targeted.
• Mail will be addressed to individuals more often
  it is more secure and direct.
• Individualized messages will be used more often.
• There will be more smaller, mailings. More
  patterning, more interest targeting.
• Each mailpiece will become more valuable.

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How About The Envelope Companies?

• Companies will offer faster turn around and more
  printing features.
• Companies will see envelopes in a much broader
  context.
• Companies will become solutions providers.
• Companies will become more integrated with their
  customers.
• Only 60 percent of a companies revenue will come
  from traditional products.

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The Type of Company A Customer Will Want To Do
Business With

• Is creative, innovative in design.
• Can offer a wide range of printing capabilities
  offset, flexo and ink jet.
• Understands the posts to be used.
• Can offer a total solution to the customers
  problem.
• Communicates will constant order status.
• Talks to the customer, not at the customer.

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Things To Remember!

• Consumers feel the mail is still important In
  Australia or the US, it is still important.
• The mail has an important role to play in product
  distribution.
• More of the mail will carry an advertising
  message. Less will be transactional.
• The mail will be more targeted, use more colors
  and be much more personal.
• The idea is to look different. Different means
  response.

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The Future Will Always Be Different!
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When You Go To Billions instead of Millions The
Cost Goes Down But the Problems are More
Difficult.
Things Will Start To Think
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Postal Portal?
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Electronic Ink
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Sandia Tagging

• Spectral spreading delocalizes fiducials
• Uniform coverage across the image
• Minimally sensitive to particle loading
• Supports automated image registration

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How could RFID be used on an envelope?

• Authenticity
• Possibly be used as tamper evidence if when
  opening the seal the RFID antennae is broken
• Tracking each tag is unique
• Benefits to postal system
• Marketing?
• Competitions
• Links to web sites?

Ms A B Cdefg 1234 XXX MI
But we could do it just As Cheap with a Barcode
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Your Questions?