The Direct Mail Divide — 6 Big Trends in 6 Major Industries
We tend to view the direct mail industry as a whole, including the myriad trends that we glimpse in the flowing mailstream. But the reality is that each vertical — such as nonprofits or travel — can be rather different is how it’s using mail in terms of format type, format size and personalization, for example.
Reviewing mailing data (from our gigantic archive of direct mail, Who’s Mailing What!) from the first six months of 2013 and comparing it to 2012 and 2011 reveals that six of the major direct mail verticals belong in two big buckets:
- Insurance, Financial Services & Nonprofits
- Travel, Professional Services & Retail
In other words, the industries in each respective big bucket has a lot in common with each other, but not much compared to industries in the opposing big bucket. With that in mind, let’s look at each big bucket separately.
INSURANCE, FINANCIAL SERVICES & NONPROFITS
1. Domination By the Medium-Sized Envelope
At present, envelope format takes up 83 percent of the mailstream (and at 95 percent, it’s nearly the only format that Nonprofits use). And among envelopes, medium-sized ones (#10 to 6″x9″x) averages over 88 percent and remains steady in Financial Services and Nonprofits, but experienced a recent drop in Insurance.
2. Self-Mailers and Postcards Are Still Trying to Find Their Way
While postcards grew to 7 percent in 2013 in insurance mail – and that’s double the percentage from 2011-12 — it steadily dropped in usage from 2011 (5.3 percent) to 2012 (3.9 percent) to 2013 (1.8 percent). Meanwhile, nonprofits barely recognize the format, going below 3 percent usage in all three years.
Self-mailers suffered a similar fate, but with no increases in these three verticals. While steady in insurance mail at just over 7 percent, it declined from the respectable share of 14 percent in 2011 to 11 percent so far this year — and like postcards, nonprofits are only responsible for under 3 percent usage.
3. Personalization
These three verticals lean heavily on personalization, with all personalizing at least 59 percent of the mail. Insurance averages around 80 percent since 2011, financial services is 73 percent and nonprofits is 59 percent.
In terms of which format is personalized the most, it’s the envelope … and not even close. The envelope takes up at least 95 percent of personalized mail.
Of course, companies/organizations and their agencies often don’t personalize much beyond address for the envelope format. Thus, for more advanced use of VDP, we expect to see an increase in self-mailers or postcards — two formats that are friendlier to advanced personalization — or simply envelopes that are greater personalized.
TRAVEL, PROFESSIONAL SERVICES & RETAIL
1. More Even Distribution of Format Usage
Compared to the above big bucket, here you have much less reliance on the envelope format — less than 16 percent for travel and retail and less than 25 percent for professional services since 2012.
Instead, postcards, self-mailers and brochures are working for travel, professional services and retail verticals. Postcards now stand at 25 percent for all three verticals in 2013 — steady for professional services and retail, but growth for travel. Self-mailer usage continues to grow — at 27-31 percent for travel and retail since 2012, and at 43 percent for professional services in 2013 after 36 percent in 2012. Lastly, brochures are used in nearly 30 percent of mailstream for travel and retail.
2. Large-Size Envelopes Are a Player
While medium-sized does dominate for travel and professional services envelopes at 81-87 percent since 2011, and over 75 percent for retail, the large-sized envelopes are not too shabby. They show up in 22-23 percent of retail mail, 16 percent of professional services and 12-15 percent of travel.
3. Personalization Not Much of a Factor … Yet
As we’ve seen, personalization is a major tactic used by insurance, financial services and nonprofit industries. However, among these three verticals, it still hasn’t gained much traction, as only 20 percent to 26 percent of travel and professional services mail is personalized since 2012, versus only 7-8 percent of retail.
While they’re not the most common format used for these verticals, envelopes are the most often personalized format, at over 58 percent of personalized formats for all 3 verticals in 2013.
CONCLUSIONS
Test more. If your mail is looking like your competitor’s mail, perhaps it’s high time to test a new format, a new size, a different color, some extra VDP, something!
Often, we’re seeing certain verticals simply change envelope size with their tests, rather than try a self-mailer or postcard. Or they’re only using the bare minimum of personalization (name, address) rather than going deeper (geography, age, sex, occupation, etc.) in both text and imagery.
It’ll be interesting to see which verticals break out from the current practices in 2014.
Ethan Boldt is the chief content officer of Direct Marketing IQ, which includes the most complete direct marketing bookstore (Direct Marketing IQ Bookstore) and most complete library of direct mail and email (Who’s Mailing What). Reach him at eboldt@napco.com.
