1 Address Systems and the Future of the Mail Bernard Markowicz, Ph.D Mexico City February 2011.

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Presentation transcript:

1 Address Systems and the Future of the Mail Bernard Markowicz, Ph.D Mexico City February 2011

2 The Dual Role of Address Systems Improve Network & Delivery Operations Enable Direct Advertising Mail & Mailing Industry Improved addressing by customers Improved delivery Improved mail sorting & staging Delivery point sequencing Change of address redirecting Increase delivery confidence Build direct mail industry Develop intellectual capital / revenue Work sharing Intelligent mail & future applications Results: Improved communications and trade ADDRESS SYSTEM

The Value of a Valid Postal Address is Increasing ●Traditional value of standard, validated address:  Reduce the number of “undeliverable as addressed” (UAA)  Minimize cost of redirected, destroyed mail  Enhance the average lifespan of an address (mobile society) ●Multiplicity of stakeholders increases the value of addresses:  Increasing number of stakeholders: Cadaster, emergency management, e-gov, utilities.  Increasing cost of failed postal processes (delivery, cross border returns), ●Integrated customer knowledge:  Commerce (direct mail) is driving the value trend  Drive to increase response rate (from 1% to 5%) through information integration, analytics. 3

Direct Mail Development Around the World 4 Source: UPU Direct Mail Advisory Board

Direct Mail Represents a Significant Economic Force 5 United StatesCanada Addressed Mail Pieces; per household (2009) Postage Generated; per household (2009) $ (1) $ (2) Spend on Direct Mail Advertising per household, excluding postage (2007) $351/y$195/y Total revenues generated from Direct Mail Advertising $5 595/y (3) $3 753/y (3) (1) USPS Avg rate per piece = $0.21 (2) CPC Avg rate per piece = $0.94 (3) ROI = $11.73 of revenue per $1 spent; DMA 2009 Direct mail spending will grow 5.8% to $47.8 billion in the U.S. in 2011

The value of a single address in emerging economies is significant 6 USA Canada Estimated Yearly Sales Generated by Direct Mail (per Capita and per Household) Per Capita Income Estimated HH sales Address NPV (3 years) $5 000$400$1 030 $10 000$900$2 300 $15 000$1 475$3 800 $20 000$2 100$5 440 $25 000$2 800$ Year Sales Generated Yearly Yearly Income Per Capita

Developments in Direct Addressed Mail Increase Response Rate Enhanced Technologies ●Variable data color digital printing ●Data mining and profiling ●Internet, online, web, ●Mobile devices ●CD/DVD formats ●Digital Photography ●Trans-Promo Response Rates (%) 7

Information Integration and Address Systems Improve Response Rates 8 Online Purchases Store Purchase Oak Valley Rd Manassas, VA From 1% to 5% Response Rate

Trends in Information Integration ●Info to be integrated with address  Marital status & age  Lifestyle information such as hobbies and past product purchases  Home value & household income  Language spoken in the household. ●Mailers (and customers) want:  More targeted and personal messages  Capitalize on the “mail moment”  Customized coupons and mini-websites based on purchasing data  Integration of , phone and mail (catalog) (QR Code, Intelligent Mail)  Tracking & measurement (Intelligent Mail)  Wider sale territory 9