How Can Catalogers Manage Their Post Office Mail Delivery Risk During Q4?
Catalogers are rightly concerned about managing their catalog deliveries through the mail during the election season. Issues include:
- Will catalogs get delivered?
- Will catalogs get delivered on time given the turmoil surrounding the Post Office and the election?
- Will customers respond like a normal holiday season or will response rates be affected by the shadow of the election?
- Will catalog orders be delivered on time?
- Will customers have confidence to order as robustly as they have during the first six months of the pandemic?
Catalogs primarily are bundled into co-mail pools that deliver carrier route bundles of packages shrink-wrapped for each carrier route. The great majority of mail pools are precisely tracked by the catalog printers through the postal system all the way to delivery in mailboxes. Currently, catalogs are flowing smoothly through the mail pools and service standards for delivery are being maintained. Catalogers can and should stay in close touch with their printer to monitor mail deliveries. Mailings scheduled during the three weeks before the election should be closely monitored. The great majority of catalogs arrive in November after Election Day. Catalogers can work closely with their printers and logistic partners to monitor catalog delivery in the weeks right after the election.
Will catalogs get delivered on time right before and after the election? This is a difficult question. Catalogs are bulk mail. The Post Office has latitude to hold, delay and even dumpster catalog bulk mail. The turmoil in the Post Office means there's little accountability if catalog mail is delayed. Presumably election ballots will get priority over bulk mail, so the risk that catalogs are held is a real concern.
How will customers respond to catalogs during the election season? Typically during a presidential election year, there's a shadow before the election when response rates are soft because people’s attention is on the election. Catalogers know about this shadow and plan for sales to be softer than normal until after the election. But what if the election drags on without a clear result? A delay in American consumers pivoting to the holiday buying season could be a serious risk. The time to get catalogs into people’s hands and have them respond is short, so catalogers have a tiny window to mail catalogs, book and ship holiday orders. If the election drags on, chaos would soften consumer demand.
Will catalog orders be delivered on time? Hopefully yes. The Post Office has, however, raised its rates for package delivery during the holiday season. At the very least catalogers will need to calibrate the most economical ways to ship packages. Shipping rates for customers are largely fixed by now, so catalogers will scramble to understand the most economical options. Will packages flow smoothly through the Post Office? Hard to know, but some catalogers may shift some packages over to UPS and FedEx to avoid the risk of turmoil inside the Post Office. In the past, the Post Office has underestimated the shift in volume and reduction in revenue when it has increased its rates. Certainly the Post Office will see some revenue reduction.
Will customers order as robustly through the mail as they have during the pandemic? There has been a major shift in consumers ordering much more through direct channels and much less through retail stores. This shift in buying behavior is permanent to some degree as retail stores have simply closed. But will consumers buy as robustly if the news in November is about chaos in the Post Office or a contested election result? There are a lot of unknowns in trying to forecast holiday ordering volume.
How could the Post Office make a robust holiday season more likely?
- Build confidence in the election by strongly stating that it will ensure that ballots get delivered on time and on plan.
- Roll back short-term initiatives like cutting overtime and delaying First Class mail to build confidence in its role in ensuring a fair election during the pandemic.
- Congress could fund the Post Office liquidity, or the Post Office could clearly state that no short-term liquidity issues would affect mail processing during the time of the election.
- State loud and clear that its initiatives and plans to cut costs and improve profitability are a lower priority in the short term than the absolute mandate to ensure the election.
It would be very useful if the Post Office would pivot and take steps to rebuild confidence in the short term around the ballot issues. Rebuilding confidence would go a long way toward minimizing uncertainty for American consumers as catalogers and direct marketers try to squeeze as much as possible from the last quarter of a dismal economic year.
Rebuilding confidence in the Post Office is important to the overall health of the economy. Let’s hope the people in Washington can ensure the Post Office continues to deliver “rain or snow, sleet or shine.” Anything less than a full commitment by the new Postmaster General to deliver the ballots will hurt not only the credibility of the election but the overall holiday Q4 economy.
Jim Coogan is the founder and president of Catalog Marketing Economics, a consulting firm focused on catalog circulation planning.
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