Last year was a rather unwelcome roller coaster for mailers to the Canadian market. Canada Post saw great momentum in the first half of the year in marketing mail as well as parcels. The new oversize Neighbourhood Mail product saw excellent results, and the Postal Code Targeting product gained momentum with marketers. This momentum occurred even with the uncertainty among mailers as Canada Post was in negotiations with all its various unions. The biggest negotiations involved the Canadian Union of Postal Workers (CUPW), who represent the urban as well as rural/suburban bargaining units. Even with the mounting tensions around negotiations, mail continued to move as normal.
Mail movement changed in mid-October when CUPW issued a strike notice. Thus began a series of rotating strikes across Canada. These disruptions eventually took their toll, such as when Canada Post’s largest plant was hit with a two-day shutdown. Mail and parcel delivery ground to a halt. Canada Post had so much product waiting in trailers that it resorted to renting refrigerated trucks to handle the overload. Parking lots at Canada Post and mailers were packed with full trailers, and international posts were forced to hold inbound parcels in the busy pre-holiday season.
As the economic impact grew and Black Friday purchases looked like they might be delayed until after the holidays, the Canadian government stepped in with back-to-work legislation. Five weeks of rotating strikes had all but crippled the postal system and done tremendous economic damage to businesses. With emergency legislation in place, Canada Post was able to get the system back up and running in a remarkably short period of time. Negotiations have gone to arbitration, and the industry is breathing a sigh of relief.
Canada Post’s job now is to restore industry and consumer confidence in its mail and parcel delivery. In 2017, Interbrand listed Canada Post as one of Canada’s top 150 most iconic brands. As of 2017, that ranking was still quite high. Canada Post was 13th on Statistica’s Most Influential Brands in Canada in 2017 – right between the Weather Network and the CBC, Canada’s national broadcaster. Here is hoping 2018 didn’t drop them off the list completely!
What’s Happening in the New Year?
Pricing and product changes took place in January of 2019, and it is clear that Canada Post is putting their efforts into making mail more attractive to marketers. The biggest change is the drop in minimum volumes for Machineable Mail for Personalized Mail, Postal Code Targeting, and Publications Mail. The minimum is now set at 100 pieces, down from 400, which is excellent news for mailers. Although that seems a very small amount compared to American job sizes, a federal postal review showed that 94% of Canadians still believe mail is important, and more than 87% open mail addressed to them. Mail remains essential to commerce in this vast country, including acquisition, fulfillment, and billing.
Neighbourhood Mail is a staple in Canadian mailboxes. These are advertising pieces with no name or address; mailers select carrier walks, and pieces are delivered to every address within that walk. From real estate agents soliciting listings to flyers for the nearby grocery store, Neighbourhood Mail is an ideal way to drive business to the largest number of possible customers with the least cost. The addition of the oversize class of Neighbourhood Mail gives marketers even more design space to make the piece pop in the mailbox, and results from 2018 show it has been welcomed by industry. As an added bonus in 2019, Canada Post is rolling out upgrades to its Electronic Shipping Tools for Neighbourhood Mail. It will have a simplified user interface, fewer data import steps, and better data import handling.
The new kid on the block, Postal Code Targeting, has undergone even more changes in 2018 in response to input from the industry. Specifications have changed, and pilots have tested additional features. A hybrid of Neighbourhood Mail (one to many) and Personalized Mail (one to one), Postal Code Targeting is positioned as a uniquely Canadian acquisition tool. Mailers can provide target postal codes, such as their best customer addresses, and Canada Post will provide data back for all points of call within those postal codes. The data produces a 2D barcode, which is printed on a machineable piece and the original addresses can be suppressed from the mailing. More tweaks to the product are promised, and the ROI is proving the product’s value as it slowly becomes more known in the direct mail space.
And finally: catalogues. Yes, we spell it with a few extra letters, but they are still the same excellent acquisition vehicle as in the US. Although not quite as popular in Canada as they are south of the border, research from Canada Post and others shows that 33% of Canadians make a purchase after receiving a catalogue, either online, in a store, or by telephone. Shoppers spend 109% more on a website after looking at a catalogue received in the mail. In addition to that, about 40% of Canadians keep their catalogues for a minimum of one month. Catalogues drive website visits (25% of recipients) and visits to brick and mortar locations (33% of recipients). This includes millennials, not just the generations that grew up with the Sears Wish Book. Canadian Tire’s Wow Guide has brought new life to catalogues and other marketers are quickly picking up the trend.
In a world of quickly moving communication, catalogues are an opportunity for consumers to do their window shopping in the comfort of their own home without peering at the screen of a smartphone or having to boot up a computer. A greater emphasis on design and images is attracting the attention of millennials, which opens a new audience for catalogue marketers. Canada Post has recognized the value of catalogues and has made changes over the past two years to make them simpler and less costly to mail.
The first change, which was introduced a couple of years ago, is that catalogues can be co-packaged with Publications Mail (periodicals) for the incremental weight only. Previously there was a separate charge to include catalogues with publications. This has reduced costs to both publishers and catalogue mailers, adding value to both.
The second change is to Canada Post’s mini-catalogue acquisition product, which was launched in 2015. With the 2019 pricing updates, Canada Post is taking industry advice and making mini-catalogues a special pricing category, below that of standard Personalized Mail. With their value as an acquisition tool, this will make mini-catalogues even more economical for mailers to strengthen their brand and engage directly with customers.
So please accept our very Canadian “sorry” for the rough ride in 2018. We promise mail will continue to be the valued and valuable marketing product enjoyed by Canadians. Mail is still a crucial element in any marketing campaign to Canadian consumers, and it is great to see Canada Post working to simplify the system and add value to new and existing products. With US$19 billion in Canadian e-commerce purchases, it is definitely worth taking a look north of the border.
Kristi Kanitz is the General Manager of Flagship Software Ltd. and the Chair of the Board of Directors of the National Association of Major Mail Users (NAMMU), the Canadian mailing industry association. Flagship is the developer and provider of SERP-recognized Canadian mailing software as well as CASS and PAVE-certified US software. Kristi has been in the mailing industry for more than 20 years and is considered an expert in Canadian addressing and Canadian mail. She is a frequent presenter at industry events including the annual National Postal Forum presented by the USPS.