The writing was already on the wall as a result of the sustained and rapid expansion of global e-commerce, but COVID-19 has given it a huge helping hand. The pandemic has had a twofold effect on the mailroom and packaging sector.
The first represents the fall in demand for traditional mailroom services which were already experiencing secular declines. This downward trend has been exacerbated as many workplaces continue to keep their doors closed or businesses gradually migrate employees back to an office with reduced capacity.
The second is the enormous rise in packages and parcels flying around the globe as online purchasing underwent a tremendous growth spurt due to people having to endure months of lockdown in their homes.
Letter drop
With the rise of electronic communications, it’s no secret that traditional mail has been on the wane for years. This has naturally impacted related categories such as envelopes. Research undertaken by the European Federation of Envelope Manufacturers states a total decline of 7% in volume both in 2018 and 2019.
As COVID-19 began its springtime run around the world, the UK’s Royal Mail revealed that in April and May, 553 million fewer letters were delivered (a 33% fall in volume), advertising mail volumes plummeted 63% while business post was more resilient, down a ‘mere’ 19%.
Simultaneously, parcel quantities grew 37%, with 78 million extra packages delivered in those two months. UK domestic account volumes (excluding Amazon) rose 65% as people shopped from home and retail closed down.
The Royal Mail also stated that, on average, it delivers one letter per household a day in the UK, with total letter amounts currently running around half of what they were in 2012.
These downward trends will persist, but it’s not all doom and gloom. Q2 data released by the Joint Industry Committee for Mail in the UK (JICMAIL) shows that during lockdown, direct mail and door drop volumes declined. However, more time spent at home resulted in double-digit increases in how people ‘connected’ with their post.
JICMAIL information suggests that the average piece of direct mail was interacted with 4.58 times, while door drops saw record levels of consumer engagement. Business mail recorded the highest levels of interaction.
These figures are encouraging for the renewed adoption of mail as a marketing and business tool as more employees continue to work from home.
Driving efficiency
There’s other good news from firms such as European mailroom solutions provider Quadient (formerly Neopost). Although the company’s traditional mailing hardware has not been exempt from the structural decline in letters, it has seen an increase in market share for its largest equipment lines of franking machines and folder inserters.
“Organisations of all sizes are seeking new ways of working and applications of innovative technologies to achieve cost savings and efficiency gains. This drive is reflected in additional growth in digital communications and workflow management,” says Antony Paul, Head of Global Product Marketing – Business Processing Automation at Quadient.
The rise in remote working caused by the pandemic has further gained traction with Quadient’s outsourced multichannel delivery service. Paul says this enables continuity where organisations are experiencing increased working from home or resource reductions through furlough schemes.
In fact, 2020 has been a significant year so far at Quadient. In June, the company launched its new Impress management platform (see Mailroom Innovations below) which enables customers to automate their document and communication processes securely and efficiently.
“Impress offers a host of choice and benefits to customers including operational savings, data compliance, preference-based multichannel delivery and supporting self-serve requirements, all through personalised secure digital portals,” explains Paul.
Seismic shifts
Developments like these are vital for the industry to keep pace with the seismic shift to e-commerce, customer demands and the surge in parcel distribution.
The Global Parcel Delivery Market Insight Report 2020 by Apex Insight provides some astounding figures. In 2019, the worldwide parcels business was worth almost $430 billion, a rise of around $50 billion compared to 2018. Research indicates Asia-Pacific is the largest regional packages market by value, accounting for about 42% of global trade. North America and Europe represent just over 50%.
Unsurprisingly, online retail is the primary driver of growth in parcel deliveries. Same-day delivery options are becoming ever more popular and are led by Amazon. To this end, the report reveals that significant investments are being made in last mile services, notably by Amazon and Alibaba, reflecting the strategic importance of deliveries to these operators’ business models.
Pitney Bowes’ annual Parcel Shipping Index, meanwhile, predicts that global shipping volumes will reach 200 billion parcels by 2025 and will surpass 100 billion this year in aggregate across the 13 countries reviewed. However, the report was released in October 2019 before COVID-19 and the subsequent surge in e-commerce. It is therefore hardly a stretch to imagine that actual volumes will likely eclipse all forecasts.
Commenting at the time, Pitney Bowes EVP and President of Sending Technology Solutions Jason Dies said: “Worldwide parcel revenues continue to benefit from the explosive impact of e-commerce, but it isn’t just online shoppers boosting the industry. We know from our clients’ own behaviours that office sending is increasing, particularly in industries such as IT, healthcare and manufacturing.
“Carriers are trialling new and exciting strategies to deliver the best customer experience, keep costs down, boost productivity and generate profitability. This includes forming partnerships, designing next-generation sending technologies and developing last mile innovation.”
Envelope 2.0
The mammoth escalation in parcels is also of consequence to the traditional OP industry as manufacturers and resellers get to grips with declines in the mailroom sector. As Peter Katz, Category Business Manager for Avery’s Printed Media Group points out, while there has been growth in the shipping market for its products over the years, it has not been enough to completely offset the headwinds in the letter sending segment.
However, he adds that consumers are creative and use Avery’s address labels in new and innovative ways in terms of product packaging and identification. “We have witnessed a nice uptick in the requirement for shipping labels, which is one of our largest categories, because of the rise in transportation demands,” he says.
Digitisation has also made it vital for vendors like Avery to align with all the major software and shipping company systems to ensure seamless integration with its products. “We have had long-standing template integrations throughout the software world, including our own Avery Design & Print Online,” explains Katz.
Avery isn’t the only manufacturer shifting focus to areas related to e-commerce. European envelope manufacturer Bong is repositioning to what it terms ‘Envelope 2.0’ – the approach of using traditional postal packaging items such as envelopes, pockets, expanders and padded bags for e-commerce deliveries.
“Our light packaging range offers various solutions to not only help reduce the amount of material used, but ensure the availability of sizes that fit through a letterbox,” says Bong’s Tyvek Marketing Manager Europe Andrea Wilhelm.
“In 2019, we launched the e-Green range of paper mailers. They are designed to fit the requirements of online shops and consumers, while being environmentally-friendly at the same time. Our strong kraft paper mailers are easy to open and reclose in case of return shipments. For an additional ‘unboxing’ experience, we can offer inside print, which is also available for the outside,” she adds.
Speaking to OPI, Tom Rodda, Managing Director of RAJA UK, agrees: “Operators selling via e-commerce need specific packaging requirements. They want to deliver a protected and intact product, ensure their brand experience is communicated via packaging customisation, as well as convey their sustainability credentials through the use of environmentally-friendly materials.”
The impact of coronavirus provided an unexpected boom for RAJA UK during the main lockdown months of April-June. Says Rodda: “We budgeted for declines during this period, yet as all retail outlets closed, our packaging sales grew between 20-30%, with orders rising 30-40%.
“Pre-COVID, our forecast was £30 million ($39 million) for 2020, but it is clearly significantly more than that now and most of our product categories are in growth. Postal packaging was the big winner before the pandemic, and is even more so now.”
Basket-building
Burgeoning online purchasing is good news for many manufacturers supplying items that are necessary for fast and efficient parcel delivery and sorting in mailrooms, offices – and now the home. For businesses or individuals involved in e-commerce, the purchasing of a box is a basket-builder as it typically requires packing materials, tape and other implements.
According to T3L Group Marketing Director Benjamin Baruteaud, online purchasing is precipitating a rise in sales of products that may not typically be associated with the mailroom and packaging sector. “The shift from the traditional mailroom to warehousing and logistics facilities is providing an increase in categories such as display systems and extending arms, as well as drawers, desktop and filing products.”
For Acme United Europe, the mailroom has continued to drive increased sales of cutters and knives this year. Managing Director Georg Bettin acknowledges that growth has not been massive, due to momentum swinging to online purchases and shipped parcels. However, he believes cutters, in particular, will remain a growing category with both business and consumer demand.
The transformation of the mailroom and packaging category is undoubtedly advancing as purchasing habits change and the use of technology increases. Nevertheless, there are plenty of possibilities to explore yet, as manufacturers adjust to the shifting trends with products and solutions that take advantage of the opportunities as they arise.
Mailroom innovations
E-commerce may be stealing the limelight, but there’s still innovation happening in the mailroom category.
Quadient impresses
Mailroom solutions provider Quadient launched a new cloud-based multichannel document automation platform for SMBs in June. The comprehensive platform provides flexibility to prepare and send single or batch transactional documents to customers through any combination of channels – print, digital or outsourced. Impress’s suite of applications includes:
- Impress Automate – Automates repetitive manual tasks related to the creation, distribution and output of customer communications such as invoices, statements, notices, and letters. When used with mailing equipment, it manages pre-set business rules to add personalised messaging and ensures the correct document goes into the right envelope.
- Impress Portal – Allows users to send communication through branded and secure document portals.
- Impress Dispatch – Enables business users to prepare outgoing ad hoc communications at their desktops and send them to a centralised mail production centre or a dedicated customer portal. A built-in approval process ensures communications are consistent and compliant.
- Outsourced Hybrid Mail – Removes the time-consuming process of managing outbound mail, enabling employees to prepare and send mail with just a few clicks from their desktop, which then gets physically mailed from an external location.
Pitney Bowes expands SendPro portfolio
Global mailroom and technology vendor Pitney Bowes recently introduced the latest evolution of its award-winning SendPro portfolio, the SendPro Mailstation. Since the launch, the company has sold over 10,000 units, a considerable milestone in its 100th anniversary year.
The SendPro Mailstation provides SaaS-based postage-in-the-cloud capabilities and sophisticated functionality specifically designed to solve clients’ challenges around the complexity and cost of sending.
Pitney Bowes says postage-in-the-cloud gives businesses access to accurate mailing costs in real time. Any postal rate changes are automatically downloaded to the device.
Users can print postage directly from the device following prompts on a full-colour touchscreen. An integrated scale adds precision and ensures accurate costs. SendPro Mailstation comes with SendPro Online for Priority Mail postage printing, tracking, reports and more.
September 14, 2020 at 07:47PM
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Category Update: The full package | OPI - Office Products International
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