Berne, 22 January 2008

Direct Mail: The Future is still bright?UPU Direct Mail Advisory Board

Aad WeeningWeening & Partners

A G E N D A

Distance SellingOn Line IssuesTrends in MailChallenges and Opportunities

Quote

Mark Twain

LiesDamn LiesStatistics!!

66 73160 193

44 51

79 106

20 24 2717

1995 2000 2005 2006

USA Europe Japan

127 144 263 326

TOTAL

In billion euro

SALES compared: USA – Japan - Europe

Per Capita Distance Selling

641

200155

261

13

715

320

12 7

USA

Japan

Europe

Wes

t Euro

pe

East E

urope

UKGer

manyIt

alyRuss

ia

ON-Line %

60.5 58.6

78.9 76.4

66

USA Europe UK NL France

2006

PENETRATION......

differs from country to country, due to

consumer mentalityretail networkperformance Postmaturity internetlegislation

Leaders B2C 2001 - 2006

13.2

9.3

3.3

8.57.8

5.5

0.8

4.8 4.8 4.4 4.5

2.93.8

2.2

OttoAmaz

on

Qu/Nm

eBay

Redca

ts

LWShD

JCPen

ney

20012006

In billion In billion €€

Quelle: €4.2 Neckermann: €1.3

Mail OrderMail Order

Distance SellingDistance Selling

Multi Channel RetailMulti Channel Retail

T R E N D

Multi-Channel experience

Multi - channel approach

Internet: a marketing and ordering channelInternet: a marketing and ordering channel

Customers

Marketing channelsOrdering channels

Internet Live inbound

E-mailInteractive

voice response

Paper order form E-mail

Mass / Direct

marketing

Internet Catalogues

Live outbound

Company

More Choice

Convenience

Improved Service

Enhanced brand

experience

Improved relationReduced costsImproved loyaltyIncreased spend/penetration

Increased

sales/profit

Customer Retailer

Benefits of Adopting a MultiBenefits of Adopting a Multi--Channel Channel StrategyStrategy

Trends in Distance Selling

Internet is becoming thedominating channelThe traditional « bigbook » has come to itsend (?)Instead magazine-likeguides to come closer to the (internet) customerFocus on consumer confidence

Confirmed Trend: Integration

The outdoor apparel and gearmaker mails more than 200 million catalogs per year. L.L. Bean's library includes about 10 specialty catalogs offering products in categories such as children's, fly-fishing, outerwear, sportswear, housewares, footwear, etc.etc. L.L. Bean also operates a dozen retail stores and about 15 factory outlets throughout the Northeast. It also sells online through English- and Japanese-language Web sites.

Overall, the KarstadtQuelleportals benefited particularly strongly from the close interrelation of stationary, catalogue and Internet distribution. For example, 6 percent of purchases in a Karstadtdepartment store are triggered by karstadt.de. Quelle too realized strong multi-channel effects. The Quelle catalogue generated 40 percent of orders on quelle.de. Conversely, the online shop generated 28 percent of orders from the Quelle catalogue.

Trends on the Internet

Communities and Platforms (Web 2.0)

Microsoft, Amazon, eBay, Google, Yahoo etc.

Traditional Retailers and Distance SellersTraditional Retailers and Distance Sellers

Niche Players offering webNiche Players offering web--adapted servicesadapted services

E X A M P L EE X A M P L E

eBay and traditional...

Eurostar and the Da Vinci Code

An online competition An online competition to win the ultimate prize to win the ultimate prize including $ 200.000 including $ 200.000 worth of free worth of free EurostartEurostarttraveltravel

The integration comes The integration comes from the books, the film from the books, the film and the digital activitiesand the digital activities

EurostarEurostar bookings went bookings went up 15% since the up 15% since the campaign and generated campaign and generated 2 million game plays2 million game plays

bol.com

Digitalized e-magazine

Full of information, sound, interviews, spoken information etc. Uses all media: print, sound, picture etc.

Anttilla Mail Order - Finland

Anttila is a leading mailorder company, Operating in Finland, Estonia and Latvia

Loyalty club to increase brandawareness and to gain new customers

Campaigns generated high revenues, catalogue Requests and synergies between the channels

E-shoppers turn to catalogue

Most British home shoppers (80%) now report browsing through printed catalogues before ordering online, according to research from Experian, which found that the home shopping market is home to a growing number of brands that have integrated their offline catalogue marketing with online sales features.

(Experian August 2007)

Example: Corendon

Corendon started as a lowcost airline

Internet Access Nov 2007

71

57 57

24 22 19 1712

5

North

Am

erica

Wes

t Euro

peAust

ralia

East E

urope

South A

mer

ica

Wor

ld Ave

rage

Middle

East

AsiaAfri

ca

Source: Internetworldstats

O N L I N E I s s u e sO N L I N E I s s u e s

Security and Confidence:Security and Confidence:--the offer must be truthful the offer must be truthful --delivery must be on timedelivery must be on time--secure paymentsecure payment--secure datasecure data--trustschemetrustscheme--spamspam

EU: only 6% crossEU: only 6% cross--borderbordereBay: 80 mln. active userseBay: 80 mln. active users

T R E N DThe number of Europeans shopping online has increased with 37% over the last two years The next 5 years they will grow from 100 million to 174 millionOverall e-commerce in Europe will grow to $407 billion in 2011 from $133 billion in 2006Main products: travel, clothing, media, white goods, electronics, events tickets, food, DIY

(Forrester Research and eMarketer)

Internet is rapidly becoming the leading channel (according to the maturity of internet)

Delivery is vital!

The Daily Mail 24 December 2007

Secure Payment is vitalInitiative of PayDutch Group and TNT Post in the Netherlands and Belgium

PayDutch is the go-between between Customer and Online Supplier

POSTAL SERVICES

Postal Services remainof the utmostimportance in spite ofor rather thanks to thegrowing importance ofthe Internet:

At the front end:Catalogues andmailings

At the back end:parcels

T r e n d sT r e n d sNo overall transferbetween paper andelectronic mailings as both continue to growCompanies are able to better target theirmailings and therebyreduce mail volumesInternet players are using traditional mail (eBay and others)Logistics and deliveryremain vital

(source, FEVAD, USDMA and others)

France: Development of catalogues and mailings

(in million items)

43244370 4361

4601

4750

2000

2001

2002

2003

2004

No transfer betweenpaper and electronicmailings as bothcontinue to grow

Companies are able to better target theirmailings and therebyreduce mail volumes

SOURCE: FEVAD

Letter Post per capita

68.3 67.7 66.7

2004 2005 2006

Number of Parcels per 1000inhabitants

854924 947

2004 2005 2006

5th Annual World Postal Survey

2007Courtesy: E-biss Solutions

Q: Your volume of domestic letter mail will...

Grow

05

1015202530354045

2003 2004 2005 2006 2007

34%30%

42% 42%35%

Q: Your volume of direct mail will...

grow same decline

2007

2006

2005

65%

68%

78%

10%

22%

17%

25%

10%

5%

Q: Your volume of Courier & Express will...

Your expectations in %?

68

22

10

65

8

27

grow same decline

20062007

Overall, your confidence for the future of your organisation is...

0

10

20

30

40

50

60

70

2003 2004 2005 2006 2007

51%43% 47%

High63%

Confidence explosion

59%

Future of Direct Mail

Source: WinterberrySource: Winterberry

The inherent strengths of mail

PersonalUniversalTailoredTargetedDirectFlexible & CreativeMeasurablePortablePhysicalComplementary

UK – Source DMIS UK

DM Germany (billion euro)

17.118.9

20.3 21.5 21.2

2930.8

32 31.2 32 32.5

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Tendencies:Internet higherMail slightly lower

Challenges and Opportunities

Although Internet expenditures are rapidly rising, there is still an opportunity for direct mailGo into internet solutions (PayDutch, certifications)Access to marketsPromote DM in general in order to create market

Growing competitionSlowing economysubstitution

Some examples

If you believe in the future, the future will be bright!

Conclusion