Rethinking Seasonal Trends in Direct Mail

Competiscan is a service SPC uses to gain custom insights and analyze competitors’ marketing efforts with various companies. It allows us the ability to track a prospect’s current marketing habits, specifically in direct mail and print for SPC’s purposes.

SPC recently hosted a virtual briefing that included Q2 direct mail trends from Competiscan. Meg Cipperly, Senior Director of Insights at Competiscan, shares her two cents on DM across sectors.

The changing of seasons

Direct mail tends to follow a distinct pattern throughout the calendar year, with most high-volume sectors ramping up towards the end of the year in preparation for the holiday season. In a normal year, the spring and summer months mark the beginning of the “quiet season” for direct mail. However, COVID-19 has changed how marketers have allocated their spend this past year and a half. While the initial aftermath of the pandemic in Q2 2020 marked the lowest point for estimated direct mail volume, consumers mailboxes were fuller than normal in Q2 2021.

Estimated Mail Volume – Addressed Direct Mail (Select Sectors)

Source: Competiscan – Media Channel: Direct Mail | Sector: Banking, Credit Cards, Energy, Insurance, Investments/Annuities, Mortgage & Loan, Telecom, Travel & Leisure | Audience: Consumer | Added to database: Between January 2018 and June 2021 | Country: US | Primary: Primary | Delivery Method: Mailed

What are some factors driving this return to the mailbox?

Consumer spending increased substantially, and marketers looked to capitalize on new spending behaviors. In fact, in Q2 2021 spending on U.S. retail and food services increased over 30% year-over-year. Likewise, the rise in mail volume for food service companies has contributed to the growth in retail and consumer services mail volume over time, with companies like DoorDash and meal kit delivery services like Freshly hitting the mailbox in high volumes. At the same time, activity has gone up for home services companies as well. For example, Competiscan observed a large influx of companies marketing home improvement, lawn care, and pest control services this summer. With consumers spending more time at home, the mailbox has proven to be an effective marketing channel in these segments.

Another area for growth in direct mail has been in the travel and leisure category. Travel direct mail volumes nosedived in Q2 2020, as industries like cruise lines virtually halted marketing activity. While travel volumes have not yet returned to 2019 levels, Competiscan has observed a recent influx of mail from cruise line companies, as well as hotels, resorts, and casinos.

Personal loans and credit cards historically account for two of the highest marketed products in financial services. Marketing of these products took a severe hit in Q2 2020, but in 2021 activity has increased substantially. For personal loans, several lenders reported strong originations and loan performance in Q2 alongside the increase in mail volume. With consumers looking to finance their vacation, borrow funds for home improvement projects, or even finance a wedding, lenders have multiple options for positioning personal loan products in effective ways during the spring and summer months.

Credit card companies mail in huge quantities, and Q2 was the first quarter we really saw a flood back into the mailbox from many issuers. Almost every top ten issuer showed an increase year-over-year in direct mail volume. Competiscan observed increases in the issuance of general purpose consumer cards, travel cards, retail cards, and especially credit building cards. Additionally, there were several new credit card products launched in 2021, which further contributed to the increase in mail volume in Q2. While Q2 is typically a relatively light quarter for credit cards, with the highest volume of the year usually occurring before and after the holiday seasonvolumes in Q2 2021 reached their highest point since pre-pandemic, with issuers looking to capitalize on the increase in consumer spending.

Competiscan has also noted a sustained increase in auto finance marketing volume, specifically from credit unions, over the past several quarters. Credit unions often look to auto finance to deepen the relationships with their existing members. In both Q2 of 2020 as well as Q2 of 2021, credit union auto finance mail volume accounted for a large percentage of activity in the mailbox as other auto marketers decreased their volumes in the spring and summer months. While the automotive industry often markets their products towards the end of the year, credit unions have tailored their spring and summer campaigns with seasonal messaging to better stand out in a relatively less packed mailbox. Competiscan saw an increase in credit unions discussing auto loans for their members to use to prepare for their next road trip or vacation, which we found interesting. For example, there was a 162% increase in campaigns marketing a recreational vehicle loan, products that were particularly popular as consumers turned to enjoying more domestic outdoor adventures in summer 2021.

Conclusion

COVID-19 has changed consumer behavior and spending patterns in ways not seen before. It has also changed the normal seasonal rhythm of direct mail marketing. It remains to be seen whether or not these changes will be lasting or recurring. For now and in the immediate future, it is clear that direct mail marketing is a vital component of any campaign, regardless of the season.   

For more information on marketing data and insights, please email us at research@competiscan.com

Sources:

https://www.competiscan.com

https://www.census.gov/retail/marts/www/marts_current.pdf

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