The postal reform bill about to be introduced in the House of Representatives “is a mixed bag,” H. Robert Wientzen, the Direct Marketing Association CEO, said in a keynote address this morning at the Annual Catalog Conference in Chicago.
Although the only fix for an ailing postal service is legislation that allows it to be competitive in the global, Web-driven market, the DMA has a few problems with the bipartisan postal bill, Wientzen said. (See, House Panel Schedules Markup for Postal Reform Bill, DIRECT Newsline, June 12, 2002).
One problem is that some of the language “could cut into mailers’ workshare discounts,” Wientzen said. The American Postal Workers Union doesn’t like the discounts because they take work away from its members.
Another problem is the language regarding rate-setting and the rate of inflation. The provision that seeks to hold the average rate increase for a mail subclass to the rate of inflation is great, he said. But the current draft of the bill includes a “safety valve” provision “that would allow a hike that goes above the inflation rate as the postal service and Postal Rate Commission see fit,” Wientzen said. “That’s kind of like telling a child not to eat candy before dinner–that is, unless he wants to.”
The DMA’s third concern is the bill leaves too much power in the hands of the PRC–including rate-making specifics. “This is a little like a blind date with bureaucrats, which, personally speaking, isn’t too appealing,” Wientzen quipped.
The DMA has not yet had a chance to thoroughly review the bill, which reflects a compromise between the two houses of Congress, he added. And until the DMA does so, “we’ll reserve our full support…until we understand the impact it could have on the postal service, and on you,” he said.
Member involvement is vitally necessary if real postal reform is ever to occur, Wientzen warned the audience. People must contact their elected officials, request reform and explain what it means to them in terms of dollars and cents, he said. “It’s either that or the postal service completely breaks down, triggering Congress and the President to finally address the problem.”
In general, Wientzen admitted, the catalog industry’s market share is stagnant. Only 40% of Americans shopped from home in 2000, according to MediaMark and Simmons Market Research Bureau. “We as an industry must build market share,” he said.
Web use is increasingly important for catalogers; 97% of them have a Web presence. Five years ago the Web generated only 2% of catalogers’ total sales, but last year it was 19%. In three years, nearly a third of sales will come through the Web.
Still, catalogers’ ad spending is growing slowly. The DMA projected that the industry will spend $14.4 billion dollars, an increase of only 2.8% over last year.
And, though catalog sales are expected to hit $122.5 billion this year, compared with $117.5 billion last year, “sales growth is slowing,” Wientzen said. Nevertheless, he added, “it is still outpacing growth for total U.S. retail sales.”
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