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Canada Post - Bracing For the Worst-Case Scenario

Posted by Chris Winter on Aug 30, 2016 4:50:13 PM

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A Quick Overview

It’s late August and Canada Post and the Canadian Union of Postal Workers have again agreed to extend mediation aimed at resolving their labour dispute by another 24 hours. The two sides have been deadlocked for months on the issues of pay scales for rural letter carriers and proposed changes to pensions for future employees. If talks fail the Canadian mail system could come to a halt as early as tomorrow – leaving Canadians to face the fifth widespread disruption to mail delivery since the 1980s.

Ramifications for Businesses

CUPW national president Mike Palecek previously said that the union's planned job action would have little effect on Canada Post customers, noting the mail would still be delivered.

Jon Hamilton, a Canada Post spokesperson, disagreed with that assessment, warning that the threat of job action was creating uncertainty for customers and would have a huge impact on the business "whether the union likes it or not."

According to Joanne McNeish, an associate professor at the Ted Rogers School of Management, the biggest impact will be on businesses. “The big pushback is from the banks and large mailers,” she says.  “Most of the mail in the mail stream is businesses sending to each other and businesses sending to consumers.” If the strike goes forward organizations large and small are going to be hit particularly hard in a number of ways. Not only does Canada Post ship two of every three parcels that Canadians order online but Canadian direct mail advertising, excluding catalogues, is $2 billion to $3 billion annually.

Marketers in Canada who plan to Increase vs decrease spending on select marketing channels in 2016

How Business Can Protect Themselves

The move to digital is a trend we have been witnessing for years now. When polled, 43% of marketers in Canada planned to increase their digital spending in 2016, while 3% or less planned to do so with Print and 25% said they actually planned to decrease their print spending.  With strikes like the one being threatened by Canada Post, marketers are wise to double down on their digital investments to ensure their marketing campaigns are not disrupted now or in the future.

Transitioning to Digital –The Benefits To You

The influence of digital marketing is very appealing to marketers and it doesn’t require wide-ranging changes in strategy. Benefits of digital marketing include:

  • For a decade email has generated the highest ROI for marketers of 38-to-1, according to research by the Direct Marketing Association.
  • Email marketing is getting cheaper. For the past six years email marketers in Canada have enjoyed a steadily decreasing CPC – down from $0.32 in 2010 to $0.14 in 2016. This means you can spend less on operational costs, and instead focus those freed up dollars on strategy and analysis.
  • Not only does email marketing deliver great value (and continues to get cheaper) but performance metrics also show email’s strength. Inbox Marketer’s trend data indicates that since dropping to 18.8% in 2011, open rates have risen steadily to a high of 27.1% in 2015 – an increase of over 44%!
  • Consumers are increasingly mobile. According to eMarketer there will be 29.2 million mobile users in Canada by 2016, enabling marketers to access their customers anywhere and at any time with highly targeted and time sensitive messaging.
  • Online shopping is a huge market and many retailers are driving customers through email to their online store.
  • Digital enables you to drive traffic to your stores by displaying locations, phone numbers, and store hours. This is a particularly good strategy if you have a lot of mobile users as they are already on the move.
  • Retailers already know the impact of coupons on their sales. The influx of mobile users for email should only be seen as a bonus for retail. Mobile coupons can help drive those consumers to purchase. With segmentation and targeted offers, these coupons can be far more strategic than direct mail, meaning they are more likely to be used.

 

Whether Canada Post strikes or not, marketers should be concerned with what could potentially be disastrous for business communications. Especially for those whose line between being in the black or red at the end of the year is very thin. Disruptions like a strike by Canada Post could make all the difference. Understanding that digital marketing may not satisfy all of your consumer needs, it will limit the impact of events such as a postal strike. If you are keen to learn more about digital marketing and what email can do for you please contact us.

Topics: Email Marketing, Direct Mail

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