The Household Diary Study Mail Use & Attitudes in FY 2007
United
States Postal Service
John Mazzone – Economist
John Pickett – Manager, Demand Forecasting and Economic Analysis
Finance Department
United
States Postal Service Headquarters
475 L’Enfant Plaza, SW RM 8600
Washington, D.C. 20260-5323
March 2008, Contract# 102592-02-B-1502
NuStats
206 Wild Basin Road, Suite A-300
Austin, Texas 78746
Table
of Contents
1 Chapter
1: Introduction – Volumes & Trends
2 Chapter
2: Profile of Mail Usage
Characteristics
of Higher- and Lower-Volume Households
Demographic
Characteristics of U.S. Households
Correspondence
Mail and Household Characteristics
Transactions
Mail and Household Characteristics
Advertising
Mail and Household Characteristics
Effectiveness
of Advertising Mail
Advertising’s
Impact on Periodicals
Periodicals
Mail and Household Characteristics
Packages
and Household Characteristics
A Appendix A: Comparative Tables 1987, 2006 and 2007
Concordance
A1. Total Mail Overview
A2. First-Class Mail
A3. Standard Mail (A)
A4. Direct Mail Advertising
A5. Periodicals
A6. Packages & Expedited
A7. Electronic Communications
A8. Annual Trends
B Appendix B: Methodology
Study Design and Methodology
Sample Design
Data Collection Method
Data Processing
Sample Demographic Profile (all counts unweighted), Government Fiscal Year 2007
Data Weighting and Expansion
Weighting Procedures - FY 2007 Diary Data
Adjustment Factors
C Appendix C: Survey Instruments
C1. Recruitment Questionnaire
C2. Diary Package
Advance Letter
Certificate of Appreciation
Photo Quick Start
Instruction Booklet
Question Booklet
Answer Booklet
Frequently Asked Questions
"I'm Finished. . . ." Card
Gift Selection Form
List of Tables and Figures
Table E.1:
Mail Received and Sent by Households
Table E.2: Household
Mail Volume Received and Sent by Market Served
Table E.3:
Advertising by Mail Class
Table E.4:
Periodical Type Received
Table E.5:
Packages Received and Sent via the U.S. Postal Service
1 Chapter
1: Introduction – Volumes & Trends
Table 1.1:
Total Mail Volume: FY 1987, 2005, 2006 and 2007
Table 1.2:
Total Mail: Revenue, Pieces, and Weight by Shape, FY 2007
Table 1.3:
Total Mail: Revenue and Weight per Piece by Shape, FY 2007
Table 1.4a:
Total Domestic Mail Flows
Table 1.4b:
Domestic Mail Flows per Household per Week
Table 1.5:
Mail Received and Sent by Households
Table 1.6:
Pieces Received and Sent per Household
Table 1.7:
Mail Received and Sent by Households
2 Chapter
2: Profile of Mail Usage
Table 2.1:
Mail Volume and Demographics Average Annual Growth 1981-2007
Table 2.2:
Characteristics of Higher- and Lower-Mail-Volume Households
Table 2.3:
Education of Higher- and Lower-Mail-Volume Households
Table 2.4:
Households by Income and Education
Table 2.5:
Households by Income and Age
Table 2.7:
Households by Number of Adults
Table 2.8:
Households by Type of Internet Access
Figure 2.1:
PC Ownership and Internet Access
Figure 2.2:
Broadband Subscribers
Figure 2.3:
Household Use of Rented Mailboxes
Figure 2.4:
Household Visits to Post Office in Past Month
Table 3.1:
First Class Correspondence Mail Sent and Received by Sector
Table 3.2:
Correspondence Mail Received by Income and Education
Table 3.3:
Correspondence Mail Sent by Income and Education
Table 3.4:
Correspondence Mail Received by Income and Age
Table 3.5:
Correspondence Mail Sent by Income and Age
Table 3.6:
Correspondence Mail Received and Sent by Household Size
Table 3.7:
Correspondence Mail Received and Sent by Number of Adults in Household
Table 3.8:
Correspondence Mail Received and Sent by Type of Internet Access
Table 3.9:
Income and Education by Type of Internet Access
Table 3.10:
Personal Correspondence Sent and Received
Figure 3.1:
Personal Correspondence Sent by Income Group
Figure 3.2:
Personal Correspondence Sent by Age Cohort
Figure 3.3:
Holiday Greetings Received by Age and Income, FY 2005, 2006 and 2007
Table 3.11:
Personal Correspondence by Type of Internet Access
Figure 3.4:
Daily Personal E-mails Sent and Received
Table 3.12:
Business Correspondence Type (Sent and Received) by Sector (Millions of
Pieces)
Table 4.1:
Transactions Mail Sent and Received
Table 4.2:
Transactions Mail Received by Income and Education
Table 4.3:
Transactions Mail Sent by Income and Education
Table 4.4:
Transactions Mail Received by Income and Age
Table 4.5:
Transactions Mail Sent by Income and Age
Table 4.6:
Transactions Mail Received and Sent by Household Size
Table 4.7:
Transactions Mail Received and Sent by Number of Adults in Household
Table 4.8:
Transactions Mail Received and Sent by Internet Access
Table 4.9:
Income and Education by Type of Internet Access
Table 4.10:
Bill Payment by Method, FY 2005 2006 and 2007
Figure 4.1:
Monthly Average Household Bill Payment by Method
Figure 4.2:
Average Monthly Automatic Deductions per Household
Table 4.11:
Types of Bills Paid by Mail
Figure 4.3:
Average Bills Paid per Month by Income and Age
Figure 4.4:
Bill Payment Method by Age
Table 4.12:
Bill and Statement Volumes by Industry
Figure 4.5:
Statements Received by Mail by Income
Table 4.13:
Average Monthly Bills Received by Method
Table 5.1:
U.S. Advertising Spending by Medium, 2005-2007
Figure 5.1:
Direct Mail as a Share of Total Advertising, 1990-2007
Table 5.2: Advertising
Mail by Mail Classification
Table 5.3:
Advertising Mail by Mail Classification
Table 5.4:
Ad Mail Received by Income and Education
Table 5.5:
Ad Mail Received by Income and Age
Table 5.6:
Ad Mail Received by Size of Household
Table 5.7:
Ad Mail Received by Number of Adults
Table 5.8:
Ad Mail Received by Internet Access
Figure 5.2:
Advertising Volumes for First-Class and Standard Mail Advertising by
Sender Type
Figure 5.3:
Advertising Mail Behavioral Trends — 1987, 2005, 2006 and 2007
Figure 5.4:
Treatment of Standard Mail by Type
Table 5.9: Intended Response to Advertising Mail by
Class
Figure 5.6:
Weekly Number of Responses by Income
Figure 6.1:
Periodicals Mail Volume per Person – 1971 to 2007
Figure 6.2:
Real Per-Capita Consumer Magazine Advertising Spending
Table 6.1:
Periodical Type by Year
Figure 6.3:
Newspaper Circulation
Figure 6.4:
Daily Newspaper Readership – 1987 to 2007
Table 6.2:
Periodicals by Income and Education
Table 6.3:
Periodicals by Income and Age
Table 6.4:
Periodicals by Size of Household
Table 6.5:
Periodicals by Number of Adults in Household
Table 6.6:
Periodicals by Type of Internet Access
Figure 6.5:
Subscription Type by Year
Table 6.7:
Periodicals by Sender Type
Figure 6.6:
Number of Periodicals Received Per Week by Households by Income Group
Table 7.1:
Total Package Market Volume Growth
Figure 7.1:
Package Delivery Market Segment Share
Table 7.2:
Postal Service's Volume Market Share
Table 7.3:
FY 2007 Overnight Air Segment Statistics
Table 7.4:
FY 2007 Two- and Three-Day Air Segment Statistics
Table 7.5:
FY 2007 Ground Segment Statistics
Table 7.6:
Postal Service Sent and Received Packages, FY 2005, 2006 and FY 2007
Figure 7.2:
Postal Service Sent and Received Packages by Household Income
Table 7.7:
Postal Service Received Packages by Income and Age
Table 7.8:
Postal Service Sent Packages by Income and Age
Table 7.9:
Postal Service Received Packages by Income and Education
Table 7.10:
Postal Service Sent Packages by Income and Education
Table 7.11:
Postal Service Received and Sent Packages by Size of Household
Table 7.12:
Postal Service Received and Sent Packages by Number of Adults in Household
Table 7.13:
Received and Sent Packages by Household Internet Access
Table 7.14:
Contents of Postal Service Sent and Received Packages
This report documents the findings of the United States Postal Service’s Household Diary Study (HDS) for Fiscal Year (FY) 2007. The three main study purposes are to:
· Measure the mail sent and received by U.S. households,
· Provide a means to track household mail trends over time, and
· Make comparisons of mail use between different types of households.
The report examines these trends in the context of changes and developments in the wider markets for communications and package delivery.
The Household Diary Study survey, fielded continuously since 1987, aims to collect information on household use of the mail and how that use changes over time. The survey collects household information on demographics, lifestyle, attitudes toward mail and advertising, bill payment behavior, and use of the Internet and other information technologies.
The FY 2007 report covers Government Fiscal Year 2007, with comparisons to 2005 and 2006.
The HDS collects information on household mail use and provides a look
at how that use changes over time.
In 2007, U.S. households received 150.9 billion pieces of mail, and sent 21.2 billion, as seen in Table E.1. Mail sent or received by households constituted 79 percent of total domestic mail in FY 2007. Fifty-five percent of the mail households received was sent Standard Mail. Only four percent of household mail (and about three percent of total mail) was sent between households; the rest was sent between households and nonhouseholds.
Table E.1: : Mail
Received and Sent by Households
(Billions of Pieces)
Mail Classification |
Received |
Sent |
First-Class Mail |
58.9 |
20.8 |
Standard Regular Mail* |
69.9 |
— |
Standard Nonprofit Mail |
13.5 |
— |
Periodicals |
6.6 |
— |
Package Services** |
1.7 |
.3 |
Expedited |
.3 |
.2 |
Total |
150.9 |
21.2 |
Household to Household |
5.9 |
|
Total Mail Sent and Received by Households |
166.2 |
|
FY 2007 RPW Total*** |
211.4 |
|
Nonhousehold to Nonhousehold (Residual) |
45.2 |
|
Unaddressed |
12.6 |
— |
Source:
HDS Diary Sample, FY 2007.
Notes: Expedited includes Priority Mail
and Express Mail.
*Prior to 2007, Detached Address Labels (3 billion pieces in 2006) were counted
as separate pieces.
**Includes First-Class and Standard Mail packages.
***Does not include international mail.
The Household Diary Study examines mail by the markets it serves. This design cuts across classes, but provides a foundation for understanding mail flows and the marketplace changes that affect them. Table E.2 shows the volume of household mail by market for 2005 through 2007.
Thirty-five percent of household mail contains correspondence and transactions, down slightly from 36 percent in 2005. In part, the decline in the percentage of correspondence is a continuation of long-term trends, but it is also related to changing demographics. Younger households both send and receive fewer pieces of correspondence mail, a result of younger households’ comfort with and use of the Internet, and their lower average income level.
Table E.2: : Household
Mail Volume Received and Sent by Market Served
(Billions of Pieces)
Market |
2005 |
2006 |
2007 |
Correspondence |
16.6 |
15.3 |
14.6 |
Transactions |
42.7 |
42.7 |
43.3 |
Advertising* |
101.9 |
104.9 |
100.3 |
Periodicals |
6.7 |
6.7 |
6.6 |
Packages |
3.1 |
3.2 |
3.1 |
Unclassified |
3.8 |
5.0 |
6.2 |
Total |
167.0 |
170.2 |
166.2 |
Source:
HDS Diary Sample, FY 2005, 2006 and 2007.
Notes:
Correspondence and Transactions includes 7.9 billion pieces of First-Class
advertising-enclosed mail (excluded from totals).
Advertising excludes unsolicited samples of periodicals and packages
(0.2 billion pieces).
Package Volumes include ground packages and expedited.
Packages include 0.8 billion pieces of CD/DVD’s rentals sent to and received from
Netflix, Blockbuster, etc., reported in First- Class Mail letters
in Tables E.1, 1.5 and 1.6.
*Prior to 2007, Detached Address Labels (3 billion pieces in 2006) were counted
as separate pieces.
The increase in e-mail correspondence and the movement towards electronic bill payment have affected
mail volumes.
Electronic alternatives also affect transactions mail volume. Automatic deduction and Internet bill payment account for a growing share of household bill payments over time. In fact, over the past five years, the percentage of bills paid by electronic methods increased from 19 percent in 2003 to 32 percent in 2007. In contrast, bills paid by mail decreased from 74 percent to 62 percent of total payments during the same time. In-person payments have remained unchanged from 2003, with 7 percent of all bills paid in person in 2007. The number of bills and statements households received through the mail decreased on a per household basis, while the number of bills received over the Internet continues to grow rapidly.
Advertising mail represented more than half of all mail received by households in 2007. As shown in Table E.3, 83 percent of all advertising mail received by households is Standard Mail (83.4 billion pieces). The remainder consists of First-Class Mail; either stand-alone advertising (9.0 billion pieces), or secondary advertising that is sent along with other matter (7.9 billion pieces).
Over time, the data show a decline in the percentage of First-Class advertising mail.
Table E.3: : Advertising by Mail Class
Mail Classification |
Volume |
Percent of Total Advertising |
First-Class Advertising |
16.9 |
17% |
Standard Regular Mail |
69.9 |
70% |
Standard Nonprofit Mail |
13.5 |
13% |
Total Advertising Mail |
100.5 |
100% |
Source:
HDS Diary Sample, FY 2007.
Note: Total includes unsolicited
samples of packages and periodicals.
As shown in Table E.4, households received 6.6 billion pieces of Periodicals mail in 2007, slightly less than in 2006 and 2005. Nearly three-quarters of these were magazines. Newspapers are only 19% of total Periodicals, down from 35% in 1987. Contributors to the decline in newspaper volumes are lower circulation and readership levels as well as the growth of the Internet as an alternative delivery method.
Table E.4: : Periodical Type Received
Mail Classification |
Volume |
Percent of Total Periodicals |
Newspapers |
1.3 |
19% |
Magazines |
4.9 |
73% |
Unclassified |
0.5 |
8% |
Total |
6.6 |
100% |
Source: Household Diary Study, FY 2007.
In 2007, households received 2.5 billion and sent 742 million packages. Packages sent increased 11 percent over 2006. Delivery from mail order and Internet retailers is an important driver of package volume, and while the HDS data is not designed to quantify it, there are indications that online auction sites (like eBay) are responsible for some of the recent increase in packages sent by households.
Table E.5: : Packages
Received and Sent via the U.S. Postal Service
(Millions of Pieces)
Mail Classification |
2007 |
|||
Received |
Sent |
|||
Number |
Percent |
Number |
Percent |
|
First-Class Mail |
974 |
39% |
445 |
60% |
Expedited |
302 |
12% |
150 |
20% |
Standard Mail |
653 |
26% |
— |
— |
Package Services |
527 |
21% |
108 |
15% |
Unclassified |
71 |
3% |
39 |
5% |
Total Packages |
2,528 |
100% |
742 |
100% |
Source:
HDS Diary Sample, FY 2007.
Notes: : Totals
may not sum due to rounding.
Expedited includes Priority Mail and Express Mail.
First-Class Packages include 0.8 billion pieces of CD/DVD’s rentals sent to and
received from Netflix, Blockbuster, etc., reported in First- Class Mail letters
in Tables E.1, 1.5 and 1.6.
Chapter 1: Introduction –
Volumes & Trends
The U.S. Postal Service Household Diary Study (HDS) Report documents the findings of the Fiscal Year (FY) 2007 study. The HDS measures the mail sent and received by U.S. households, tracks household mail trends and compares mail use between different types of households.
The Household Diary Study provides a means to track
household mail trends over time.
· Demographics,
· Lifestyle,
· Attitudes toward mail and advertising,
· Bill payment behavior, and
· Use of the Internet and other information technologies.
These data are used for market research, forecasting, and strategic planning within the Postal Service.
The
Survey Consists of Two Parts:
1) An entry,
or recruitment, interview, conducted by phone or via web, collects
demographic, lifestyle, and attitudinal information from about 8,500
households.
2) These households then receive a mail diary, which collects information
on the mail the household sends and receives in a one-week period. Annually,
about 5,200 households successfully complete the diary.
The data generated by these two instruments are the basis of the analysis in this report.
The HDS FY 2007 report covers the period from October 2, 2006, through September 30, 2007, equivalent to the Government Fiscal Year (GFY) used by the Postal Service. Data from FY 2005 and FY 2006 are also reported on a GFY basis. Data from earlier years are presented on a Postal Fiscal Year basis, consisting of 52-week periods that shifted slightly in relation to calendar dates.
Serving a nation
containing five percent of the world’s population according to the Universal Ppostal
Union, the Postal Service delivers over 45 percent of the world’s mail. The
Postal Service delivered 212 billion pieces of mail in FY 2007 – a decrease of
almost 1 billion pieces from 2006. Standard Mail volume again exceeded
First-Class Mail in 2007, a trend seen for the first time in 2005 and repeated
in 2006. The 1.8 billion decrease in First-Class Single-Piece letters was a
major contributor to the change in mix, as it has been for the past several
years. In fact, since 1998, First-Class Single-Piece letters have decreased by
14.2 billion, or 26 percent, fueled, in part, by the gradual adoption of the
Internet and the general increase in electronic diversion of the mail.
The Postal Service estimates the revenues, volumes, and weight of mail pieces going through the postal network using a combination of statistical sampling systems, mailing statements, and accounting data. These data are published in the Revenue, Pieces, and Weight (RPW) Reports. Table 1.1 presents the RPW volumes for FY 2007, along with data for FY 1987, 2005, and 2006. This report makes frequent comparisons to those years.
Table 1.2 reports revenue, pieces, and weight data by class and shape for FY 2007.
· The letters column heading includes postcards and refers to pieces that are less than 11.5 inches wide by 6.125 inches tall, and less than .25 inches thick.
· Flats consist of pieces that are greater than 11.5 inches wide, 6.125 inches tall, or .25 inches thick, but less than 12 by 15 by .75 inches.
· Parcels are pieces that are larger than 12 by 15 inches, or thicker than .75 inches.
Because of the difficulty involved in recording mail piece characteristics in the Household Diary, these categories do not correspond precisely to the shape categories used by HDS respondents.
Table 1.3 is derived from Table 1.2. It shows the revenue per piece and weight per piece for each subclass of mail by shape.
Table 1.1: : Total Mail Volume: FY 1987, 2005,
2006 and 2007
(Billions of Pieces)
Mail Classification |
1987 |
2005 |
2006 |
2007 |
First-Class Mail: |
78.6 |
98.1 |
97.4 |
95.9 |
First-Class Letters: |
75.3 |
92.4 |
91.8 |
90.1 |
Single-Piece |
53.9 |
43.4 |
41.9 |
40.1 |
Workshare |
21.4 |
49.1 |
49.9 |
50.0 |
First-Class Cards: |
3.2 |
5.6 |
5.7 |
5.8 |
Single-Piece |
2.5 |
2.5 |
2.3 |
2.2 |
Workshare |
.8 |
3.1 |
3.4 |
3.6 |
Priority Mail |
.4 |
.9 |
.9 |
.9 |
Express Mail |
0 |
.1 |
.1 |
.1 |
Periodicals |
10.3 |
9.1 |
9.0 |
8.8 |
Standard Mail: |
59.4 |
100.9 |
102.5 |
103.5 |
Regular and ECR: |
48.3 |
85.9 |
87.9 |
88.7 |
Regular |
21.7 |
53.9 |
54.9 |
56.5 |
Enhanced Carrier Route |
26.6 |
32.0 |
33.0 |
32.2 |
Nonprofit and NP ECR: |
10.9 |
15.0 |
14.6 |
14.8 |
Nonprofit |
8.6 |
12.0 |
12.0 |
12.1 |
NP Enhanced Carrier
Route |
2.3 |
3.1 |
2.6 |
2.7 |
Package Services: |
.6 |
1.2 |
1.2 |
1.2 |
Parcel Post |
.1 |
.4 |
.4 |
.4 |
Other Domestic Mail |
.5 |
.7 |
1.1 |
1.1 |
International Mail |
.8 |
.9 |
.8 |
.8 |
Total |
153.2 |
211.7 |
213.0 |
212.2 |
Source: RPW Reports.
Note: Totals may not sum due to
rounding.
Table 1.2: : Total
Mail: Revenue, Pieces, and Weight by Shape, FY 2007
Mail Classification |
Revenue (Millions
of Dollars) |
Pieces (Millions
of Pieces) |
Weight (Millions
of Pounds) |
|||||||||
Letters |
Flats |
Parcels |
Total |
Letters |
Flats |
Parcels |
Total |
Letters |
Flats |
Parcels |
Total |
|
First-Class Mail: |
32,078 |
4,394 |
859 |
37,331 |
91,288 |
4,080 |
530 |
95,898 |
3,337 |
824 |
172 |
4,333 |
First-Class Letters: |
30,809 |
4,394 |
859 |
36,063 |
85,490 |
4,080 |
530 |
90,100 |
3,280 |
824 |
172 |
4,276 |
Single-Piece |
15,062 |
3,694 |
852 |
19,609 |
36,441 |
3,157 |
524 |
40,122 |
1,096 |
680 |
171 |
1,947 |
Workshare |
15,747 |
700 |
7 |
16,454 |
49,049 |
923 |
6 |
49,978 |
2,185 |
143 |
1 |
2,329 |
First-Class Cards: |
1,268 |
— |
— |
1,268 |
5,798 |
— |
— |
5,798 |
57 |
— |
— |
57 |
Single-Piece |
547 |
— |
— |
547 |
2,142 |
— |
— |
2,142 |
14 |
— |
— |
14 |
Workshare |
721 |
— |
— |
721 |
3,656 |
— |
— |
3,656 |
43 |
— |
— |
43 |
Priority Mail |
99 |
1,219 |
3,910 |
5,227 |
23 |
277 |
597 |
897 |
2 |
239 |
1,555 |
1,796 |
Periodicals |
22 |
2144 |
2 |
2,168 |
129 |
8,664 |
3 |
8,796 |
9 |
3,880 |
7 |
3,896 |
Standard Mail: |
11,256 |
8,876 |
541 |
20,673 |
63,807 |
39,042 |
667 |
103,516 |
3,058 |
8,424 |
334 |
11,815 |
Regular and ECR: |
9,931 |
8,289 |
518 |
18,738 |
52,587 |
35,513 |
632 |
88,732 |
2,506 |
7,902 |
317 |
10,726 |
Regular |
8,791 |
3,669 |
516 |
12,977 |
44,996 |
10,930 |
629 |
56,555 |
2,150 |
2,730 |
316 |
5,197 |
Enhanced Carrier Route |
1,139 |
4,620 |
2 |
5,761 |
7,591 |
24,583 |
4 |
32,177 |
356 |
5,172 |
1 |
5,530 |
Nonprofit and NP ECR: |
1,325 |
587 |
23 |
1,936 |
11,220 |
3,529 |
35 |
14,784 |
551 |
522 |
16 |
1,089 |
Nonprofit |
1,233 |
399 |
23 |
1,655 |
10,150 |
1,929 |
35 |
12,114 |
509 |
343 |
16 |
868 |
NP Enhanced |
92 |
188 |
0 |
281 |
1,070 |
1,600 |
0 |
2,670 |
42 |
179 |
0 |
221 |
Package Services: |
— |
342 |
1,960 |
2,302 |
— |
347 |
816 |
1,163 |
— |
464 |
2,844 |
3,309 |
Parcel Post |
— |
12 |
1,194 |
1,206 |
— |
3 |
346 |
349 |
— |
4 |
1,526 |
1,529 |
Total |
43,455 |
16,974 |
7,273 |
67,702 |
155,246 |
52,410 |
2,614 |
210,270 |
6,405 |
13,830 |
4,913 |
25,148 |
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
Express Mail |
|
|
|
951 |
|
|
|
55 |
|
|
|
53 |
Other Domestic Mail |
|
|
|
0 |
|
|
|
1,077 |
|
|
|
174 |
International Mail |
|
|
|
1,763 |
|
|
|
833 |
|
|
|
268 |
Total |
|
|
|
70,415 |
|
|
|
212,234 |
|
|
|
25,643 |
Source: RPW Reports.
Note: Revenue data do not include fees.
Totals may not sum due to rounding.
Table 1.3: : Total
Mail: Revenue and Weight per Piece by Shape, FY 2007
Mail Classification |
Revenue per Piece (Dollars) |
Weight per Piece (Ounces) |
||||||
Letters |
Flats |
Parcels |
Total |
Letters |
Flats |
Parcels |
Total |
|
First-Class Mail: |
.351 |
1.077 |
1.621 |
.389 |
.585 |
3.229 |
5.192 |
.723 |
First-Class Letters: |
.360 |
1.077 |
1.621 |
.400 |
.614 |
3.229 |
5.192 |
.759 |
Single-Piece |
.413 |
1.170 |
1.626 |
.489 |
.481 |
3.448 |
5.208 |
.776 |
Workshare |
.321 |
.758 |
1.156 |
.329 |
.713 |
2.483 |
3.824 |
.746 |
First-Class Cards: |
.219 |
— |
— |
.219 |
.158 |
— |
— |
.158 |
Single-Piece |
.256 |
— |
— |
.256 |
.108 |
— |
— |
.108 |
Workshare |
.197 |
— |
— |
.197 |
.186 |
— |
— |
.186 |
Priority Mail |
4.324 |
4.406 |
6.545 |
5.829 |
1.455 |
13.793 |
41.664 |
32.041 |
Periodicals |
.173 |
.247 |
.787 |
.247 |
1.058 |
7.165 |
37.661 |
7.086 |
Standard Mail: |
.176 |
.227 |
.811 |
.200 |
.767 |
3.452 |
8.003 |
1.826 |
Regular and ECR: |
.189 |
.233 |
.820 |
.211 |
.763 |
3.560 |
8.032 |
1.934 |
Regular |
.195 |
.336 |
.821 |
.229 |
.765 |
3.997 |
8.050 |
1.470 |
Enhanced Carrier Route |
.150 |
.188 |
.490 |
.179 |
.751 |
3.366 |
4.952 |
2.750 |
Nonprofit and NP ECR: |
.118 |
.166 |
.665 |
.131 |
.786 |
2.365 |
7.468 |
1.179 |
Nonprofit |
.121 |
.207 |
.667 |
.137 |
.802 |
2.841 |
7.497 |
1.146 |
NP Enhanced Carrier
Route |
.086 |
.118 |
.363 |
.105 |
.632 |
1.790 |
2.895 |
1.326 |
Package Services: |
— |
.984 |
2.403 |
1.980 |
— |
21.400 |
55.785 |
45.523 |
Parcel Post |
— |
3.944 |
3.456 |
3.460 |
— |
19.285 |
70.624 |
70.181 |
Total |
.280 |
.324 |
2.783 |
.322 |
.660 |
4.222 |
30.074 |
1.914 |
Other: |
|
|
|
|
|
|
|
|
Express Mail |
|
|
|
17.358 |
|
|
|
15.350 |
Other Domestic Mail |
|
|
|
.000 |
|
|
|
2.583 |
International Mail |
|
|
|
2.117 |
|
|
|
5.160 |
Total |
|
|
|
.332 |
|
|
|
1.933 |
Source: RPW Reports.
Mail volume can be broken into four basic flows, based on origin and destination. These flows are:
1)
Household to
household,
2)
Household to
nonhousehold,
3)
Nonhousehold to
household, and
4)
Nonhousehold to
nonhousehold.
Table 1.4a shows the total mail in each flow, and Table 1.4b shows pieces per household per week.
Table 1.4a:
Total Domestic Mail Flows
(Billions of Pieces)
Originating
|
Destinating In: |
||
Household |
Nonhousehold |
Total
Originating |
|
Household |
5.9 |
15.3 |
21.2 |
Nonhousehold |
145.0 |
45.2 |
190.2 |
Total Destinating |
150.9 |
60.5 |
211.4 |
Source: HDS Diary
Sample, FY 2007.
Note: Totals may not sum due to
rounding.
Table 1.4b: Domestic Mail Flows per Household per Week
Originating In: |
Destinating In: |
|
Household |
Nonhousehold |
|
Household |
1.0 |
2.5 |
Nonhousehold |
24.0 |
N/A |
Source: Household Diary Study, FY 2007.
As shown in Table 1.4a, domestic mail to and from households constituted almost 80 percent of total mail volume in 2007. This equates to 27.5 pieces per week sent and received by U.S. households. Table 1.5 presents the volumes of mail sent and received by households as estimated from the Household Diary Study. The table shows the categories in which the households record their mail. Households received 150.9 billion pieces of mail and sent 21.2 billion. Both of these totals include the 5.9 billion pieces of mail that households sent to each other. The total mail received or sent by households in FY 2007 was 166.2 billion pieces.
In FY 2007, households received 12.6 billion pieces of unaddressed mail. These pieces were predominately the flyers and inserts associated with Standard Mail pieces.
Table 1.5:
Mail Received and Sent by Households
(Billions of Pieces)
Mail Classification |
Received |
Sent |
First-Class Mail |
58.9 |
20.8 |
Standard Regular Mail* |
69.9 |
— |
Standard Nonprofit Mail |
13.5 |
— |
Periodicals |
6.6 |
— |
Packages** |
1.7 |
.3 |
Expedited |
.3 |
.2 |
Total |
150.9 |
21.2 |
Household to Household |
5.9 |
|
Total Mail Received and Sent by Households |
166.2 |
|
FY 2007 RPW Total*** |
211.4 |
|
Nonhousehold to Nonhousehold (Residual) |
45.2 |
|
Unaddressed |
12.6 |
Source: HDS Diary
Sample, FY 2007.
Notes: Expedited includes Priority Mail
and Express Mail.
*Prior to 2007, Detached Address Labels (3 billion pieces in 2006) were counted
as separate pieces.
**Includes First-Class and Standard Mail packages.
***Does not include international mail.
Table 1.6 presents these data in two other forms, annual volumes per household and pieces per household per week. Many of the subsequent results in this report are presented in terms of pieces per household per week.
Table 1.6: Pieces Received and Sent per Household
Classification |
Annual Pieces per HH |
Pieces per HH |
Mail Received |
|
|
First-Class Mail |
507 |
9.8 |
Standard Regular Mail* |
602 |
11.6 |
Standard Nonprofit Mail |
117 |
2.2 |
Periodicals |
57 |
1.1 |
Packages** |
15 |
.3 |
Expedited |
3 |
0 |
Total Mail Received |
1,301 |
25.0 |
Mail Sent |
|
|
First-Class Mail: |
179 |
3.4 |
Packages** |
2 |
0 |
Expedited |
1 |
0 |
Total Mail Sent |
183 |
3.5 |
Unaddressed |
108 |
2.1 |
Source: HDS Diary
Sample, FY 2007.
Notes: Totals may not sum due to rounding.
* Prior to 2007, Detached Address Labels (3 billion pieces in 2006) were
counted as separate pieces.
** Includes First-Class and Standard Mail packages.
· First-Class Mail is used to send transactional mail, correspondence and advertising. Because it is limited to pieces weighing thirteen ounces or less, it is primarily composed of letters and cards.
· Standard Mail is advertising mail. For the most part, Standard Mail is composed of letters and flats, although it contains a few postcards and packages as well.
· Periodicals are magazines and newspapers, and are predominantly flat shaped.
Priority Mail and Express Mail are expedited services for delivering correspondence, transactional mail, and merchandise. Priority and Express pieces can be of any shape except postcards.
· Package Services is used to deliver merchandise, books, catalogs, and media such as CDs and DVDs. Most of this mail is parcel shaped.
Table 1.7 crosswalks between classes of mail and the
markets they serve.
Table 1.7: : Mail Received and Sent by Households
Class |
Market (Billions of Pieces) |
|||||
Correspondence |
Transactions |
Advertising |
Periodicals |
Packages |
Total |
|
First Class Mail |
14.6 |
43.3 |
16.9 |
— |
1.3 |
68.3 |
Standard Mail |
— |
— |
83.4* |
— |
.6 |
84.0 |
Periodicals |
— |
— |
— |
6.6 |
— |
6.6 |
Priority Mail |
— |
— |
— |
— |
.3 |
.3 |
Express Mail |
— |
— |
— |
— |
.1 |
.1 |
Package Services |
— |
— |
— |
— |
.7 |
.7 |
Total |
14.6 |
43.3 |
100.3 |
6.6 |
3.1 |
160.0 |
Source: HDS Diary
Sample FY 2007.
Notes:
Correspondence and Transactions include 7.9 billion pieces of secondary
advertising mail also reported in Advertising Mail.
The “ Total” column does not include pieces that could not be identified
according to markets (Unclassified- see Table E.2).
Package Volumes include ground packages and expedited.
First-Class Packages include 0.8 billion pieces of CD/DVD’s rentals sent to and
received from Netflix, Blockbuster, etc., reported in First-Class Mail letters
in Tables E.1, 1.5 and 1.6.
* Prior to 2007, Detached Address Labels (3 billion pieces in 2006) were
counted as separate pieces.
The rest of the Household Diary Study report is organized around the markets the mail serves. Each chapter contains an analysis of the trends in the Household Diary Study data, as well as a discussion of how those trends impact and are impacted by changes in the broader market. The following provides an overview of each chapter.
Chapter 2: Profile of Mail Usage gives an analysis of household demographics. This chapter examines demographic trends over time and their impact on the mail, and discusses attributing factors, such as access to technology and changing attitudes.
Chapter 3: Correspondence examines mail that is used solely or primarily to deliver (non-sales-related) communications, such as letters and greeting cards. This chapter includes analysis of both personal and business correspondence.
Chapter 4: Transactions reviews financial transactions in the mail, and the impact of new technologies on that market. It analyzes household bill payment trends with a focus on technological and demographic change.
Chapter 5:
Advertising Mail presents the
trends in mail used to deliver sales-related messages.
It contains information on household attitudes towards advertising by various
media, treatment of advertising mail, and demographic determinants of
advertising mail receipt.
Chapter 6: Periodicals examines magazines and newspapers delivered in the mail. It looks at how changing demographics are affecting the market for periodicals, and what the implications are for future volume.
Chapter 7: Packages
analyzes household use of various types of parcels and express packages.
It discusses the household market for merchandise delivery and looks at the
market shares of the various parcel delivery companies.
In addition, there are three appendices to the report:
Appendix A contains
a set of comparative tables for FY 1987, 2006, and 2007, organized by class of
mail. A concordance is presented for comparison with pre-2000 reports.
New: Appendix A also includes several trend reports for 2000-2007.
Appendix B documents the study methodology and discusses how the data were collected, weighted and adjusted, and compares demographic data in the sample to that of the population as a whole.
Appendix C contains the instruments used to administer the survey.
Chapter 2: Profile of Mail Usage
This chapter provides information on demographic trends and other factors affecting mail volume, providing a basis for assessing mail volume growth. The breakouts introduced provide the basis for much of the analyses in subsequent chapters.
The first section looks at growth in mail volume, population, households, and delivery points over recent decades. The next section examines the demographic characteristics of mail users, contrasting higher mail volume households with lower volume households. The third section details the emerging demographic trends that will affect the future of mail. The last section examines some of the technological, behavioral, and attitudinal factors affecting mail.
Total U.S. mail volume grew from 110 billion pieces in 1981 to 212 billion in 2007, an increase of 93 percent. This growth outpaced the rate of population growth and household formation. Over the same period, according to the U.S. Census Bureau, adult population grew 36 percent and households grew by 41 percent. The number of places to which the Postal Service delivers increased still faster, growing by 51 percent (see the USPS annual report). As Table 2.1 shows, however, volume growth slowed dramatically over the last six years, while growth in population and households was much steadier.
Total U.S. mail volume increased 93% between1981 and 2007, outpacing population growth and household formation.
The 1980s was a time of extraordinary mail volume growth
that started in 1978 and continued through 1988. In 1984, mail volume grew more
than ten percent. During this period, technology facilitated this growth.
Construction of computerized databases and techniques for sorting large amounts
of data created a fertile climate for direct mail marketing. Computerization of
financial systems encouraged billing by mail and payments through the mail.
These innovations in business processes were further encouraged by postal
rates.
The Postal Service introduced worksharing discounts, encouraging mailers to
prepare the mail in ways that reduce the total system cost of creating and
delivering the mail. Mailers could take advantage of these discounts by sorting
the mail in advance. The Postal Service would receive the mail presorted to the
individual ZIP codes and/or to the carrier routes associated with those ZIP
codes.
In the late 1980s and early 1990s, mail volume growth barely kept pace with household growth. The demand for mail was hurt by a recession and two very large rate increases. This was also a period in which the Postal Service absorbed substantial costs that were reapportioned from the Federal government’s retirement programs.
Table 2.1: : Mail Volume and Demographics
Average Annual Growth 1981-2007
|
1981-1990 |
1991-2000 |
2001-2007 |
Total Mail Volume |
4.6% |
2.3% |
.4% |
Delivery Points |
1.7% |
1.5% |
1.2% |
Adult Population |
1.5% |
1.3% |
1.0% |
Households |
1.4% |
.9% |
1.2% |
Source: U.S. Postal Service, U.S. Census Bureau.
The last half of the 1990s saw rapid growth in mail volume, spurred by a strong economy and rates that increased by less than inflation. The Postal Service also realigned the incentives built into its price structure. It reduced the incentives mailers had for presorting mail and encouraged them to prebarcode it. By 2002, the majority of letters the Postal Service received had qualifying barcodes on them. This restructuring of the rates took advantage of the extensive automation of mail preparation and sorting that occurred over the previous decade.
The 1990s ended in a speculative bubble as the U.S. economy rapidly embraced information technology and integrated the Internet into its business processes. An economic recession followed that, according to the National Bureau of Economic Research, began in March 2001. The 2001 Government Fiscal Year ended with the terrorist attacks on the World Trade Center and the Pentagon. This led to large- scale disruptions of those mail services dependent on air transport such as First-Class, Priority, and Express Mail. When air service was restored, Priority Mail was no longer allowed on commercial passenger flights. GFY 2002 began with bio-terrorism. Lethal anthrax sent through the mail resulted in five deaths and a number of serious injuries. The 2.2 percent mail volume decline in 2002 was the worst since World War II. In 2003, Standard Mail volume recovered to a new high but total First-Class volume continued to decline. Workshared First-Class Mail fell for the first time ever. Since 2003, Standard Mail volume grew along with the economy, reaching new highs and exceeding First-Class Mail for the first time in 2005. Total First-Class volume, on the other hand, has continued to decline in part due to the diversion of bills and statements to electronic alternatives and to lower cost Standard Mail options.
Between 2001-2007, total mail volume grew a modest 2.3 percent while First-Class volume fell 7.5 percent. Nevertheless, the U.S. population grew about 6 percent and households grew 7 percent during the same period. The Postal Service added 7.5 percent more delivery points to its network.
Continued growth in delivery points will be an ongoing source of pressure
on Postal costs.
The Postal Service depends on mail volume growth to fund
universal service. The number of addresses the delivery network serves increases
as the number of American businesses and households grow. When mail volume
grows faster than the number of delivery points, the system benefits from
significant economies of scale. When mail volume grows slower, the Postal
Service’s ability to fund delivery service is hampered because the Postal
Service charges its customers for piece volume but does not assess connect
charges, access fees, or system fees, like many other network enterprises.
Over the next three years, according to the U.S. Census Bureau, both the total U.S. population and the adult population are projected to grow by approximately one percent a year. This is in line with the recent past. Households are expected to grow by about 1.2 percent a year. This should result in continued growth in the number of addresses the Postal Service serves, and in the resulting costs. Given recent mail volume trends, this presents a challenge. Continued growth in delivery points that exceeds volume growth could be an ongoing source of pressure on postal costs.
Characteristics of Higher- and Lower-Volume Households
Tables 2.2 and 2.3 show the demographic characteristics of households by the amount of mail received. It is apparent from these tables that household mail use is strongly correlated with both income and education. Note, however, the similar correlation between mail receipt and Internet access, which is also related to income and education. Therefore, households that make the most use of the mail are the households with the greatest opportunity to use alternatives to the mail.
These high-volume households are beginning to take
advantage of the opportunity to move away from the mail. Households that
receive 30 or more pieces of mail each week pay 21.1 percent of their bills by
Internet, up from 14.6 percent in 2005 and 16.5 percent in 2006. In comparison,
households that receive less than 30 pieces of mail each week paid 15.6 percent
of their bills online, up from 9.5 percent in 2005 and 13.9 percent in 2006.
Table 2.2: : Characteristics of Higher- and
Lower-Mail-Volume Households
Mail Received (Pieces per HH |
Households (Millions) |
Median Annual HH Income |
HHs w/ Internet Access (Percent) |
Annual Bills Paid (Millions) |
Annual (Millions) |
Mail Sent (Pieces per HH per week) |
20.5 |
$88,058 |
90% |
3,704 |
855 |
5.5 |
|
36-44 |
16.1 |
$73,736 |
86% |
2,637 |
540 |
4.3 |
30-35 |
15.4 |
$66,695 |
82% |
2,371 |
442 |
3.8 |
24-29 |
18.2 |
$56,522 |
78% |
2,587 |
477 |
3.1 |
18-23 |
18.2 |
$48,145 |
73% |
2,453 |
429 |
3.1 |
12-17 |
15.2 |
$36,424 |
68% |
1,957 |
259 |
2.3 |
Less than 12 |
12.4 |
$26,465 |
54% |
1,341 |
136 |
1.9 |
Total |
116.0 |
$57,477 |
77% |
17,049 |
3,137 |
3.4 |
Source: HDS Diary
Sample, FY 2007.
Note: Mail received includes USPS and
Non-USPS mail.
Table 2.3: : Education of Higher- and
Lower-Mail-Volume Households
Mail Received (Pieces per |
Households (Millions) |
Educational Attainment of Head of Household |
|||
Less
than |
High
School Graduate |
Some
College or Technical School |
College
Graduate |
||
45 or more |
20.5 |
7% |
22% |
19% |
52% |
36-44 |
16.1 |
8% |
28% |
24% |
40% |
30-35 |
15.4 |
11% |
28% |
24% |
37% |
24-29 |
18.2 |
11% |
31% |
25% |
33% |
18-23 |
18.2 |
18% |
35% |
21% |
25% |
12-17 |
15.2 |
19% |
35% |
27% |
19% |
Less than 12 |
12.4 |
27% |
34% |
23% |
16% |
Total |
116.0 |
14% |
30% |
23% |
33% |
Source: HDS Diary Sample, FY 2007.
Note: Percentages may not total 100%
due to heads of households who did not answer the educational attainment
question.
Mail received includes USPS and Non-USPS mail.
Percentages in this table are row percentages.
Excludes households not receiving any mail delivery at their home address
(using mailbox only).
Demographic Characteristics of U.S. Households
This section develops breakouts of households by demographic categories that influence the volume of mail sent and received. It looks at both traditional and newly emerging factors. The following chapters will show how mail volume varies with these household characteristics.
Income, Education, and Age
Traditionally, mail use was largely determined by household income, education and age. As Table 2.4 shows, income and education are strongly correlated with each other, as expected.
The relationship between income and age, shown in Table 2.5, is somewhat more complicated. Up to retirement, household income and age are fairly closely related. After retirement, households earn substantially less, although by that point mail behavior is pretty well set, and older households continue to receive similar amounts of advertising and periodicals, and pay similar amounts of bills, even though their income declines.
Table 2.4: : Households by Income and Education
(Millions of Households)
Household Income |
Educational Attainment of Head of Household |
Total |
|||
Less
than |
High
School Graduate |
Some
College or Technical School |
College
Graduate |
||
Under $35 |
9.2 |
10.2 |
6.9 |
3.3 |
29.6 |
$35 to $65 |
4.0 |
11.2 |
7.9 |
8.3 |
31.3 |
$65 to $100 |
1.3 |
8.1 |
6.4 |
10.8 |
26.6 |
Over $100 |
0.5 |
2.9 |
3.2 |
11.9 |
18.5 |
Don’t know / |
0.9 |
2.6 |
2.4 |
4.0 |
9.9 |
Total |
16.0 |
35.0 |
26.7 |
38.3 |
116.0 |
Source: HDS Diary
Sample, FY 2007.
Note: Totals may not sum due to
rounding.
Table 2.5: : Households
by Income and Age
(Millions of Households)
Household Income |
Age of Head of Household |
Total |
|||
Under 35 |
35 to 54 |
Over 55 |
Don’t Know/ Refused |
||
Under $35 |
7.7 |
7.3 |
14.6 |
— |
29.6 |
$35 to $65 |
8.5 |
11.9 |
10.9 |
— |
31.3 |
$65 to $100 |
5.5 |
13.5 |
7.6 |
— |
26.6 |
Over $100 |
2.9 |
10.6 |
5.0 |
— |
18.5 |
Don’t know / |
1.3 |
3.5 |
4.8 |
0.4 |
9.9 |
Total |
25.9 |
46.8 |
42.8 |
0.5 |
116.0 |
Source: HDS Diary Sample, FY 2007.
Note: Totals may not sum due to
rounding.
Household Size
The majority of U.S.
households include either one or two adults, but households with three or more
adults make up 16 percent of the total. Once considered the norm, nuclear
families - two adults and at least one child - now account for only 23 percent
of households (per the U.S. Census Bureau). The changing composition of
households impacted the amount and kinds of mail sent and received by
households over the past 20 years, generating more and different kinds of
advertising mail, as well as affecting transaction mail trends (bills tend to
be tied to households as much as to individuals).
Table 2.6: : Households by Size
(Millions of Households)
Household Size |
|
One person |
18.1 |
Two |
45.3 |
Three |
19.8 |
Four |
20.1 |
Five or more |
12.5 |
Don’t know / Refused |
.1 |
Total |
116.0 |
Source: HDS Diary
Sample, FY 2007.
Note: Total may not sum due to
rounding.
Table 2.7: : Households
by Number of Adults
(Millions of Households)
Number of Adults |
|
One |
21.8 |
Two |
76.5 |
Three or more |
17.8 |
Total |
116.0 |
Source: HDS Diary
Sample, FY 2007.
Note: Totals may not sum due to
rounding.
Internet Access
Access to and use of new technologies such as personal computers and the Internet have a large and growing impact on mail use. Although a significant number of pieces both sent and received by households are still related to bills and statements, electronic activity in this area is diverting mail once used for these purposes. On the other hand, on-line shopping potentially adds packages and catalog delivery to the Postal Service mailstream.
Table 2.8 shows that 77 percent of households have Internet access. The highest levels of access are within households with incomes over $100,000; 95 percent of such households have Internet access, as seen in Figure 2.1. In comparison, 42 percent of households with incomes under $35,000 have Internet access. For households without Internet access, 66 percent indicated they planned to purchase the service within the next year.
Table 2.8: : Households by Type of Internet
Access
(Millions of Households)
Type
of |
|
Broadband |
63.6 |
Dial-up |
25.8 |
None |
26.6 |
Total |
116.0 |
Source: HDS Diary
Sample, FY 2007.
Note: Totals may not sum due to
rounding.
Seventy-three percent of wired households, or 54 percent of the total, have broadband access (DSL, cable, or T1). Figure 2.2 shows the trend in broadband connections. The rapid growth of broadband expands the potential scope of electronic diversion of the mail. A fast, always-on connection to the Internet becomes a stronger alternative channel for the delivery of entertainment, information, and communication. As more households begin using broadband, we expect to see effects not only on bill payments, but also bill and statement presentment, periodicals, and perhaps even advertising mail.
Figure 2.1: : PC Ownership and Internet Access
(Percent of U.S. Households)
Household Income (Thousands) |
Own PC |
Internet Access |
under $35K |
53% |
42% |
$35K-$65K |
81% |
74% |
$65K-$100K |
93% |
90% |
$100K+ |
96% |
95% |
Don’t know/Refused |
74% |
67% |
Source: HDS Recruitment Data, FY 2007.
Figure 2.2: : Broadband Subscribers (Millions)
Calendar Year |
Broadband Subscribers |
1998 |
0.5 |
1999 |
1.4 |
2000 |
5.8 |
2001 |
11 |
2002 |
17.4 |
2003 |
24.6 |
2004 |
31 |
2005 |
40 |
2006 |
50.9 |
2007 |
61.1 |
Source: Leichtman Research Group.
A rented mailbox is one alternative that households use to
manage their mail. Households that rent mailboxes overwhelmingly use the Postal
Service for this service, with less than one percent of all households in the
U.S. renting a box from a private company. As seen in Figure 2.3, in most
cases, higher income households are slightly more likely to use a post office
box than lower income households, a pattern similar to prior years. OverallP, post
office box use, however, declined over the past six years, after 2001, largely
as a result of price increases, with less than 3.7 percent of U.S. households
renting a box from the Postal Service in 2007, compared to ten percent in
2001.
The Postal Service currently owns and operates almost 37 thousand post office locations throughout the United States. As shown in Figure 2.4, the use of post offices for mailing services continues to dominate the mail service industry. Over 83 percent of all U.S. households patronize a post office at least once a month, while just eleven percent visit a private mailing company. Over 35 percent of all households in the U.S. visit the post office three or more times in a month. Even with the continued availability of mail-related products and services through alternative modes (such as Internet orders), in-person visits to postal facilities remain stable. Only a little more than 10% of households visited private mailing companies in both 2006 and 2007.
Figure 2.3: : Household Use of Rented Mailboxes
Household Income |
USPS |
Private Service |
under $35K |
3.2% |
1.6% |
$35K-$65K |
3.5% |
0.8% |
$65K-$100K |
3.6% |
1.3% |
$100K+ |
3.9% |
1.4% |
Source: HDS Recruitment Data, FY 2007.
Figure 2.4: : Household Visits to Post Office in
Past Month
Number of Visits |
USPS |
Private
Service |
||
2006 |
2007 |
2006 |
2007 |
|
1 - 2 |
44% |
48% |
9% |
9% |
3 - 6 |
29% |
26% |
2% |
2% |
7 or more |
12% |
9% |
1% |
0% |
Source: HDS Recruitment Data, FY 2006 and 2007.
This chapter examines correspondence mail among households and between households and businesses including letters, greeting cards, invitations, and announcements. In several cases, this chapter and several following it examine comparisons in data between 2005 and 2007, providing a better illustration of mail trends over time
Total correspondence sent and received represents about 9 percent of all household mail volumes, as shown in Table E.2. Below, Table 3.1 provides a recent history of total correspondence volumes, showing a 12 percent decline from 2005 to 2007. Personal correspondence, which is essentially household to household mail, continues to decline as it has for more than 15 years. In 1987, households reported receiving 1.6 pieces of personal correspondence each week. By 2007, personal correspondence received declined to 0.9 pieces per household per week.
To a large extent, this decline stemmed from changes in communication technology such as affordable long distance telephone service and more recently, e-mail, the Internet, and cellular communications – all of which provide an alternative to personal letters and business inquiries. Such advances completely transformed the marketplace and continue to have an impact on personal correspondence.
Correspondence Mail and Household Characteristics
The following tables break down correspondence mail sent and received by households using the demographic categories developed in Chapter 2.
Income, Education and Age
Table 3.2 on the following page shows that both household income and educational attainment have a strong effect on correspondence received. However, as Table 3.3 shows, within a given educational category, income has much less of an effect on the amount of correspondence mail a household sends.
Table 3.1: : First Class Correspondence Mail Sent
and Received by Sector
Sector |
Volume (Millions of
Pieces) |
Change, 2005-2007 |
||
2005 |
2006 |
2007 |
||
HH to HH |
5,870 |
6,079 |
5,610 |
-4.4% |
NHH to HH |
8,647 |
7,227 |
6,896 |
-20.2% |
HH to NHH |
2,119 |
2,034 |
2,132 |
.6% |
Total |
16,636 |
15,340 |
14,638 |
-12.0% |
Sector |
Pieces per Household per
Week |
Share of 2007 Total |
||
2005 |
2006 |
2007 |
||
HH to HH |
1.0 |
1.0 |
.9 |
38.3% |
NHH to HH |
1.5 |
1.2 |
1.1 |
47.1% |
HH to NHH |
.4 |
.3 |
.4 |
14.6% |
Total |
2.8 |
2.6 |
2.4 |
|
Source: HDS Diary
Sample, FY 2005, 2006 and 2007.
Notes:
2006 Sent volumes were revised due to an understated adjustment factor.
Totals may not sum due to rounding.
Table 3.2: : Correspondence Mail Received by
Income and Education
(Pieces per Household per Week)
Household Income (Thousands) |
Educational Attainment
of Head of Household |
Average |
|||
Less than |
High School Graduate |
Some College or Technical School |
College Graduate |
||
Under $35 |
1.5 |
1.3 |
1.6 |
1.4 |
1.5 |
$35 to $65 |
1.8 |
1.7 |
2.2 |
2.0 |
1.9 |
$65 to $100 |
3.7 |
2.2 |
2.1 |
2.6 |
2.4 |
Over $100 |
2.2 |
2.2 |
2.4 |
3.0 |
2.7 |
Average |
1.8 |
1.8 |
2.0 |
2.5 |
2.1 |
Source: HDS Diary
Sample, FY 2007.
Note: Excludes Don’t Know/Refused.
Table 3.3: : Correspondence Mail Sent by Income
and Education
(Pieces per Household per Week)
Household Income |
Educational Attainment
of Head of Household |
Average |
|||
Less than |
High School Graduate |
Some College or Technical School |
College Graduate |
||
Under $35 |
1.0 |
1.1 |
1.1 |
1.0 |
1.0 |
$35 to $65 |
.8 |
1.0 |
1.4 |
1.4 |
1.2 |
$65 to $100 |
1.4 |
1.3 |
1.2 |
1.6 |
1.4 |
Over $100 |
.5 |
1.1 |
1.4 |
1.7 |
1.6 |
Average |
1.0 |
1.1 |
1.3 |
1.5 |
1.3 |
Source: HDS Diary
Sample, FY 2007.
Note: Excludes Don’t Know/Refused.
Tables 3.4 and 3.5 show that age also has a considerable effect on correspondence mail sent and received by households. Regardless of their income, younger households both send and receive fewer pieces of correspondence mail, though correspondence mail received (per household per week) is up from 2006 for the first two income categories among those under age 34. Young adults traditionally send and receive less mail than older adults, but the advent of the Internet age widened the gap between these two age groups.
Table 3.4: : Correspondence Mail Received by
Income and Age
(Pieces per Household per Week)
Household Income |
Age of Head of Household |
Average |
||
Under 34 |
35 to 54 |
Over 55 |
||
Under $35 |
1.3 |
1.4 |
1.6 |
1.5 |
$35 to $65 |
1.7 |
1.8 |
2.2 |
1.9 |
$65 to $100 |
1.8 |
2.7 |
2.4 |
2.4 |
Over $100 |
1.8 |
2.8 |
3.1 |
2.7 |
Average |
1.6 |
2.2 |
2.2 |
2.1 |
Source: HDS Diary Sample, FY 2007.
Table 3.5: : Correspondence Mail Sent by Income
and Age
(Pieces per Household per Week)
Household Income |
Age of Head of Household |
Average |
||
Under 34 |
35 to 54 |
Over 55 |
||
Under $35 |
.8 |
.9 |
1.2 |
1.0 |
$35 to $65 |
.9 |
1.0 |
1.5 |
1.2 |
$65 to $100 |
1.1 |
1.5 |
1.6 |
1.4 |
Over $100 |
1.3 |
1.6 |
1.7 |
1.6 |
Average |
1.0 |
1.3 |
1.4 |
1.3 |
Source: HDS Diary Sample, FY 2007.
Household Size
As expected, household size has a positive impact on correspondence mail. Tables 3.6 and 3.7 show that the jump from one person to two is associated with considerable jumps in correspondence mail volume, although further increases in size do not have nearly the same effect. As shown in Table 3.7, these increases are generally due to the presence of an additional adult in the household.
Table 3.6: : Correspondence Mail Received and
Sent
by Household Size
(Pieces per Household per Week)
Household Size |
Received |
Sent |
One person |
1.3 |
.9 |
Two |
2.1 |
1.4 |
Three |
2.1 |
1.2 |
Four |
2.4 |
1.4 |
Five or more |
2.6 |
1.6 |
Total |
2.1 |
1.3 |
Source: HDS Diary Sample, FY 2007.
Table 3.7: : Correspondence
Mail Received and Sent
by Number of Adults in Household
(Pieces per Household per Week)
Number of Adults |
Received |
Sent |
One |
1.3 |
.8 |
Two |
2.2 |
1.4 |
Three or more |
2.5 |
1.4 |
Average |
2.1 |
1.3 |
Source: HDS Diary Sample, FY 2007.
Internet Access
Households with Internet access (Broadband and Dial-up) also tend to send and receive more correspondence mail than households without such service. The explanation for this somewhat counterintuitive result is the high correlation among income, educational attainment, and the presence of an Internet connection in the home. As Table 3.9 shows, households with Internet access have a greater average income than households without. Similarly, households with Internet access have a higher level of education than households without. In fact, these correlations could be a warning sign for mail, since more volume goes to households that are vulnerable to diversion.
Table 3.8: Correspondence Mail Received and Sent by Type of Internet Access
(Pieces per Household per Week)
Received |
Sent |
|
Broadband |
2.3 |
1.3 |
Dial-up |
2.2 |
1.4 |
None |
1.5 |
1.1 |
Average |
2.1 |
1.3 |
Source: HDS Diary Sample, FY 2007.
Table 3.9: Income and Education by Type of Internet Access
(Pieces per Household per Week)
Type of Internet Access |
Median Income |
% w/ College Degree |
Broadband |
77,880 |
39% |
Dial-up |
56,671 |
24% |
None |
36,033 |
11% |
Source: HDS Diary Sample, FY 2007.
In FY 2007, personal correspondence accounted for an average 0.9 pieces per week, .1 less than in 2005 and 2006. Table 3.10 shows the total volumes and average number of pieces by personal correspondence type.
The drop in “other” accounts for most of the per-household decrease in personal correspondence mail between 2005 and 2007. The number of Internet greeting cards declined by a much greater percentage than mailed correspondence.
Table 3.10: : Personal Correspondence Sent and
Received
Correspondence Type |
Volume (Millions of
Pieces) |
Change, 2005-2007 |
||
2005 |
2006 |
2007 |
||
Personal Letters |
1,227 |
1,138 |
1,116 |
-9.1% |
Holiday Greeting Cards |
2,169 |
2,612 |
2,117 |
-2.4% |
Non-Holiday Greeting Cards |
1,418 |
1,323 |
1,454 |
2.5% |
Invitations |
657 |
566 |
597 |
-9.2% |
Announcements |
124 |
141 |
130 |
4.9% |
Other Personal |
275 |
299 |
196 |
-28.7% |
Total |
5,870 |
6,079 |
5,610 |
-4.4% |
Internet Cards |
1,399 |
999 |
942 |
-32.6% |
Correspondence Type |
Pieces per Household per
Week |
Share of 2007 Total |
||
2005 |
2006 |
2007 |
||
Personal Letters |
.2 |
.2 |
.2 |
17.0% |
Holiday Greeting Cards |
.4 |
.4 |
.4 |
32.3% |
Non-Holiday Greeting Cards |
.2 |
.2 |
.2 |
22.2% |
Invitations |
.1 |
.1 |
.1 |
9.1% |
Announcements |
0 |
0 |
0 |
2.0% |
Other Personal |
0 |
.1 |
0 |
3.0% |
Total |
1.0 |
1.0 |
.9 |
85.6% |
Internet Cards |
.2 |
.2 |
.2 |
14.4% |
Source: HDS Diary
Sample, FY 2005, 2006 and 2007.
Notes:
Totals may not sum due to rounding.
2006 Sent volumes were revised due to an understated adjustment factor.
Figure 3.1: : Personal Correspondence Sent by
Income Group
(Pieces per Household per Year)
Household Income |
Letters |
Holiday |
Greeting Cards |
Internet Cards |
Under $35 |
7.4 |
17.1 |
8.1 |
4.6 |
$35 to $65 |
8.9 |
17.1 |
12.6 |
9.3 |
$65 to $100 |
10.8 |
20.4 |
13.5 |
10.8 |
Over $100 |
11.8 |
18.2 |
17.4 |
8.9 |
Source: HDS Diary Sample, FY 2007.
Figure 3.2: : Personal Correspondence Sent by Age
Cohort
(Pieces per Household per Year)
Age |
Letters |
Holiday |
Greeting Cards |
Internet Cards |
Under 35 |
8.3 |
9.8 |
9.8 |
12.1 |
35 to 54 |
8.7 |
19.3 |
12.1 |
8.1 |
Over 55 |
11.3 |
22.4 |
14.7 |
5.8 |
Source: HDS Diary Sample, FY 2007.
Figure 3.1 above shows the major personal correspondence types by income. Personal correspondence sent by households varies with household income; for example, in 2007, households with higher incomes (above $65,000 annually) were more likely to send letters, holiday cards, and non-holiday greeting cards than were lower-income households.
The largest disparity between high- and low-income households is in the volume of non-holiday greeting cards sent. Households with incomes over $100,000 sent an average of 17 non-holiday greeting cards in FY 2007, compared to the 8 sent by households with incomes under $35,000.
There seems to be a direct relationship between household income and use of Internet greeting cards, which makes sense in light of the number of higher-income households with Internet service compared to lower-income households.
The number of letters and greeting cards sent varies across age groups (Fig. 3.2). Households where the head is 55 years or older sent more letters and holiday greeting cards through the mail (an average of 11 letters and 22 holiday greeting cards in 2007). They also sent an average of 15 non-holiday cards.
In comparison, households under the age of 35 sent an average of 8 letters and 10 holiday greeting cards in FY 2007, along with 10 non-holiday cards. Younger households (under 35 years old) sent about 23 percent more (12) Internet cards than traditional, mailed non-holiday greeting cards, while households whose heads are 55 or over sent less than half as many Internet cards (6) as they sent traditional cards (15) through the mail.
The relationship between holiday greeting cards received and income is shown in Figure 3.3. Households with incomes between $65,000 and $100,000 received the greatest number of holiday greeting cards during FY 2007 (20.4) compared to FY 2006 when the highest income households received the most holiday cards (33.1). Households with incomes less than $35,000 received more holiday cards in 2007 than in 2005 or 2006, while all other income levels received fewer holiday cards.
When examined by age, the number of holiday greeting cards received decreased since 2005 for all age categories, although the numbers spiked a bit in FY 2006 for the top and bottom income groups.
Households where the head of household is age 55 or older received the largest average number of holiday greeting cards – an average of 22.4 pieces in 2007 – yet that number decreased 34 percent from 2006 (34.1 pieces).
Figure 3.3: : Holiday Greetings Received by Age
and Income, FY 2005, 2006 and 2007 (Pieces per Household per Year)
Household Income |
2005 |
2006 |
2007 |
Under $35 |
10.5 |
14.2 |
17.1 |
$35 to $65 |
18.5 |
26.1 |
17.1 |
$65 to $100 |
25.5 |
21.8 |
20.4 |
Over $100 |
23.8 |
33.1 |
18.2 |
Age |
2005 |
2006 |
2007 |
Under 35 |
9.9 |
10.9 |
9.8 |
35 to 54 |
20.9 |
19.5 |
19.3 |
Over 55 |
23.2 |
34.1 |
22.4 |
Source: HDS Diary
data, Diary Sample only, FY 2005, 2006 and 2007.
Note: 2006 Sent volumes were revised
due to an understated adjustment factor.
As shown in Table 3.11, households with Internet access (including both broadband and dial-up) receive more letters and non-holiday greeting cards, compared to households without Internet access.
In examining household Internet use, we find that 75 percent of all persons who have Internet access send at least one personal e-mail during a typical day and 84 percent receive at least one e-mail. Figure 3.4 shows the number of personal e-mails sent and received in a typical day by those that have used e-mail in the past 12 months.
Table 3.11: : Personal Correspondence by Type of
Internet Access
(Pieces per Household per Week)
Correspondence Type |
No Internet Access |
Dial-up |
Broadband |
Personal
Letters |
.16 |
.17 |
.20 |
Holiday
Greeting Cards |
.33 |
.44 |
.33 |
Non-Holiday
Greeting Cards |
.20 |
.23 |
.26 |
Total |
.69 |
.85 |
.79 |
Source: HDS Diary Sample FY 2007.
Figure 3.4: Daily Personal E-mails Sent and Received (Percent of E-mail Users)
Number of Daily Personal Emails |
Sent |
Received |
0 |
25% |
16% |
1 to 3 |
46% |
31% |
4 to 6 |
17% |
22% |
7 to 10 |
7% |
13% |
11 or more |
6% |
18% |
Source: HDS Recruitment Sample, FY 2007.
Households and businesses exchange many types of mail, including bill payment, statements and advertising–which are discussed in Chapters 4 and 5. This section of the report provides data on correspondence types between households and businesses.
Table 3.12 outlines volumes by correspondence type for 2005 through 2007. Correspondence received from the non-household sector accounts for 47 percent of total correspondence volumes. Invitations and announcements comprise the largest correspondence volumes from nonhouseholds (3.1 billion).
Table 3.12: Business Correspondence Type (Sent and Received) by Sector (Millions of Pieces)
Business Correspondence Type |
2005 |
2006 |
2007 |
Change, 2005-2007 |
Business/Government/Social Received by Households |
|
|
|
|
Invitation/Announcement |
4,161 |
3,264 |
3,121 |
-25.0% |
Holiday Greeting from
Business |
500 |
421 |
382 |
-23.7% |
Other Business/Government |
1,667 |
1,343 |
852 |
-48.9% |
Total Business Received |
6,328 |
5,029 |
4,355 |
-31.2% |
Announcement |
1,827 |
1,761 |
2,208 |
20.9% |
Other Social |
491 |
437 |
333 |
-32.2% |
Total Social Received |
2,318 |
2,198 |
2,541 |
9.6% |
Total Received |
8,647 |
7,227 |
6,896 |
-20.2% |
Business/Government/Social Sent by Households |
|
|
|
|
Inquiry |
549 |
583 |
560 |
1.9% |
Other Business/Government |
1,153 |
1,078 |
1,118 |
-3.0% |
Total Business Sent |
1,702 |
1,662 |
1,678 |
-1.4% |
Letter |
178 |
124 |
138 |
-22.4% |
Inquiry |
60 |
44 |
81 |
35.5% |
Other Social |
179 |
205 |
235 |
31.3% |
Total Social Sent
(Social includes social, political & nonprofit.) |
417 |
372 |
454 |
9.0% |
Total Sent |
2,119 |
2,034 |
2,132 |
0.6% |
Source: HDS Diary
Sample, FY 2005, 2006 and 2007.
Notes: 2006 Sent volumes were revised
due to an understated adjustment factor.
Totals may not sum due to rounding.
This chapter examines the volumes and trends in transactions mail: the bills, statements, payments, donations, rebates, and orders sent and received by households. Information is presented on household bill payment trends, which is of particular interest due to the availability of electronic alternatives to traditional mail payments.
Transactions sent and received comprise about 26 percent of all household mail volumes (as seen in Table E-2) and 54 percent of household First-Class Mail; as such, they are an important part of the mailstream. Although many businesses now use electronic funds transfer (EFT) or other electronic technologies to settle transactions, households still pay a majority of their recurring bills through the Postal Service. As the Internet becomes more ubiquitous, however, the movement towards consumer electronic bill presentment and payment (EBPP) continues to gain momentum.
Transactions comprise 54 percent of Household First-Class Mail.
As Table 4.1 shows, the total transactions volume increased 1.3 percent between 2005 and 2007. Increases in confirmations, statement presentments and bills contributed to the growth, partly offset by a 5.6 percent decrease in bill payments. Electronic diversion continues to erode the volume of mail payments in favor of online payments, automatic deductions from bank accounts and other electronic methods of bill payment. As a result, the share of bills paid by mail dropped from 25.3 percent of total mail transactions in 2005 to 23.6 percent in 2007. The growth in non-mail methods of payments is also evident from Table 4.1, which shows that bills paid by mail are much lower than total bills received.
Table 4.1: Transactions Mail Sent and Received
Transaction Type |
Volume (Millions of Pieces) |
Change, 2005-2007 |
||
2005 |
2006 |
2007 |
||
Business |
|
|
|
|
Bills |
18,656 |
19,080 |
18,788 |
.7% |
Bill Payments |
10,809 |
9,949 |
10,202 |
-5.6% |
Statements |
6,594 |
6,920 |
7,133 |
8.2% |
Confirmations |
2,518 |
2,738 |
3,242 |
28.7% |
Payments (to HH) |
1,437 |
1,439 |
1,418 |
-1.3% |
Orders |
769 |
612 |
560 |
-27.2% |
Rebates |
206 |
173 |
169 |
-17.9% |
Total Business |
40,990 |
40,911 |
41,512 |
1.3% |
Social/Charitable |
|
|
|
|
Requests for Donation |
636 |
708 |
733 |
15.2% |
Donations |
560 |
524 |
550 |
-1.9% |
Bill |
184 |
212 |
194 |
5.6% |
Confirmations |
324 |
355 |
273 |
-15.7% |
Total Social/Charitable |
1,704 |
1,798 |
1,749 |
2.7% |
Total Transactions |
42,694 |
42,709 |
43,261 |
1.3% |
Table 4.1: Transactions Mail Sent and Received (cont.)
Transaction Type |
Pieces per Household per Week |
Share of 2007 Total |
||
2005 |
2006 |
2007 |
||
Business |
|
|
|
|
Bills |
3.2 |
3.2 |
3.1 |
43.4% |
Bill Payments |
1.8 |
1.7 |
1.7 |
23.6% |
Statements |
1.1 |
1.2 |
1.2 |
16.5% |
Confirmations |
.4 |
.5 |
.5 |
7.5% |
Payments (to HH) |
.2 |
.2 |
.2 |
3.3% |
Orders |
.1 |
.1 |
.1 |
1.3% |
Rebates |
0 |
0 |
0 |
.4% |
Total Business |
7.0 |
6.9 |
6.9 |
96.0% |
Social/Charitable |
|
|
|
|
Requests for Donation |
.1 |
.1 |
.1 |
1.7% |
Donations |
.1 |
.1 |
.1 |
1.3% |
Bill |
0 |
0 |
0 |
.4% |
Confirmations |
.1 |
.1 |
0 |
.6% |
Total Social/Charitable |
.3 |
.3 |
.3 |
4.0% |
Total Transactions |
7.3 |
7.2 |
7.2 |
100% |
Source: HDS Diary
Sample, FY 2005, 2006 and 2007.
Note: 2006 Sent volumes were revised due to an understated adjustment factor in
the 2006 HDS.
Transactions Mail and Household Characteristics
The following tables break down transactions mail sent and received by households based on the demographic categories introduced in Chapter 2.
Income, Education, and Age
As seen in Tables 4.2 and 4.3, household income and educational attainment influence the amount of transaction mail sent and received – to some extent, income has an even greater impact on transaction mail sent and received than education. The basis for this relationship is fairly clear; higher income and better-educated households, on average, have more financial accounts, insurance policies, and credit cards – all generators of transactions mail volume.
Table 4.2:
Transactions Mail Received by Income and Education
(Pieces per Household per Week)
Household Income (Thousands) |
Educational Attainment of Head of Household |
Average |
|||
Less
than |
High
School Graduate |
Some
College or Technical School |
College
Graduate |
||
Under $35 |
3.2 |
3.8 |
3.5 |
3.7 |
3.6 |
$35 to $65 |
4.6 |
5.2 |
5.2 |
5.3 |
5.2 |
$65 to $100 |
6.1 |
6.2 |
6.0 |
6.0 |
6.1 |
Over $100 |
6.2 |
7.3 |
6.8 |
7.1 |
7.0 |
Average |
4.0 |
5.2 |
5.1 |
6.0 |
5.3 |
Source: HDS Diary Sample, FY 2007.
Table 4.3: : Transactions Mail Sent by Income and
Education
(Pieces per Household per Week)
Household Income (Thousands) |
Educational Attainment of Head of Household |
Average |
|||
Less
than |
High
School Graduate |
Some
College or Technical School |
College
Graduate |
||
Under $35 |
1.3 |
1.6 |
1.2 |
1.6 |
1.4 |
$35 to $65 |
2.0 |
2.0 |
1.7 |
1.9 |
1.9 |
$65 to $100 |
2.5 |
2.4 |
2.2 |
2.0 |
2.2 |
Over $100 |
1.3 |
2.3 |
2.0 |
2.0 |
2.0 |
Average |
1.6 |
2.0 |
1.8 |
1.9 |
1.9 |
Source: HDS Diary Sample, FY 2007.
Tables 4.4 and 4.5 also show that age has a strong effect on transactions mail, independent of income. Across all income categories, younger households send and receive less transactions mail. In part, this is due to the fact that such households are less likely to own their home and have fewer insurance policies, investments, and the like. However, it is also the case that these households are more active users of electronic alternatives to traditionally mail-based transactions. This is especially evident for transactions mail sent (primarily bill payments) where households under 35 years old sent only about 48 percent as much mail as older households.
Table 4.4: : Transactions Mail Received by Income
and Age
(Pieces per Household per Week)
Household Income |
Age of Head of Household |
Average |
||
Under
35 |
35
to 54 |
Over
55 |
||
Under $35 |
2.8 |
3.7 |
3.9 |
3.6 |
$35 to $65 |
4.5 |
5.5 |
5.4 |
5.2 |
$65 to $100 |
5.3 |
6.1 |
6.6 |
6.1 |
Over $100 |
6.4 |
6.9 |
7.8 |
7.0 |
Average |
4.3 |
5.7 |
5.4 |
5.3 |
Source: HDS Diary Sample, FY 2007.
Table 4.5: : Transactions Mail Sent by Income and
Age
(Pieces per Household per Week)
Household Income |
Age of Head of Household |
Average |
||
Under
35 |
35
to 54 |
Over
55 |
||
Under $35 |
.9 |
1.3 |
1.8 |
1.4 |
$35 to $65 |
1.4 |
1.9 |
2.3 |
1.9 |
$65 to $100 |
1.5 |
2.2 |
2.7 |
2.2 |
Over $100 |
1.0 |
1.9 |
2.9 |
2.0 |
Average |
1.2 |
1.9 |
2.3 |
1.9 |
Source: HDS Diary Sample, FY 2007.
Household Size
In terms of household size, Table 4.6 shows that going from a one-person household to a two-person household adds 1.8 pieces of transaction mail per week received and .4 pieces per week sent, but larger household size has little effect on volume.
Table 4.6: : Transactions Mail Received and Sent
by Household Size
(Pieces per Household per Week)
Household Size |
Received |
Sent |
One person |
3.4 |
1.6 |
Two |
5.2 |
2.0 |
Three |
5.9 |
2.0 |
Four |
6.0 |
1.9 |
Five or more |
6.2 |
1.7 |
Average |
5.3 |
1.9 |
Source: HDS Diary Sample, FY 2007.
For transactions mail received, Table 4.7 shows that each additional adult adds about 1.5 pieces (on average) of mail received per week. However, one additional adult generates only .4 pieces of extra mail sent and further changes have little effect on volume.
Table 4.7: Transactions Mail Received and Sent by Number of Adults in
Household
(Pieces per Household per Week)
Number
of |
Received |
Sent |
One |
3.6 |
1.5 |
Two |
5.5 |
1.9 |
Three or more |
6.6 |
2.1 |
Average |
5.3 |
1.9 |
Source: HDS Diary Sample, FY 2007.
Internet Access
Table 4.8 shows that households with Internet access (Broadband or Dial-up) receive more transactions mail than households without Internet service, even though having an Internet connection at home should make transactions more susceptible to electronic diversion. As shown in Table 4.9, this apparent contradiction is explained in large measure through the fact that household Internet access is strongly correlated to income and education.
In Table 4.8, we also see that while the number of transactions sent by households with Broadband is higher than for households without access (mainly due to the higher income of households with Internet access), it is also lower than the number for Dial-up users. This is an indication that diversion of bill payments and other transactions is likely to increase as more households upgrade to Broadband, as a higher connection speed may lead to easier and faster online transactions.
Table 4.8: : Transactions Mail Received and Sent
by Internet Access
(Pieces per Household per Week)
Type
of |
Received |
Sent |
Broadband |
5.7 |
1.8 |
Dial-up |
5.5 |
2.2 |
None |
4.1 |
1.7 |
Average |
5.3 |
1.9 |
Source: HDS Diary Sample, FY 2007.
Table 4.9: Income and Education by Type of Internet Access
(Pieces per Household per Week)
Type
of |
Median Income |
% w/ College Degree |
Broadband |
77,880 |
39% |
Dial-up |
56,671 |
24% |
None |
36,033 |
11% |
Source: HDS Diary Sample, FY 2007.
The average number of bills paid per month per household in 2007 was 12.1 – slightly higher than in 2005 and 2006 (11.9 and 11.8, respectively). Households use a variety of methods to pay bills. Historically, they have been paid in person, via phone, or by mail. In the past decade, emerging technologies provided additional bill receipt and payment options. The most important of these are automatic deduction and on-line bill payment.
The Household Diary Study measures bill payment by all of these methods.
Table 4.10 shows the percentage of households who pay bills by each method and the average number of bills paid per month by each method. About 92 percent of households pay at least one bill by mail, and the average number paid by mail per household is 7.5 per month, down 6 percent from 2005 when the average number of bills paid per month by mail was 8.0. Other popular bill payment methods are automatic deduction from bank account (53 percent of households), in-person (31 percent) and, more recently, using the Internet (30%).
However, the number of actual bills paid by these methods is relatively small (an average of 1.4, 0.7 and 1.9 pieces per month, respectively).
Notably, households reported paying more monthly bills by electronic methods only in 2007 than in 2005. In particular, online payments increased rather quickly, growing 46 percent since 2005 and 19 percent since 2006. As a result, in 2007, almost as many payments are made using the Internet as by all other electronic methods combined (1.9 compared to 2.1).
Since 2005, the average number of bills paid by Internet increased by 46 percent.
Table 4.10: : Bill Payment by Method, FY
2005 2006 and 2007
Bill Payment Method |
2005 |
2006 |
2007 |
||
Average
Number of Bills Paid per Month |
Average
Number of Bills Paid per Month |
Average
Number of Bills Paid per Month |
Share
of Bills Paid |
Percent
of Households Using Method |
|
|
8.0 |
7.4 |
7.5 |
61.9% |
92.4% |
Automatic Deduction |
1.2 |
1.3 |
1.4 |
11.4% |
53.0% |
Internet |
1.3 |
1.6 |
1.9 |
15.5% |
30.1% |
In-person |
.8 |
.8 |
.7 |
5.8% |
31.3% |
Credit Card |
.3 |
.4 |
.4 |
3.0% |
20.7% |
Telephone |
.3 |
.3 |
.3 |
2.3% |
12.6% |
ATM |
0 |
0 |
0 |
.1% |
.7% |
Total |
11.9 |
11.8 |
12.1 |
100.0% |
— |
Source: HDS
Recruitment Sample, FY 2005 through 2007.
Note: 2006 Sent volumes were revised
due to an understated adjustment factor.
As Figure 4.1 shows, electronic methods account for a growing share of household bill payments over time. In fact, since 2005, the average number of bills paid by electronic methods increased by 23 percent, largely at the expense of the mail, which dropped a little more than 6 percent during that time period.
Figure 4.1: : Monthly Average Household Bill
Payment by Method
Postal Fiscal Year |
|
In-Person |
Internet |
Automatic Deduction |
Other Electronic |
1998 |
8.20 |
.90 |
.10 |
.40 |
.10 |
1999 |
8.10 |
.90 |
.10 |
.50 |
.10 |
2000 |
8.70 |
1.00 |
.20 |
.80 |
.20 |
2001 |
8.80 |
.80 |
.40 |
.80 |
.20 |
2002 |
8.70 |
.90 |
.50 |
1.00 |
.50 |
2003 |
8.30 |
.80 |
.70 |
1.00 |
.50 |
2004 |
8.40 |
.80 |
1.10 |
1.20 |
.60 |
2005 |
8.00 |
.80 |
1.30 |
1.20 |
.60 |
2006 |
7.40 |
.80 |
1.60 |
1.30 |
.70 |
2007 |
7.50 |
.70 |
1.90 |
1.40 |
.60 |
Source: HDS
Recruitment Sample, FY 1998-2007.
Notes: : 2006
Sent volumes were revised due to an understated adjustment factor.
Other Electronic includes telephone.
Figure 4.2 shows that automatic deductions more than tripled since 1998. Given the continuing penetration of the Internet into everyday life, and the increasing affordability and popularity of broadband connections, we expect the trend away from traditional mail to continue in the future.
Figure 4.2: : Average Monthly Automatic Deductions
per Household
Postal Fiscal Year |
|
1998 |
.44 |
1999 |
.45 |
2000 |
.79 |
2001 |
.78 |
2002 |
.95 |
2003 |
.98 |
2004 |
1.15 |
2005 |
1.24 |
2006 |
1.27 |
2007 |
1.38 |
Source: HDS Recruitment Sample, FY 1998-2007.
The types of bills paid by mail are shown in Table 4.11. There has been little change in the type of bills and the percentages paid by mail since 2005. Sixty-six percent of households pay their telephone bills by mail, equaled by electric bills (66 percent), followed by credit card bills (62 percent), insurance (60 percent), cable/satellite TV (55 percent), natural gas/propane (54 percent) and water/sewer and medical (both at 50 percent).
The Household Diary Study finds that the number of total bills paid per month varies by age and income, as does the choice of methods used for bill payment. Figure 4.3 shows the total average number of bills paid per month for each income and age group.
Table 4.11: : Types of Bills Paid by Mail
Bill Type |
Percent of Household |
||
|
2005 |
2006 |
2007 |
Telephone |
73% |
69% |
66% |
Electric |
68% |
66% |
66% |
Credit Cards |
65% |
62% |
62% |
Insurance |
61% |
60% |
60% |
Cable / Satellite TV |
55% |
53% |
55% |
Natural Gas / Propane, etc |
54% |
54% |
54% |
Water / Sewer |
49% |
50% |
50% |
Medical |
N/A |
44% |
50% |
Taxes |
N/A |
N/A |
43% |
Cell Phone |
N/A |
41% |
40% |
Rent/Mortgage |
38% |
36% |
35% |
Internet Service |
N/A |
26% |
29% |
Car Payment |
N/A |
25% |
25% |
Other Loans |
32% |
23% |
22% |
Alimony / |
N/A |
N/A |
1% |
Source: HDS
Recruitment Sample, FY 2005 through 2007.
Notes: : 2006
Sent volumes were revised due to an understated adjustment factor.
N/A: not asked in survey year.
Figure 4.3: : Average Bills Paid per Month by
Income and Age (Bills Paid per Month per Household)
Household Income |
|
Under $35 |
9.3 |
$35 to $65 |
11.8 |
$65 to $100 |
13.7 |
Over $100 |
15.8 |
Age |
|
Under 35 |
11.0 |
35 to 54 |
13.0 |
Over 55 |
11.6 |
Source: HDS Recruitment Sample, FY 2007.
Unsurprisingly, the number of bills paid per month is positively related to household income. Households with incomes over $100,000 paid an average of almost sixteen bills per month in FY 2007, compared to the nine bills paid by households with incomes under $35,000.
Age has a slightly different relationship with bill payment levels in that younger households (under age 35) and older households (age 55+) pay fewer bills than households where the head of household is between 35 and 54.
More of the bills that younger households pay are paid electronically, which for purposes of this chapter combines payments made via Internet, automatic deduction from bank and other (e.g., automatic charge to credit card and payment by ATM). Figure 4.4 shows that the younger the head of a household is, the more likely it is that that household will pay bills electronically. Younger households pay a little less than 50 percent of their bills by mail, and about 45 percent electronically. Compare that to older households who pay almost 70 percent of bills by mail, and only about 26 percent electronically. The greatest divergence is in Internet bill paying, where younger households pay 27 percent of bills using the Internet, while older households pay 10 percent using this method.
Figure 4.4: : Bill Payment Method by Age
(Percent Bills Paid per Month per Household)
Age |
|
In-Person |
Internet |
Automatic Deduction |
Other Electronic |
Under 35 |
52% |
10% |
29% |
12% |
8% |
35 to 54 |
74% |
8% |
27% |
14% |
8% |
Over 55 |
80% |
6% |
11% |
14% |
5% |
Source: HDS
Recruitment Sample, FY 2007.
Note: Other Electronic includes telephone.
Table 4.12 shows the overall volume of bills and statements received. The largest volumes of bills originate from credit card companies (3.6 billion), utility companies (2.6 billion), insurance companies (2.3 billion) and telephone companies (2.1 billion). Statements received are predominantly sent by the financial sector, including banks, insurance companies, and other financial institutions. Overall, the volume of statements received by households from the financial sector increased just over 8 percent since 2005. This year, U.S. households received 6.5 billion statements from financial institutions. In 2005, that figure was 5.9 billion.
About 44 percent of First Class Mail received by households is bills and statements. In FY 2007, households received 18.8 billion bills, up from 18.7 billion in 2005, but since the number of households increased, the average number of bills per household has remained about constant. The number of statements received through the mail in FY 2007 (7.1 billion) increased 8 percent since 2005. As shown in Figure 4.5, between 2005 and 2007, the number of statements received by mail increased in households with an income of $100,000 or more. Households with incomes between $65,000 and $100,000 received .1 less statements per week, and households in the other income levels received about the same number of statements as in 2005.
Although the number of bills households receive through the mail is about constant on a per household basis, the number of bills received over the Internet is growing rapidly, albeit from a small base. Table 4.13 shows the average volume of bills received by mail and over the Internet.
Table 4.12: Bill and Statement Volumes by Industry
Industry |
Volumes |
|
Bills (Millions) |
Statements (Millions) |
|
Financial |
|
|
Bank, S&L, Credit Union |
1,498 |
3,964 |
Credit Card |
3,601 |
— |
Insurance Company |
2,264 |
543 |
Real Estate/Mortgage |
389 |
106 |
Other Financial |
129 |
1,840 |
Total Financial |
7,880 |
6,452 |
Merchants |
|
|
Department Store |
779 |
13 |
Publisher |
481 |
8 |
Mail Order Company |
213 |
3 |
Other Merchants |
519 |
71 |
Total Merchants |
1,992 |
94 |
Service |
|
|
Telephone Company |
2,112 |
14 |
Utility Company |
2,638 |
19 |
Medical and Other Professional |
2,072 |
152 |
Cable TV |
885 |
5 |
Other Service |
445 |
34 |
Total Service |
8,152 |
223 |
Manufacturers |
137 |
19 |
Government |
532 |
312 |
Social/Nonprofit |
7 |
— |
Other/Don’t Know/Refused |
87 |
33 |
Total – All Industries |
18,788 |
7,133 |
Source: HDS Diary Sample, FY 2007.
Figure 4.5: : Statements Received by Mail by
Income (Statements per household per week)
Household Income |
2005 |
2006 |
2007 |
Under $35 |
.7 |
.7 |
.7 |
$35 to $65 |
1.2 |
1.1 |
1.1 |
$65 to $100 |
1.4 |
1.5 |
1.4 |
Over $100 |
1.6 |
1.8 |
1.8 |
Source: HDS Diary Sample, FY 2005 through 2007.
Table 4.13: : Average Monthly Bills Received by
Method
Method |
2005 |
2006 |
2007 |
|
13.76 |
13.93 |
13.50 |
Internet |
.91 |
1.18 |
1.31 |
Total |
14.67 |
15.10 |
14.81 |
Source: HDS Diary
Sample, FY 2005 through 2007.
Notes: Internet averages use HDS Recruitment Sample.
This chapter examines advertising mail, which is any advertising, promotional, or sales material sent through the Postal Service. Advertising mail can be sent as First-Class or Standard Mail.
According to McCann-Erickson, American businesses spent about $284 billion in 2007 advertising their products and services, a decrease of 0.4 percent from 2006. Of this total advertising spending, 21.5 percent was spent on direct mail.
In 2007, one fifth of total advertising dollars was spent on direct mail advertising.
Direct mail was the second leading media choice of advertisers in 2007, after television. Direct mail advertising spending increased 1.8 percent from 2006, outpacing the growth in all media categories, except for Internet and magazine spending, as shown in Table 5.1.
Table 5.1: : U.S. Advertising Spending by Medium,
2005-2007
(Billions of Dollars)
Medium |
2005 |
2006 |
2007 |
Percent Change 2006-2007 |
Direct Mail |
$56.6 |
$59.9 |
$61.0 |
1.8% |
Newspapers |
$47.9 |
$47.7 |
$42.9 |
-10.0% |
Television |
$64.1 |
$66.2 |
$66.2 |
0.0% |
Radio |
$20.0 |
$19.6 |
$18.6 |
-5.2% |
Magazines* |
$12.9 |
$13.4 |
$13.7 |
2.0% |
Internet |
$7.9 |
$9.3 |
$10.9 |
17.2% |
All Other |
$66.6 |
$68.9 |
$70.5 |
2.3% |
Total |
$276.0 |
$285.1 |
$283.9 |
-0.4% |
Source:
McCann-Erickson – estimates.
Note: Totals may not sum due to
rounding.
* Consumer magazines advertising only (business is in All Other)
Despite many changes to the U.S. economy over the past few years,
direct mail continues to be one of the most popular advertising choices. It is
a highly efficient and versatile method for communicating with consumers.
Direct mail can be targeted to the interests of individual customers. It can be
used both to locate new customers and maintain relationships with existing
customers. Direct mail allows for a variety of different types of advertising:
letters, postcards, catalogs, and free samples. It can be sent as First-Class
or Standard Mail, allowing advertisers to trade off their interest in more
timely, personalized First-Class mailings against cost savings from Standard
Mail.
Importantly, the effectiveness of direct mail is readily measurable, more so than for any other media shown in Table 5.1. Businesses can track the response rate to a mailing far more precisely than for a television commercial or magazine advertisement. This feature alone gives advertising mail a key advantage over its competitors.
Figure 5.1 shows that direct mail’s share of total advertising spending has been on a strong upward trend for most of the past 16 years. Since 1999, the direct mail share has risen steadily reaching 21.5% percent in 2007. Direct mail has maintained its large ad share even with the introduction of new, fast growing ad markets such as the Internet.
Figure 5.1: : Direct Mail as a Share of Total
Advertising, 1990-2007 (Percent of Total Ad Spending)
Calendar Year |
|
1990 |
18.0% |
1991 |
19.1% |
1992 |
19.0% |
1993 |
19.3% |
1994 |
19.4% |
1995 |
19.9% |
1996 |
19.3% |
1997 |
19.3% |
1998 |
19.1% |
1999 |
18.6% |
2000 |
19.0% |
2001 |
19.2% |
2002 |
19.4% |
2003 |
19.7% |
2004 |
19.8% |
2005 |
20.5% |
2006 |
21.0% |
2007 |
21.5% |
Source: U.S. Postal Service calculations based on McCann-Erickson WorldGroup data.
Households received 100 billion pieces of advertising mail in 2007. Tables 5.2 and 5.3 show lower levels of Standard Mail in 2007 compared to the previous two years due to overstated volumes in 2005 and 2006. Prior to 2007, detached address labels (approximately 3 billion pieces in 2006) were counted as separate pieces, resulting in double counting errors. As seen in Table 1.1, however, the trend for total Standard Mail (household and businesses) shows a continuous increase over the past few years. In 2007, advertising mail represented about 60 percent of all mail received by households.
Advertising mail represented 60 percent of all mail received by households in 2007.
Table 5.2 shows that First-Class advertising mail accounts for 16.9 billion pieces (17 percent) of all advertising mail received by households. Of this, 9.0 billion pieces are advertising only, while the other 7.9 billion pieces are secondary advertising, such as an advertisement enclosed with a bill. First-Class advertising mail volumes were adversely affected prior to 2005, primarily from diversion to Standard Mail advertising. However, in 2005 and 2006 it increased almost back to 2002 levels. In 2007 it resumed its fall, resulting in an 8 percent decrease from 2005.
On average, U.S. households each receive 16.7 pieces of advertising mail per week, 17 percent of which is First-Class advertising.
About 83 percent of all advertising mail received by households in 2007 was sent as Standard Mail, which equates to a total of 83.4 billion pieces.
As noted above, the trends in Tables 5.2 and 5.3 are distorted by errors in the volumes reported prior to 2007. However, data from RPW reports (which do not include these errors) indicate that overall advertising mail has grown steadily for the past three years. Most of the increase in Standard Mail advertising volumes is found in Regular and ECR mail. In 2007, households received an average of 11.6 Presorted Standard or Bulk Rate mail pieces per week. The strong growth in this class of Standard Mail advertising results from implementing only one postal rate increase in over five years, diversion from First Class Mail advertising, strong growth in Direct Mail advertising spending and a strong overall economy.
Standard Mail accounts for 83 percent of total advertising mail.
Table 5.2:
Advertising Mail by Mail Classification
(Volume in Billions of Pieces)
Mail Classification |
Volume (Billions of Pieces) |
Growth, |
||
2005 |
2006 |
2007 |
||
First-Class Advertising |
18.4 |
18.0 |
16.9 |
-8.2% |
Advertising Only |
10.5 |
10.3 |
9.0 |
-14.3% |
Secondary Advertising |
7.8 |
7.7 |
7.9 |
.1% |
Standard Mail |
83.5 |
86.9 |
83.4 |
-.1% |
Regular and ECR * |
70.1 |
73.1 |
69.9 |
-.3% |
Nonprofit |
13.4 |
13.8 |
13.5 |
1.0% |
Unsolicited Periodicals/Packages |
.3 |
.2 |
.2 |
-26.8% |
Total Advertising |
102.2 |
105.1 |
100.5 |
-1.6% |
Unaddressed Mail |
15.6 |
17.8 |
12.6 |
-19.2% |
Source: HDS Diary
Sample, FY 2005, 2006 and 2007.
Notes:
Totals may not sum due to rounding.
Unaddressed Mail is not included in totals.
* Prior to 2007, Detached Address Labels (approx. 3 billion in 2006) were
counted as separate pieces, resulting in double counting errors.
Table 5.3:
Advertising Mail by Mail Classification
(Pieces per Household per Week)
Mail Classification |
Pieces per HH per Week |
Share of Total |
||
2005 |
2006 |
2007 |
||
First-Class Advertising |
3.1 |
3.0 |
2.8 |
17% |
Advertising Only |
1.8 |
1.7 |
1.5 |
9% |
Secondary Advertising |
1.3 |
1.3 |
1.3 |
8% |
Standard Mail |
14.2 |
14.6 |
13.8 |
83% |
Regular
and ECR* |
11.9 |
12.3 |
11.6 |
70% |
Nonprofit |
2.3 |
2.3 |
2.2 |
13% |
Unsolicited Periodicals/Packages |
0 |
0 |
0 |
0% |
Total Advertising |
17.4 |
17.7 |
16.7 |
100% |
Unaddressed Mail |
2.6 |
3.0 |
2.1 |
N/A |
Source: HDS Diary
Sample, FY 2005, 2006 and 2007.
Notes:
Totals may not sum due to rounding.
Unaddressed Mail is not included in totals.
* Prior to 2007, Detached Address Labels (approx. 3 billion in 2006) were
counted as separate pieces, resulting in double counting errors.
Advertising Mail and Household Characteristics
Income, Education, and Age
As advertising mail is used to sell goods and services, it’s not surprising that the amount of ad mail received by a household is closely tied to income and education.
The relationship between advertising mail and household income is quite strong, as seen in Table 5.4. Households with less than $35,000 income receive less than half as much advertising mail as households with $100,000 or more income (10.9 pieces per week compared to 24.0). Table 5.4 also shows that education plays a key role in the amount of advertising mail households receive, even after accounting for the impact education has on income.
For example, among households earning under $35,000, ad mail received per week increases as the educational status of the household head increases, rising from 9.9 pieces per week for households headed by someone without a high school degree to 11.9 pieces per week for households headed by a college graduate. The pattern is repeated across all income groups, with more ad mail received as education increases.
The role that education plays in advertising mail is two-fold. First, direct mail is a written communication and education may play some role in its relative effectiveness compared to television or radio advertising. Second, education is not only tied to current household income, but also future household income. A college graduate who currently has a relatively low income may, in a few years, earn a much higher income.
Table 5.4:
Advertising
Ad Mail Received by Income and
Education
(Pieces per Household per Week)
Household Income |
Education of Head of Household |
Average |
|||
Less
than |
High
School graduate |
Some
College or Technical School |
College
graduate |
||
Under $35 |
9.9 |
11.8 |
10.5 |
11.9 |
10.9 |
$35 to $65 |
12.7 |
14.6 |
14.9 |
17.0 |
15.1 |
$65 to $100 |
18.5 |
17.8 |
18.6 |
20.0 |
18.9 |
Over $100 |
14.3 |
22.4 |
22.2 |
25.2 |
24.0 |
Average |
11.5 |
15.2 |
15.6 |
20.3 |
16.7 |
Source: HDS Diary Sample, FY 2007.
Table 5.5 shows that households headed by older people receive more advertising mail than those headed by younger people. For every income group, advertising mail received increases as the age of the head of the household increases. In part, this is because age is correlated with other characteristics like marriage, home ownership, and the presence of children in the household.
Moreover, the older a person is, the longer his or her buying history and the more businesses with which the person has a relationship that advertising mail can help maintain. Households with incomes over $100,000 and with a head of household age 55 and older received the greatest number of advertising mail pieces at 26.6 pieces per week.
The amount of advertising mail received increases as income, education and household size increases.
Table 5.5: : Advertising
Ad Mail
Received by Income and Age
(Pieces per Household per Week)
Household Income |
Age of Head of Household |
Average |
||
Under 34 |
35 to 54 |
Over 55 |
||
Under $35 |
7.9 |
9.7 |
13.1 |
10.9 |
$35 to $65 |
11.0 |
15.4 |
17.9 |
15.1 |
$65 to $100 |
15.7 |
18.6 |
21.8 |
18.9 |
Over $100 |
18.9 |
24.1 |
26.6 |
24.0 |
Average |
12.0 |
17.6 |
18.0 |
16.7 |
Source: HDS Diary Sample, FY 2007.
Household Size
Tables 5.6 and 5.7 show advertising mail received increases as the household size (Table 5.6) and number of adults in the household (Table 5.7) increase. While this is evident in looking at changes in household size, the greatest change in the number of pieces of advertising mail received is seen in the number of adults in the households.
Table 5.6: : Advertising
Ad Mail
Received by Size of Household
(Pieces per Household per Week)
Household Size |
|
One person |
12.7 |
Two |
17.4 |
Three |
17.2 |
Four |
17.3 |
Five or more |
17.8 |
Average |
16.7 |
Source: HDS Diary Sample, FY 2007.
As shown in Table 5.7, households with three or more adults receive 52 percent more advertising mail than a household with only one adult. This represents an increase from an average of 12.5 pieces per week to 19.0 pieces per week. Note, however, that most of this increase occurs when the number of adults increases from one to two, indicating a strong impact stemming from the likelihood of it being a two-income household.
Table 5.7: : Advertising
Ad Mail
Received by Number of Adults
(Pieces per Household per Week)
Number of Adults |
|
One |
12.5 |
Two |
17.3 |
Three or more |
19.0 |
Average |
16.7 |
Source: HDS Diary Sample, FY 2007.
Internet Access
Finally, Table 5.8 shows the relationship between advertising mail received and Internet access. Despite all the attention paid to online and e-mail advertising, households with Internet access receive more advertising mail than those without access.
To a large degree, this reflects other household characteristics; Internet access is closely tied to income and education. However, advertising mail is sent even when new advertising media are available. In addition, Table 5.8 may demonstrate the use of Internet information to target potential customers through direct mail advertising.
Table 5.8: : Advertising
Ad Mail
Received by Internet Access
(Pieces per Household per Week)
Type
of |
|
Broadband |
18.6 |
Dial-up |
16.5 |
None |
12.6 |
Average |
16.7 |
Source: HDS Diary Sample, FY 2007.
Figure 5.2 provides data on the senders of advertising mail to households. Merchants continue to be the largest senders; in 2007, they sent 36 percent of Standard advertising mail and 24 percent of First-Class advertising mail. Financial firms are the second largest sender of Standard Mail advertising and the largest sender of First-Class advertising (41 percent). Many bills and statements, especially for credit cards, include advertising.
With $284 billion spent in the United States on advertising, it is not surprising that few households wish they received more.
Figure 5.2: : Advertising Volumes for First-Class
and Standard Mail Advertising by Sender Type (Billions)
Sender Type |
First-Class Mail |
Standard |
Financial |
6.7 |
17.9 |
Merchants |
4.0 |
29.9 |
Services |
4.6 |
10.9 |
Manufacturers |
.5 |
1.5 |
Social |
.7 |
13.8 |
Government |
.3 |
1.4 |
Source: HDS Diary
Sample, FY 2007.
Base: First-Class and Standard
Advertising Mail Pieces excluding Unsolicited Samples, Multiple Organizations,
and
Don’t Know/No Industry given.
Whether they wish to receive more or not, most households either read or at least scan their advertising mail. Figure 5.3 shows 48 percent of households usually read their advertising mail, while an additional 33 percent scan the mail. Only 19 percent of households report they do not usually read their advertising mail. This represents an increase from the nine percent who did not usually read advertising mail in 1987, but given the large increase in advertising mail volumes since then, it is clear that U.S. households read more advertising mail now than in the past.
Eighty-one percent of households either read or scan advertising mail
sent to their household.
Figure 5.3: : Advertising
Mail Behavioral Trends — 1987, 2005, 2006 and 2007
Sender Type |
1987 |
2005 |
2006 |
2007 |
Read |
49% |
45% |
46% |
48% |
Scan |
40% |
37% |
35% |
33% |
Don’t Read |
9% |
15% |
17% |
19% |
Source: HDS
Recruitment Sample, FY 1987, 2005, 2006 and 2007.
Note: Percentages do not include those
who did not provide a response.
Interestingly, the survey shows that not all advertising is treated equally. Figure 5.4 shows that catalogs attract much more attention than credit card advertising as they are usually more interesting to read. Forty seven percent of households read catalogs and only 14 percent discard them without reading them. On the other hand, only 24 percent of households read credit card advertising and 48 percent discard them without reading them.
Figure 5.4: : Treatment
of Standard Mail by Type (Percent of U.S. Households)
Treatment of Standard Advertising Mail |
Catalogs |
Credit Cards |
All Other |
Read |
47% |
24% |
45% |
Looked at, Not Read |
14% |
21% |
18% |
Discarded |
18% |
48% |
25% |
Set Aside for Later |
14% |
2% |
5% |
Source: HDS Diary
Sample, FY 2007.
Note: Percentages do not include those
who did not provide a response.
Another interesting result is found in Figure 5.5. Household behavior toward advertising mail is largely independent of how much advertising mail the household receives. For example, among households that receive zero to seven pieces of advertising mail per week, 50 percent usually read all or some of the mail and 19 percent usually do not read any. Among households that receive eighteen or more pieces per week, 49 percent usually read all or some and 17 percent usually do not read any. Thus, households that receive a lot of advertising mail don’t appear to be particularly “turned off” by the high volume. However, Figure 5.5 also shows that, the percent of households that usually read all advertising does decrease as the number of pieces increases. When only seven or less pieces are received, 22 percent of households usually read all the advertising mail they receive. When 18 or more pieces are received, only 10 percent of households usually read all the advertising mail.
Treatment of Standard Advertising Mail |
0 to 7 |
8 to 10 |
11 to 12 |
13 to 15 |
16 to 17 |
More than 18 |
Usually Read |
22% |
14% |
12% |
14% |
12% |
10% |
Read Some |
28% |
29% |
38% |
33% |
33% |
39% |
Usually Scan |
31% |
39% |
32% |
35% |
38% |
34% |
Usually Don’t Read |
19% |
18% |
19% |
18% |
17% |
17% |
Source: HDS Diary Sample, FY 2007.
Effectiveness of Advertising Mail
Ultimately, advertisers send direct mail because it works – household members read and respond to it. Table 5.9 presents the intended response of households to advertising mail. Households report they intend to respond to about one in ten pieces of advertising mail, with the intended response to Standard mail being greater than for First-Class advertising (11 percent and 9 percent of pieces, respectively). The table also shows that households say they may respond to another 17 percent of Standard advertising and 10 percent of First-Class advertising. This is not to say that a similar mail piece would receive a higher response rate if mailed via Standard Mail; it is more likely the result of a different mix of advertising in Standard Mail. For example, catalogs are routinely mailed Standard Mail, but infrequently mailed First-Class.
Figure 5.6 presents the total number of responses to advertising mail by income. As illustrated in Tables 5.4 and 5.5, higher income households received more advertising mail. Figure 5.6 combines the data on the amount of advertising mail received by household income with the household’s intended response to the mail. The result is the average number of responses per week for each income level. For example, households with incomes above $100,000 report they intend to respond to 2.2 pieces of advertising mail per week, and they may respond to another 3.6 pieces per week. Other high-income households also indicate they will respond to more than one piece of advertising mail per week, as do the lower income households.
While intended responses do not always lead to actual responses, the data presented in Table 5.9 and Figure 5.6 help explain why direct mail is the number one choice of advertisers in America.
Table 5.9: Intended Response to Advertising
Mail by Class
((Percentage
of Pieces)
Response |
First-Class |
Standard |
Yes |
9% |
11% |
Maybe |
10% |
17% |
No |
65% |
61% |
No Answer |
17% |
12% |
Source: HDS Diary Sample, FY 2007.
Figure 5.6: : Weekly Number of Responses by Income
Household
Income |
Will Respond |
Might Respond |
Under $7 |
1.2 |
1.4 |
$7 to $9.9 |
1.1 |
1 |
$10 to $14.9 |
0.7 |
1.6 |
$15 to $19.9 |
0.9 |
1.3 |
$20 to $24.9 |
1 |
1.4 |
$25 to $34.9 |
1.1 |
1.5 |
$35 to $49.9 |
1.4 |
1.8 |
$50 to $64.9 |
1.5 |
2.1 |
$65 to $79.9 |
1.6 |
2.4 |
$80 to $99.9 |
1.7 |
3 |
$100 to $119.9 |
2 |
2.8 |
$120 to $149.9 |
2.2 |
3.2 |
Over $150 |
2.2 |
3.6 |
Source: HDS Diary Sample, FY 2007.
This chapter examines periodicals sent to households. Periodicals Mail consists of newspapers or magazines regularly sent to households, usually as part of a subscription. This chapter analyzes only periodicals delivered by the Postal Service to households. Newspapers or magazines delivered by a local carrier or purchased at a newsstand or store are not included in Household Diary data. The volumes examined here are only a portion of the total periodicals volume since more than one quarter of periodicals received by nonhouseholds go to doctors’ offices or other businesses.
Historically,
changes in total Periodicals Mail volumes have not kept
pace with population growth.
Total Periodicals Mail volumes have not kept pace with population growth over time, as seen in Figure 6.1. In general, this is the result of a demographic shift due to people reading less today than they did a few decades ago. Periodicals volumes reached a peak in 1990 at 10.7 billion pieces, but declined each year since 1997, with the exception of FY 2000. In that year, periodicals volumes were temporarily buoyed by an influx of advertising revenue during the dot.com boom. Since FY 2000, the volume dropped dramatically.
Historically, troughs in periodicals volumes have lagged economic slumps more so than with other types of mail, largely because it takes time for some subscription contracts to cycle out. After the most recent recession, periodicals volumes slipped not only because of reduced subscriptions, but also due to the number of publications that ceased operation as sources of advertising revenue dried up. Since then, in addition to the ongoing demographic shift away from reading, volumes continued to fall as the Internet became an increasingly accepted substitute for hard-copy publications.
Figure 6.1: : Periodicals Mail Volume per Person –
1971 to 2007
(Annual
Pieces per Person)
Postal Fiscal Year |
|
1971 |
48.8 |
1972 |
47.9 |
1973 |
45.4 |
1974 |
44.2 |
1975 |
45.0 |
1976 |
43.6 |
1977 |
42.5 |
1978 |
42.5 |
1979 |
41.1 |
1980 |
44.9 |
1981 |
43.3 |
1982 |
41.0 |
1983 |
39.4 |
1984 |
40.3 |
1985 |
43.5 |
1986 |
44.0 |
1987 |
42.5 |
1988 |
42.6 |
1989 |
42.5 |
1990 |
42.7 |
1991 |
41.0 |
1992 |
40.2 |
1993 |
39.6 |
1994 |
38.8 |
1995 |
38.2 |
1996 |
37.6 |
1997 |
38.1 |
1998 |
37.4 |
1999 |
36.8 |
2000 |
36.7 |
2001 |
35.3 |
2002 |
33.7 |
2003 |
32.1 |
2004 |
31.1 |
2005 |
30.6 |
2006 |
30.1 |
2007 |
29.2 |
Source: U.S. Postal Service, U.S. Census Bureau.
Advertising’s Impact on Periodicals
Advertising spending translates into advertising revenue, and the key determinant of magazine profitability is advertising revenue. The trend in advertising spending on magazines shifted to a lower level after its peak in 2000. This suggests that changes in available advertising revenues have altered the profitability of the magazine industry.
Advertising is a form of business investment. As with other investments, when the economy takes a turn for the worse, advertising tends to slow. By 2000, advertising as a percent of Gross Domestic Product (GDP) rose to a historically high level; when the high-tech bubble burst, advertising crashed. In 2001, advertising spending suffered its largest year-over-year decline in history. After six years of economic expansion, overall spending increased; magazine advertising spending also resumed its growth but at a slower pace than the years prior to 2001. On a per capita basis, 2007 spending actually experienced a slight decline.
McCann Erickson projects that advertising spending will continue to grow modestly in 2008, reflecting the widespread uncertainty in the performance of the overall economy. In prior times, advertising spending growth would bode well for new magazine launches as opportunities surface to capture new segments. More magazines in circulation generally translates into higher volume for the Postal Service, since, for most titles, the mail remains the primary distribution channel. More recently, however, the Internet has become a strong competitor of hard-copy publications. The Internet provides an alternative channel for news, information and entertainment. As a consequence, Periodicals volumes may be headed toward long-term decline.
Figure 6.2 shows the sharp decline in real per capita advertising spending for consumer magazines in 2001 and 2002 and the subsequent resumption in annual growth.
Figure 6.2: : Real Per-Capita Consumer Magazine
Advertising Spending
Calendar Year |
|
1960 |
$23.86 |
1961 |
$23.85 |
1962 |
$23.37 |
1963 |
$24.25 |
1964 |
$25.25 |
1965 |
$26.47 |
1966 |
$27.49 |
1967 |
$26.19 |
1968 |
$25.62 |
1969 |
$25.32 |
1970 |
$22.84 |
1971 |
$22.79 |
1972 |
$22.71 |
1973 |
$21.43 |
1974 |
$20.23 |
1975 |
$17.83 |
1976 |
$20.38 |
1977 |
$22.93 |
1978 |
$25.46 |
1979 |
$26.25 |
1980 |
$25.55 |
1981 |
$25.95 |
1982 |
$25.44 |
1983 |
$27.67 |
1984 |
$30.80 |
1985 |
$30.97 |
1986 |
$30.97 |
1987 |
$31.51 |
1988 |
$32.69 |
1989 |
$34.51 |
1990 |
$33.26 |
1991 |
$30.42 |
1992 |
$31.48 |
1993 |
$31.93 |
1994 |
$33.24 |
1995 |
$34.89 |
1996 |
$35.54 |
1997 |
$37.65 |
1998 |
$39.42 |
1999 |
$41.76 |
2000 |
$43.73 |
2001 |
$37.90 |
2002 |
$36.54 |
2003 |
$36.84 |
2004 |
$38.00 |
2005 |
$38.27 |
2006 |
$38.37 |
2007 |
$37.80 |
Source: McCann Erickson, U.S. Census Bureau.
Periodicals represent about 4 percent of all household mail volumes (see Table E.2). Table 6.1 shows the breakdown of periodicals received by households. In FY 2007, households received 6.6 billion periodicals, compared to 6.7 billion in FY 2005 and 2006. Seventy-three percent of all periodicals received by households were magazines, a strong increase since 1987, when the share was 59 percent.
In 2007, households received an average of 0.8 magazines per week. The most common type of magazine is monthly, accounting for two-thirds of the total magazines.
Newspapers make up 18 percent of total Periodicals volumes, down from the 35 percent share in 1987. The number of newspapers received per household each week declined from 0.6 to 0.2 during that same time period, while magazines only declined from 1.0 to 0.8 pieces per week.
The decline in newspapers captured in the Household Diary study mirrors the behavior seen in overall newspaper circulation.
As shown in Figure 6.3, newspaper circulation in general has declined since 1990. Of course, on a per capita basis, the decline is even more pronounced.
Table 6.1: : Periodical Type by Year
(Pieces per Household per Week)
Periodical Type |
1987 |
2006 |
2007 |
Newspapers |
.6 |
.2 |
.2 |
Daily |
.2 |
.1 |
.1 |
Weekly |
.3 |
.1 |
.1 |
Other |
.1 |
0 |
0 |
Magazines |
1.0 |
.8 |
.8 |
Weekly |
.3 |
.2 |
.2 |
Monthly |
.6 |
.6 |
.5 |
Other |
.1 |
.1 |
.1 |
Unclassified |
.1 |
.1 |
.1 |
Total Periodicals |
1.7 |
1.1 |
1.1 |
Source: HDS Diary Sample, FY 1987, 2006 and 2007.
Note: Totals may not sum due to
rounding.
Figure 6.3: : Newspaper Circulation
– 1970 to 2006 (Millions of Copies)
Calendar Year |
|
1970 |
62.1 |
1971 |
62.2 |
1972 |
62.5 |
1973 |
63.1 |
1974 |
61.9 |
1975 |
60.7 |
1976 |
60.9 |
1977 |
61.5 |
1978 |
62.0 |
1979 |
62.2 |
1980 |
62.2 |
1981 |
61.4 |
1982 |
62.5 |
1983 |
62.6 |
1984 |
63.1 |
1985 |
62.8 |
1986 |
62.5 |
1987 |
62.8 |
1988 |
62.7 |
1989 |
62.6 |
1990 |
62.3 |
1991 |
60.7 |
1992 |
60.1 |
1993 |
59.8 |
1994 |
59.3 |
1995 |
58.2 |
1996 |
57.0 |
1997 |
56.7 |
1998 |
56.2 |
1999 |
56.0 |
2000 |
55.8 |
2001 |
55.6 |
2002 |
55.2 |
2003 |
55.2 |
2004 |
54.6 |
2005 |
53.4 |
2006 |
52.3 |
Source: Newspaper Association of America.
Figure 6.4: : Daily Newspaper Readership – 1987 to
2007 (Percent of Population)
Calendar Year |
|
1987 |
64.8% |
1988 |
64.2% |
1989 |
63.6% |
1990 |
62.4% |
1991 |
62.1% |
1992 |
62.6% |
1993 |
61.7% |
1994 |
61.5% |
1995 |
59.4% |
1996 |
58.4% |
1997 |
58.3% |
1998 |
59.0% |
1999 |
56.9% |
2000 |
55.5% |
2001 |
54.3% |
2002 |
55.4% |
2003 |
54.1% |
2004 |
52.8% |
2005 |
51.6% |
2006 |
49.9% |
2007 |
48.4% |
Source: Newspaper Association of America.
Note: There was a change in methodology
in 1998.
Directly contributing to newspaper volume declines are changes in daily readership levels. As shown above in Figure 6.4, the percentage of the U.S. population reading newspapers on any given day decreased from 65 percent in 1987 to only 48 percent in 2007.
Daily newspaper
readership overall has declined since 1987.
Declining newspaper readership and circulation are not the only contributors to the falling volume of newspapers received by households. With current technology and alternate delivery systems, national newspapers such as the Wall Street Journal, The New York Times, and USA Today deliver their papers to prime urban and suburban household customers before breakfast. Local printing/ distribution and morning delivery mean these copies no longer move through the mail.
Periodicals Mail
and Household Characteristics
Income, Education, and Age
Table 6.2 shows that as income and education increase, periodicals volume tends to increase. Households where the head householder has a college education receive the most periodicals, averaging 1.4 per week. Similarly, households with incomes over $100,000 get an average of almost two periodicals per week, double what households earning less than $35,000 receive.
Households with incomes over $100,000 receive twice as many periodicals as households earning less than
$35,000.
Table 6.3 shows periodicals volume by age and income. The higher the income and age of the household, the higher the volume of periodicals received. For households whose heads are under 34 and with incomes less than $35,000, the average is only 0.4 pieces per week. Households with income over $100,000 and whose heads are over 55 receive the most periodicals.
Table 6.2: : Periodicals by Income and Education
(Pieces per Household per Week)
Household
Income |
Educational Attainment of Head of Household |
Average |
|||
Less than |
High School Graduate |
Some College or Technical School |
College Graduate |
||
Under $35 |
.7 |
.9 |
.8 |
.8 |
.8 |
$35 to $65 |
.7 |
1.0 |
.9 |
1.1 |
1.0 |
$65 to $100 |
.9 |
1.0 |
1.1 |
1.4 |
1.2 |
Over $100 |
1.6 |
1.0 |
1.5 |
1.8 |
1.6 |
Average |
.7 |
1.0 |
1.0 |
1.4 |
1.1 |
Source: HDS Diary Sample, FY 2007.
Table 6.3: : Periodicals by Income and Age
(Pieces per Household per Week)
Household
Income |
Age of Head of Household |
Average |
||
Under 34 |
35 to 54 |
Over 55 |
||
Under $35 |
.4 |
.5 |
1.2 |
.8 |
$35 to $65 |
.5 |
1.0 |
1.3 |
1.0 |
$65 to $100 |
.9 |
1.0 |
1.7 |
1.2 |
Over $100 |
1.0 |
1.6 |
2.0 |
1.6 |
Average |
.6 |
1.0 |
1.4 |
1.1 |
Source: HDS Diary Sample, FY 2007.
Household Size
Table 6.4 and Table 6.5 show that as households increase in size, periodicals volume increases. In households with two adults, periodicals volume is higher than in one-person households, but the presence of additional adults beyond two has no significant effect on receiving periodicals.
Table 6.4: : Periodicals
by Size of Household
(Pieces per Household per Week)
Household Size |
|
One person |
.9 |
Two |
1.2 |
Three |
1.1 |
Four |
1.0 |
Five or more |
1.0 |
Average |
1.1 |
Source: HDS Diary Sample, FY 2007.
Table 6.5: : Periodicals by Number of Adults in
Household
(Pieces per Household per Week)
Number of Adults |
|
One |
.8 |
Two |
1.2 |
Three or more |
1.1 |
Average |
1.1 |
Source: HDS Diary Sample, FY 2007.
Internet Access
As with many other types of mail, wired households receive more periodicals through the mail as shown in Table 6.6. And, as with those other types of mail, this is largely the result of the correlation between income, education, and Internet access. As household broadband access to the Internet becomes more common, it is likely that more periodical content will be delivered over the Internet, rather than by mail.
Table 6.6: : Periodicals by Type of Internet
Access
(Pieces per Household per Week)
Type
of |
|
Broadband |
1.2 |
Dial-up |
1.1 |
None |
.9 |
Average |
1.1 |
Source:
HDS Diary Sample, FY 2007.
Figure 6.5 provides an overview of subscription type for FY 1987, 2006 and 2007. As shown, the distribution of subscription type has remained relatively stable over the last two years and similar to the distribution in the 1987 period. In 2007, a household member ordered and paid for 45 percent of total periodicals sent to households. An additional 39 percent were free – either ordered by a household member or delivered to the household without a freestanding order, for example, as a prerogative of membership in a professional, fraternal, or religious organization.
Figure 6.5: : Subscription Type by Year
(Percent of Total Periodicals)
Subscription Type |
1987 |
2006 |
2007 |
Paid |
49% |
45% |
45% |
Free (ordered) |
4% |
7% |
7% |
Gift |
4% |
3% |
4% |
Free (not ordered) |
10% |
31% |
32% |
Other |
3% |
1% |
1% |
Source: HDS Diary Sample, FY 1987, 2006 and 2007.
Base: Total Periodicals Mail volume -
RPW.
Note: Percentages do not add to 100 due
to the exclusion of periodicals sent to non-households and those to
which no response was given as to subscription type.
As shown in Table 6.7, professional organizations combined account for 10 percent of total periodicals received by households. Charitable organizations account for only one percent of periodicals received by households.
Table 6.7: : Periodicals by Sender Type
Sender Type |
Pieces per
Household |
Percent of Periodicals Received by HH |
Commercial Organization |
.81 |
74% |
Professional Organization |
.12 |
10% |
Religious Organization |
.05 |
5% |
Educational Organization |
.06 |
5% |
Union |
.02 |
1% |
Charitable Organization |
.01 |
1% |
Veterans’ Organization |
.01 |
1% |
Unclassified |
.03 |
2% |
Total |
1.10 |
100% |
Source: HDS Diary Sample, FY 2007.
A number of factors influence a household’s receipt of periodicals. Several of these variables are demographic, while others are more behavioral in nature. In the past, income seemed to influence volume strongly, since periodicals are usually received through a paid subscription.
Typically, higher income households subscribe to more magazines and newspapers. The number of periodicals per household declined for all income groups, but a new trend emerged where the decline in pieces per week is more rapid for high-income households, as shown in Figure 6.6.
Figure 6.6: : Number of Periodicals Received Per
Week by Households by Income Group
Income Group |
1978 |
1987 |
1995 |
2007 |
Lower Third |
1.4 |
1.0 |
0.9 |
0.8 |
Middle Third |
2.0 |
1.6 |
1.4 |
1.0 |
Highest Third |
3.5 |
2.4 |
1.6 |
1.4 |
Source: HDS Diary Sample, FY 1978, 1987, 1995, and 2007.
Chapter 7: Packages
This chapter discusses packages sent and received by households, regardless of the carrier. Packages can be mailed via the U.S. Postal Service at a variety of rates, for example, documents are usually sent as First-Class Mail, Priority Mail, or Express Mail while product samples are generally Standard Mail. Merchandise and goods can be any of these classes, or any of the Package Services subclasses, including Parcel Post, Bound Printed Matter and Media Mail.
The package delivery market is an important and growing segment of the economy. From 1998 to 2007, package volume grew from 7.5 billion pieces to 8.5 billion pieces, averaging 1.4 percent growth per year. Package revenues increased from $43.3 billion to $62.1 billion over the same period, an average of four percent per year. Over that time, however, segments of the market performed differently.
There are three major segments of the package market:
· Overnight air,
· Two- and three-day air, and
· Ground.
The U.S. Postal Service is a major player in the two- and three-day air segment but provides services in all: Express Mail in the overnight segment, Priority and First-Class Mail in the two- and three-day segment, and Standard Mail and Package Services in the ground segment.
Table 7.1 shows the volume and growth rates of the three segments of the package delivery market. Between 1998 and 2000, the overall market grew consistently, driven by growth in the overnight and two-day and three-day air segments. This growth was largely due to expansion of the services offered by United Parcel Service (UPS) and Federal Express (FedEx). UPS began to push strongly into the overnight market, and both UPS and FedEx developed new two- and three-day offerings to compete with Priority Mail.
The 2001 recession led to declines in all segments of the package market, with the largest effect in the two-day and three-day air segment as customers shifted to time-guaranteed ground service in the face of hard economic times. The slow recovery in 2002 continued to adversely affect all segments of the package market, except for ground. Ground began to pick up in 2002 at the expense of the other segments. This pattern continued through 2004. As a result, the ground segment accounts for more of the package market by volume than it has at any point over the last ten years (see Figure 7.1). In 2005 and 2006, the recovering economy boosted all segments of the package market. In 2007, however, the instability of fuel prices contributed to decreases in both overnight and two- and three –day service volumes, while improved service resulted in continued growth for ground volumes.
From 1997 to 2007, package volume grew from 7.5 billion to 8.5 billion pieces.
While many carriers serve the package delivery market; FedEx, UPS, the United States Postal Service, and DHL are the larger players. DHL’s recent push in all market segments intensified competition in an already aggressive market. As seen in Table 7.2, the Postal Service lost market share in every segment over the last ten years. In part, this is a result of service enhancements made by competitors, such as the introduction of day-certain ground delivery. Competitors also include insurance and tracking services for all packages as part of the base shipping price, while the Postal Service charges extra fees for some of these services.
The Postal Service also serves a different niche in the package market than its competitors. Much more of the Postal Service’s volume consists of relatively lightweight, low-revenue parcels delivered to households (see Tables 7.3 through 7.5). This is true even in the two- and three-day air segment, where the Postal Service carries the lion’s share of the parcels.
Table 7.1: : Total Package Market Volume Growth
(Units in Millions)
Fiscal Year |
Overnight Air |
Two- & Three- |
Ground |
Total |
||||
Volume |
Percent
Growth |
Volume |
Percent
Growth |
Volume |
Percent
Growth |
Volume |
Percent
Growth |
|
1998 |
1,058 |
7.4% |
2,123 |
8.2% |
4,266 |
3.8% |
7,447 |
5.5% |
1999 |
1,115 |
5.4% |
2,161 |
1.8% |
4,335 |
1.6% |
7,611 |
2.2% |
2000 |
1,160 |
4.0% |
2,225 |
3.0% |
4,571 |
5.4% |
7,956 |
4.5% |
2001 |
1,126 |
-2.9% |
2,135 |
-4.1% |
4,555 |
-.4% |
7,815 |
-1.8% |
2002 |
1,063 |
-5.6% |
1,980 |
-7.3% |
4,578 |
.5% |
7,621 |
-2.5% |
2003 |
1,062 |
-.1% |
1,842 |
-7.0% |
4,737 |
3.5% |
7,642 |
.3% |
2004 |
1,044 |
-1.7% |
1,873 |
1.7% |
4,931 |
4.1% |
7,848 |
2.7% |
2005 |
1,057 |
1.2% |
1,931 |
3.1% |
5,105 |
3.5% |
8,093 |
3.1% |
2006 |
1,075 |
1.7% |
2,009 |
4.0% |
5,254 |
2.9% |
8,338 |
3.0% |
2007 |
1,051 |
-1.8% |
1,966 |
-2.2% |
5,438 |
3.5% |
8,455 |
1.5% |
Source: UPS, FedEx and U.S. Postal Service data, Colography Group.
Figure 7.1: : Package Delivery Market Segment
Share (Percent of Package Volume)
Postal Fiscal Year |
Overnight |
Two- & Three- Day Air |
Ground |
1998 |
14% |
29% |
57% |
1999 |
15% |
28% |
57% |
2000 |
15% |
28% |
58% |
2001 |
14% |
27% |
58% |
2002 |
14% |
26% |
60% |
2003 |
14% |
24% |
62% |
2004 |
13% |
24% |
63% |
2005 |
13% |
24% |
63% |
2006 |
13% |
24% |
63% |
2007 |
12% |
23% |
64% |
Source: UPS, FedEx and U.S. Postal Service data, Colography Group.
Table 7.2: : Postal Service's Volume Market Share
Fiscal Year |
Overnight |
Two- & Three- Day Air |
Ground |
1998 |
6% |
76% |
31% |
1999 |
6% |
76% |
31% |
2000 |
6% |
75% |
31% |
2001 |
6% |
75% |
31% |
2002 |
6% |
74% |
31% |
2003 |
5% |
71% |
31% |
2004 |
5% |
71% |
29% |
2005 |
5% |
72% |
29% |
2006 |
5% |
73% |
27% |
2007 |
5% |
73% |
27% |
Source: UPS, FedEx and U.S. Postal Service data, Colography Group.
Table 7.3: : FY 2007 Overnight Air Segment
Statistics
|
Market Share |
Average Revenue |
Weight |
FedEx |
45% |
$17.68 |
6.6 |
UPS |
30% |
$21.00 |
7.9 |
DHL |
18% |
$11.11 |
3.9 |
Express Mail |
5% |
$17.36 |
1.0 |
Other |
19% |
$31.55 |
10.0 |
Source: UPS, FedEx and U.S. Postal Service data, Colography Group.
Table 7.4: : FY 2007 Two- and Three-Day Air
Segment Statistics
|
Market Share |
Average Revenue |
Weight |
FedEx |
12% |
$12.59 |
9.5 |
UPS |
13% |
$13.58 |
9.9 |
DHL |
3% |
$8.60 |
5.5 |
First-Class & Priority Mail |
73% |
$4.27 |
1.4 |
Other |
0% |
$21.60 |
20.6 |
Source: UPS, FedEx and U.S. Postal Service data, Colography Group.
Table 7.5: : FY 2007 Ground Segment Statistics
|
Market Share |
Average Revenue |
Weight |
FedEx |
15% |
$7.29 |
14.8 |
UPS |
54% |
$7.08 |
11.9 |
DHL |
2% |
$5.88 |
10.6 |
Package Services & Standard Mail |
27% |
$1.69 |
2.1 |
Other |
2% |
$7.43 |
5.0 |
Source: UPS, FedEx and U.S. Postal Service data, Colography Group.
Compared to other mail, like letters and flats, the number of packages captured in the Household Diary Study is small, as most people do not receive packages on a regular basis. The interpretation of the results should be conducted with this in mind.
Postal Service package volume sent and received by households fell 2% in FY 2007 after increasing 8% in FY 2006. However, when sent volumes are isolated, households sent 10 percent more packages in 2007 than in 2006, increasing their use of both First-Class and Priority Mail Package Services.
Households received 2.5 billion packages in FY 2007 and sent 742 million, as seen in Table 7.6. When the combined volumes are compared to FY 2005, First-Class, Expedited (Priority and Express) and Package Services sent by households increased by 46 percent in FY 2007. First-Class, Expedited and Package Services received by households, when combined, were relatively flat compared to FY 2005. Expedited volume increased up through 2005 due to an improving economy, constant rates and ease of use. In FY 2007, Expedited fell mainly as a result of back-to-back rate increases in January 2006 and May 2007.
Table 7.6: : Postal Service Sent and Received
Packages, FY 2005, 2006 and FY 2007
(Units in Millions)
Mail Classification |
Volume (Millions of Pieces) |
|||||
2005 |
2006 |
2007 |
||||
Sent |
Received |
Sent |
Received |
Sent |
Received |
|
First-Class |
195 |
626 |
352 |
869 |
445 |
974 |
Expedited Mail |
172 |
477 |
183 |
489 |
150 |
302 |
Standard Mail |
— |
802 |
— |
674 |
— |
653 |
Package Services |
121 |
601 |
116 |
513 |
108 |
527 |
Unclassified |
23 |
71 |
23 |
115 |
39 |
71 |
Total Packages |
510 |
2,577 |
674 |
2,661 |
742 |
2,528 |
Mail Classification |
Percent of Pieces |
|||||
2005 |
2006 |
2007 |
||||
Sent |
Received |
Sent |
Received |
Sent |
Received |
|
First-Class |
38% |
24% |
52% |
33% |
60% |
39% |
Expedited Mail |
34% |
18% |
27% |
18% |
20% |
12% |
Standard Mail |
— |
31% |
— |
25% |
— |
26% |
Package Services |
24% |
23% |
17% |
19% |
15% |
21% |
Unclassified |
4% |
3% |
3% |
4% |
5% |
3% |
Total Packages |
100% |
100% |
100% |
100% |
100% |
100% |
Source: HDS Diary
Sample, FY 2005, 2006 and 2007.
Notes: : First-Class
Packages include 0.8 billion pieces of CD/DVD’s rentals sent to and received
from Netflix, Blockbuster, etc.,
reported in First- Class Mail letters in Tables E.1, 1.5 and 1.6.
Percentages may not sum to 100 due to rounding.
Expedited includes Priority Mail and Express Mail.
Totals include .2 billion pieces of household-to-household packages that are
counted in both sent and received.
Packages and Household Characteristics
Income, Education, and Age
According to the HDS, high-income households sent and received more packages than their less affluent counterparts in FY 2007, as shown in Figure 7.2.
In fact, households in the highest income bracket received almost double the volume of packages than households with incomes under $35,000. Households headed by younger people on average received about the same number of packages as those with older heads of household, as shown in Table 7.7. Higher income younger households, however, seemed to receive many more packages. This may be the case because young heads of households make more purchases online than older ones. When it comes to sending packages, older households sent about the same number of packages as younger households, as shown in Table 7.8.
Figure 7.2: : Postal Service Sent and Received
Packages by Household Income
(Packages per Household per Week)
Household Income |
Received |
Sent |
Under $35 |
0.30 |
0.05 |
$35 to $65 |
0.42 |
0.14 |
$65 to $100 |
0.42 |
0.14 |
Over $100 |
0.59 |
0.17 |
Source: HDS Diary
Sample, FY 2007.
Base: Packages Sent and Received by
Households and Delivered by
U.S. Postal Service.
Table 7.7: : Postal Service Received Packages by
Income and Age
(Pieces per Household per Week)
Household Income |
Age of Head of Household |
Average |
||
Under 35 |
35 to 54 |
Over 55 |
||
Under $35 |
.25 |
.25 |
.35 |
.30 |
$35 to $65 |
.42 |
.38 |
.45 |
.42 |
$65 to $100 |
.44 |
.38 |
.46 |
.42 |
Over $100 |
.65 |
.56 |
.60 |
.59 |
Average |
.40 |
.40 |
.43 |
.42 |
Source: HDS Diary Sample, FY 2007.
Table 7.8: : Postal Service Sent Packages by
Income and Age
(Pieces per Household per Week)
Household Income |
Age of head of Household |
Average |
||
Under 35 |
35 to 54 |
Over 55 |
||
Under $35 |
.02 |
.08 |
.06 |
.05 |
$35 to $65 |
.12 |
.13 |
.17 |
.14 |
$65 to $100 |
.18 |
.12 |
.14 |
.14 |
Over $100 |
.29 |
.15 |
.16 |
.17 |
Average |
.12 |
.12 |
.12 |
.12 |
Source: HDS Diary Sample, FY 2007.
The Household Diary Study indicates that households whose heads have college degrees tend to receive and send more packages on average than households with lower educational attainment. These results are shown in Tables 7.9 and 7.10.
Table 7.9: : Postal Service Received Packages by
Income and Education
(Pieces per Household per Week)
Household Income |
Education of Head of Household |
Average |
|||
Less
than |
High
School Graduate |
Some
College or Technical School |
College
Graduate |
||
Under $35 |
.27 |
.30 |
.35 |
.27 |
.30 |
$35 to $65 |
.40 |
.37 |
.39 |
.50 |
.42 |
$65 to $100 |
.29 |
.33 |
.49 |
.46 |
.42 |
Over $100 |
.09 |
.54 |
.56 |
.63 |
.59 |
Average |
.30 |
.35 |
.43 |
.51 |
.42 |
Source: HDS Diary Sample, FY 2007.
Table 7.10: : Postal Service Sent Packages by
Income and Education
(Pieces per Household per Week)
Household Income |
Education of Head of Household |
Average |
|||
Less
than |
High
School Graduate |
Some
College or Technical School |
College
Graduate |
||
Under $35 |
0 |
.04 |
.09 |
.16 |
.05 |
$35 to $65 |
.11 |
.10 |
.15 |
.20 |
.14 |
$65 to $100 |
.04 |
.09 |
.15 |
.18 |
.14 |
Over $100 |
.06 |
.12 |
.18 |
.19 |
.17 |
Average |
.04 |
.08 |
.14 |
.19 |
.12 |
Source: HDS Diary Sample, FY 2007.
Household Size
The Household Diary Study shows that larger households tend to receive and send more packages than smaller households, as shown in Table 7.11. This, however, does not hold true for households with four or more members and is probably due to the likelihood that more children are present in very large households.
Table 7.11: : Postal Service Received and Sent
Packages
by Size of Household
(Pieces per Household per Week)
Household Size |
Received |
Sent |
One person |
.32 |
.09 |
Two |
.44 |
.14 |
Three |
.50 |
.16 |
Four |
.38 |
.09 |
Five or more |
.42 |
.10 |
Average |
.42 |
.12 |
Source: HDS Diary Sample, FY 2007.
Table 7.12: : Postal
Service Received and Sent Packages
by Number of Adults in Household
(Pieces per Household per Week)
Number of Adults |
Received |
Sent |
One |
.32 |
.09 |
Two |
.44 |
.13 |
Three or more |
.47 |
.14 |
Average |
.42 |
.12 |
Source: HDS Diary Sample, FY 2007.
Internet Access
Access to the Internet seems to play an important part in determining the number of packages sent and received by households. Table 7.13 shows the packages sent and received by households with Internet access and households without. In FY 2007, households with broadband Internet access sent over five times as many and received almost double the number of packages sent by households without Internet access. These relationships probably reflect the correlation between income, education and Internet access.
In FY 2007, households with Internet access sent and received more packages than households without Internet access.
Table 7.13: : Received and Sent Packages
by Household Internet Access
(Pieces per Household per Week)
Type
of |
Received |
Sent |
Broadband |
.49 |
.16 |
Dial-up |
.41 |
.12 |
None |
.28 |
.03 |
Average |
.42 |
.12 |
Source: HDS Diary Sample, FY 2007.
As shown in Table 7.14, packages received by households most often contain music and videos, books, clothes and pharmaceuticals – a sign that online purchases and mail order retail are primary drivers of household package volume. In fact, online purchases have contributed to a significant growth in music/video contents received.
This type of content increased by more than any other
type, growing from 14 percent of all content types in 2005 to 24 percent in
2007, mostly due to volumes generated by video rental outfits like Netflix and
Blockbuster.
Households most often send music and videos, clothes, books, and toys. Primarily, this is due to the fact that so many household packages are sent in the holiday season, but it may also be evidence of the growing use of online sales and auction portals, such as eBay.
Table 7.14: : Contents of Postal Service Sent and
Received Packages
Contents |
Volume (Millions of Pieces) |
|||||
2005 |
2006 |
2007 |
||||
Sent |
Received |
Sent |
Received |
Sent |
Received |
|
Music/Video |
100 |
365 |
237 |
586 |
359 |
595 |
Clothing |
75 |
183 |
71 |
173 |
119 |
203 |
Computer Hard- and Software |
10 |
207 |
12 |
129 |
16 |
30 |
Books |
41 |
379 |
38 |
290 |
49 |
343 |
Pharmaceuticals/Contacts |
4 |
222 |
1 |
245 |
7 |
293 |
Checkbooks |
1 |
135 |
2 |
90 |
2 |
80 |
Food Products |
14 |
39 |
16 |
51 |
30 |
68 |
Toys |
23 |
59 |
28 |
53 |
62 |
57 |
Electronic Equipment |
14 |
45 |
15 |
42 |
17 |
53 |
Travel Products and Information |
8 |
29 |
8 |
42 |
12 |
50 |
Sporting Goods |
2 |
31 |
7 |
16 |
4 |
28 |
Telecommunications |
5 |
20 |
4 |
5 |
6 |
11 |
Footwear/Shoes |
3 |
21 |
4 |
21 |
6 |
21 |
Other Contents |
247 |
531 |
271 |
533 |
131 |
564 |
Total Packages |
510 |
2,577 |
674 |
2,661 |
742 |
2,528 |
Table 7.14: : Contents
of Postal Service Sent and Received Packages (cont.)
Contents |
Percent of Pieces |
|||||
2005 |
2006 |
2007 |
||||
Sent |
Received |
Sent |
Received |
Sent |
Received |
|
Music/Video |
20% |
14% |
35% |
22% |
48% |
24% |
Clothing |
15% |
7% |
11% |
6% |
16% |
8% |
Computer Hard- and Software |
2% |
8% |
2% |
5% |
2% |
1% |
Books |
8% |
15% |
6% |
11% |
7% |
14% |
Pharmaceuticals/Contacts |
1% |
9% |
0% |
9% |
1% |
12% |
Checkbooks |
0% |
5% |
0% |
3% |
0% |
3% |
Food Products |
3% |
2% |
2% |
2% |
4% |
3% |
Toys |
5% |
2% |
4% |
2% |
8% |
2% |
Electronic Equipment |
3% |
2% |
2% |
2% |
2% |
2% |
Travel Products and Information |
2% |
1% |
1% |
2% |
2% |
2% |
Sporting Goods |
0% |
1% |
1% |
1% |
1% |
1% |
Telecommunications |
1% |
1% |
1% |
0% |
1% |
0% |
Footwear/Shoes |
1% |
1% |
1% |
1% |
1% |
1% |
Other Contents |
48% |
21% |
40% |
20% |
18% |
22% |
Total Packages |
100% |
100% |
100% |
100% |
100% |
100% |
Source: HDS Diary
Sample, FY 2005, 2006 and 2007.
Notes:
FY 2005 and 2006 did not include “Contents” for Expedited Sent; Total Expedited
Sent was added to “Other Contents” in Sent totals.
Contents questions are multiple response; total packages does not include
multiple contents and, as such, does not equal the sum for each column.
Does not include contents for which no answer was given (DK/RF).
Music/Video packages include 0.8 billion pieces of CD/DVD’s rentals sent to and
received from Netflix, Blockbuster, etc., reported in
First- Class Mail letters in Tables E.1, 1.5 and 1.6.
The U.S. Postal Service Household Diary Study (HDS), conducted by NuStats on behalf of the Demand Forecasting & Economic Analysis division of the Postal Service’s Finance Department, is a continuously fielded study that measures household mail volumes, mail uses and attitudes about the mail and advertising.
The HDS uses a two-stage survey design: Stage 1 is an interviewer-mediated household recruitment interview. Stage 2 is a self-completion mail diary [Appendix C contains the survey instruments]. The HDS uses a multi-mode approach to minimize response bias, improve data accuracy through efficient data checking and householder re-contacts, and to provide immediate telephone assistance to participants during their diary week.
Household Recruitment Interview
The household recruitment interview
collects information on household and personal demographics, recall of mail
sent and received, adoption and use of communications technologies, bill
payment behavior, and attitudes towards advertising.
Mail Diary
The mail diary covers a seven-day period
(Monday to Sunday) and collects information on the number of mail pieces
received and sent, industry source, mail characteristics, and attitudes
regarding mail received.
This section describes the household selection process for participation in the HDS. A sample is the representative subset of the survey population used to gain information about the entire population. The population of inference for the HDS is all U.S. households. The probability design ensures each household has an equal chance of selection.
The sample design allows projections of results to all U.S. households. The Postal Service provided an address sample that NuStats matched for known telephone listings. Generally, the study was conducted using telephone sampling for household selection and screening, followed by diaries mailed to eligible households and completed by each household unit. Households without telephones were contacted via the U.S. Mail. The sample design involves a systematic sample stratified by strata (or urban/rural location) and Census regions, ensuring even coverage across the United States.
A master national sample was specified and drawn by in-house sampling statisticians. The Postal Service drew the household probability sample from the national address database following NuStats specifications. The master list, sorted by zip code, was used to draw a systematic stratified sample. This sample was then tagged with variables indicating each housing unit’s geographic location in terms of Census region and stratum.
Sample was drawn for each of the four quarters based on known proportions of households within a Census region and urban or rural location. Census regions are defined by state. Urban and rural location is defined by county and metropolitan status as defined by the U.S. Census Bureau. The strata are defined by county as follows:
· Stratum 1: Counties that are part of the thirty largest metropolitan areas in the United States, defined by population, according to Census 2000 100 percent counts.
· Stratum 2: Counties that are part of metropolitan areas but are not in Stratum 1.
· Stratum 3: Counties that are not part of a metropolitan area.
Quarterly sample frames were then derived based on the amount of sample needed for each quarter, and sample was allocated to region and strata cells based on known proportions as indicated by Census 2000 counts of households.
The sample was continuously “fielded” throughout all 52 weeks of the year. Sample was released in a manner designed to recruit equal sample sizes for each diary week, resulting in a sample file of at least 5,200 households. Table B.1 below shows the distribution of recruited and completed households.
Table B.1: : Sample by Postal Quarter
Quarter |
Required |
Recruited Households |
Completed |
Quarter 1 |
1,300 |
2,067 |
1,302 |
Quarter 2 |
1,300 |
2,097 |
1,383 |
Quarter 3 |
1,300 |
2,021 |
1,370 |
Quarter 4 |
1,300 |
2,028 |
1,407 |
Total |
5,200 |
8,213 |
5,462 |
The study uses a two-stage design in which households are recruited to participate in the diary study in a household interview (Stage 1) and recruited households complete a seven-day diary of mail received and sent (Stage 2).
Stage 1: Household Recruitment Interview
The main function of the household recruitment interview is to recruit households to participate in the diary study. In addition, the interview collects information on household and person demographics, recall of mail sent and received, adoption and use of communication technologies, bill payment behavior and attitudes towards advertising.
Households completed the recruitment interview via computer-assisted telephone interviewing (CATI) technology. The FY 2007 household interview consisted of 8,213 completed interviews with an adult member (age 18 or older) in the household. These respondents represented a cross-section of U.S. households by geography. The household interview contained 125 data items and took an average of 24 minutes to administer. The flow of the interview included the following elements:
· Introduction. Each interview began with an introduction and purpose of the interview. The interviewer also verified the respondent’s address.
· Technology adoption and use. Questions were asked about ownership and use of personal computers, fax machines, Internet, and other electronic communication. One battery of questions came from the Technology Augment survey, which was discontinued following the FY 2005 study.
· Mail volume recall. The respondent was asked to summarize how many personal letters, greeting cards, electronic greeting cards, and packages all members of the household have sent in a particular time period.
· Use of postal services. The use of post offices, post office boxes, and private mailing services was explored.
· Communication with non-US friends and relatives. If members of the households had any friends or relatives living overseas, they were asked about cards, letters, e-mails, telephone calls, and wire transfers sent.
· Bill payments. Bill payment volumes, methods, and timing were explored in depth.
· Periodicals. Summary volumes of magazines and newspapers received by the household were collected.
· Advertising. Descriptions of advertising received by the household as well as attitudes about the advertising, and orders placed because of it, were elicited.
· Online shopping. Respondents were asked about their online shopping habits, including questions about shipping methods.
· Financial accounts and credit cards. Respondents were asked to summarize the total accounts and credit cards held by the household.
· Household and person demographics. Demographic items included gender, age, marital status, employment status, educational attainment, race/ethnicity, household income, household wage earners, home ownership, residence tenure, and dwelling type.
The completion rate for the FY 2007 study (defined as the proportion of respondents who completed the diary portion relative to all recruited respondents) was 66.5 percent. This represents an increase from 63.2 percent in 2006. Most recruitment refusals took place prior to hearing who NuStats was and why the firm was calling. Refusal households that were later re-contacted cited time constraints and privacy concerns as reasons for not participating.
Stage 2: Mail Diary Package
Recruited households were sent mail diaries, instructions, and a toll-free “help” telephone number. The night before an assigned diary week began, NuStats made reminder calls to households to confirm receipt of the packet and answer any questions. If the packet was not received by this time, NuStats re-confirmed the address, assigned a new diary week, and re-sent the packet.
The diary package contained a Certificate of Appreciation, Instruction Booklet, and a photo-based “Quick Start” sheet. The Instruction Booklet provided information about the study, answers to frequently asked questions, instructions for filling out the diary, guidelines for sorting mail, and examples of mail markings.
The diary instrument was composed of two parts:
· The Question sheets. The Question sheets were color-coded by mail classification (e.g. First-Class Mail received, First-Class Mail sent, Standard, Bulk Rate, Nonprofit, etc.). Information collected about each mail classification included: type of mail piece (i.e. envelope, postcard, catalog), receiver zip code, sender zip code, mail classification, mail type, sender type, information about advertising enclosed and receiver reaction or responses to it, and timeliness of the mail piece arrival.
· Seven answer booklets, each specific to a day of the week. Each booklet was arranged by mail classification and color-coded to correspond to the question sheets.
Households were instructed to enclose pertinent information from each mail piece received to enable NuStats editors to verify or clarify quantity and classes of mail recorded in the diaries. NuStats uses a three-stage editing process to check the accuracy of the diary information recorded by each household. First, returned diary packets are culled for those that represented a reasonable attempt to complete the diary. Second, the diary information recorded for each day is checked to assure sufficient and logical answers as well as to verify recorded information against the mail markings returned in the package. In stage three, a second editor re-checks the diary information recorded for each day. This second edit functions as a quality control check to assure data accuracy. Completed diaries then receive a rating of 1 (little follow-up needed), 2 (follow-up call needed), or 3 (unusable).
During the editing process, correction callbacks were made to households to clarify information or to fill-in missing information. About three percent of returned diaries did not pass the edit checking process, and over half required some form of respondent re-contact to clarify or correct diary information.
Of the 8,213 households recruited to receive a diary package, 5,462 actually returned acceptable completed diaries (defined as containing data suitable for analysis) to NuStats for a completion rate of 66.5 percent.
Data Management
Data management entails processing the information resulting from the Household Interview and Mail Diaries, making it available for analysis, storing it and documenting it. Household interviews were conducted using CATI technology, where the questionnaire and relevant data checks were programmed into a master questionnaire that was used by all interviewers to administer the survey. Recorded data was extracted from the CATI software into a database management file.
Returned diary information was recorded (entered) in one of two methods, either traditional manual data entry or through optical scanning technology. A data entry program, pre-programmed with data check routines, captured approximately 50 percent of the diary data in a database management file. The remaining 50 percent were scanned using Teleform software. Once scanned, the data were translated into a database file that was easily appended to include the manually entered data.
After completion of data collection, editing and entry tasks, the survey data were contained in eleven data files. One data file contained the Household Interview data. The Mail Diary data were in ten files – one for each mail classification (First-Class Mail received, First-Class Mail sent, etc.). These files were all developed in SAS-PC.
The file variables are identified by variable name. For each file variable, the File Information contains:
· Label, which is a brief description of the variable;
· Measurement level, which specifies the level of measurement as scale (numeric data on an interval or ratio scale), ordinal, or nominal. Nominal and ordinal data can be either string (alphanumeric) or numeric;
· Value formats, which identify the response codes; and
· Column width and alignment.
Several SAS programming operations were necessary to put the Mail Diary data in the desired form for analysis. The structure for these programs was contained in a separate File Information document that accompanied the data delivery.
Various edit routines were used to check the consistency of the reported data and to identify reporting or entry errors. Routine edit checks were conducted to examine questionnaire responses for reasonableness and consistency across items. Routine checks included such items as:
· Response code range checks;
· Checks for proper data skips and patterns of answering questions consistent with prior answers;
· Checks for realistic responses (e.g., number of online purchases possible in one month); and
· Checks for high frequency of item non-response (missing data from question refusals).
When conducting these checks, data were compared against the actual survey forms or respondents were re-contacted. NuStats identified extreme values that were impossible or unlikely, and corrected inconsistent data when possible. For example, extremely high numbers of computers owned by a household were examined to determine whether they were legitimate or probable entry errors.
Some extreme/inconsistent data values unable to be corrected or verified were edited to missing values.
In addition, NuStats performed in-depth customized data checks to ensure data within each record of the Household Interview were logically consistent. For example, a respondent should report paying bills by Internet only if he/she also reports having Internet access. Customized checks were also used to ensure consistency between the Household Interview and Mail Diary data. For example, an addressee was identified as a child (under 18) in the diary only if the household also reported having a child in the Household Interview.
Raw variables, derived variables, and analytical programs were documented in a data documentation binder that accompanied the data delivery. Any information that could be directly or indirectly used to identify individual respondents, such as respondent names, addresses, or telephone numbers, were removed to protect respondent confidentiality and privacy. Such information is stored in a locked archival file.
Sample
Demographic Profile (all counts unweighted), Government Fiscal Year 2007
Table B.2: : Annual Household Income by
Recruitment / Retrieval Status
Annual
|
Recruited Households |
Total |
Sample Percent |
Population Percent |
|
Retrieved |
Not Retrieved |
||||
Under $10,000 |
114 |
136 |
250 |
2.3 |
7.5 |
$10,000 - $14,999 |
124 |
104 |
228 |
2.5 |
5.9 |
$15,000 - $19,999 |
176 |
104 |
280 |
3.6 |
5.9 |
$20,000 - $24,999 |
233 |
133 |
366 |
4.8 |
5.9 |
$25,000 - $34,999 |
436 |
201 |
637 |
8.9 |
11.5 |
$35,000 - $49,999 |
640 |
311 |
951 |
13.1 |
14.5 |
$50,000 - $64,999 |
763 |
332 |
1095 |
15.6 |
11.9 |
$65,000 - $79,999 |
713 |
278 |
991 |
14.6 |
8.9 |
$80,000 - $99,999 |
610 |
264 |
874 |
12.5 |
8.6 |
$100,000 or more |
1086 |
506 |
1592 |
22.2 |
19.2 |
Don't Know |
64 |
69 |
133 |
N/A |
N/A |
Refused |
503 |
313 |
816 |
N/A |
N/A |
Total |
5,462 |
2,751 |
8,213 |
100.0 |
100.0 |
Table B.3: : Number of Adults in Household by
Recruitment / Retrieval Status
Number
of Adults |
Recruited Households |
Total |
Sample Percent |
Population Percent |
|
Retrieved |
Not Retrieved |
||||
One |
1,130 |
685 |
1,815 |
20.7 |
32.8 |
Two |
3,520 |
1,542 |
5,062 |
64.4 |
52.7 |
Three |
609 |
376 |
985 |
11.1 |
10.4 |
Four |
164 |
106 |
270 |
3.0 |
3.2 |
Five or More |
39 |
42 |
81 |
.7 |
.9 |
Total |
5,462 |
2,751 |
8,213 |
100.0 |
100.0 |
Table B.4: : Geographic Region by Recruitment /
Retrieval Status
Geographic Region |
Recruited Households |
Total |
Sample Percent |
Population Percent |
|
Retrieved |
Not Retrieved |
||||
Northeast |
1,077 |
587 |
1,664 |
19.7 |
19.2 |
Midwest |
1,370 |
594 |
1,964 |
25.1 |
23.4 |
South |
1,820 |
1,047 |
2,867 |
33.3 |
36.0 |
West |
1,195 |
523 |
1,718 |
21.9 |
21.3 |
Total |
5,462 |
2,751 |
8,213 |
100.0 |
100.0 |
Table B.5: : Urban / Rural Location by
Recruitment / Retrieval Status
Urban / Rural Location |
Recruited Households |
Total |
Sample Percent |
Population Percent |
|
Retrieved |
Not Retrieved |
||||
30 Largest Metro Areas |
2,733 |
1,484 |
4,217 |
50.0 |
48.7 |
Other Metro Areas |
1,632 |
814 |
2,446 |
29.9 |
29.9 |
Non-Metropolitan Areas |
1,097 |
453 |
1,550 |
20.1 |
21.4 |
Total |
5,462 |
2,751 |
8,213 |
100.0 |
100.0 |
Table B.6: : Age of Head of Household by
Recruitment / Retrieval Status
Age
of |
Recruited Households |
Total |
Sample Percent |
Population Percent |
|
Retrieved |
Not Retrieved |
||||
18 - 24 |
49 |
48 |
97 |
.9 |
5.6 |
25 - 44 |
1,354 |
781 |
2,135 |
24.9 |
36.5 |
45 - 64 |
2,480 |
1,143 |
3,623 |
45.7 |
37.5 |
65+ |
1,547 |
756 |
2,303 |
28.5 |
20.5 |
Refused |
32 |
23 |
55 |
N/A |
N/A |
Total |
5,462 |
2,751 |
8,213 |
100.0 |
100.0 |
Table B.7: : Educational Attainment of Head of
Household by Recruitment / Retrieval Status
Educational
Attainment of |
Recruited Households |
Total |
Sample Percent |
Population Percent |
|
Retrieved |
Not Retrieved |
||||
8th grade or less |
75 |
88 |
163 |
1.4 |
5.1 |
Some high school |
164 |
182 |
346 |
3.0 |
8.7 |
High school graduate |
1,384 |
787 |
2,171 |
25.5 |
30.2 |
Some college |
1,006 |
504 |
1510 |
18.5 |
18.3 |
Technical school graduate |
211 |
108 |
319 |
3.9 |
4.7 |
College graduate |
1,439 |
654 |
2,093 |
26.5 |
23.0 |
Postgraduate work |
1,152 |
403 |
1,555 |
21.2 |
10.0 |
Refused |
31 |
25 |
56 |
N/A |
N/A |
Total |
5,462 |
2,751 |
8,213 |
100.0 |
100.0 |
Notes: : Sample
Percent based only on retrieved households that provided a valid response.
Population percent based on US Census Bureau, Current Population Survey Annual
Demographic File (March 2007).
This section explains the methodology used for creating sampling and expansion weights for the FY 2007 Household Diary Study.
The FY 2007 HDS uses both weighting and expansion factors to 1) adjust the sample data to match population parameters and 2) expand mail volumes exhibited in the diary sample to all U.S. households.
Weighting Procedures – FY 2007 Recruitment
Sampling weights were produced separately for the households that participated in the recruitment phase of the FY 2007 HDS, and those that completed and returned a diary. There were two main weighting variables: Geography and Education. FY 2007 recruitment geographic weights were derived from sample households’ strata and region:
Strata: As mentioned previously, there are 3 strata. A household was classified within strata as residing in the top 30 metropolitan areas nationwide, any other metropolitan area, or a non-metropolitan area[1]. Table B.8 provides unweighted sample counts from FY 2007 recruitment data for strata:
Table B.8: : HDS 2007 Recruitment Data:
Urban/Rural Location
Urban
/ |
Household |
Percent |
Cumulative Percent |
30 Largest |
4,217 |
51.3 |
51.3 |
Other Metro Areas |
2,446 |
29.8 |
81.1 |
Non-Metro Counties |
1,550 |
18.9 |
100.0 |
Total |
8,213 |
100.0 |
|
Regions: Households were classified by state. There are four mutually exclusive regions as defined by the U.S. Census Bureau (along with respective states):
Four Census
Regions:
Northeast: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New
York, Pennsylvania, Rhode Island, and Vermont.
Midwest:
Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North
Dakota, Ohio, South Dakota, and Wisconsin.
South:
Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky,
Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina,
Tennessee, Texas, Virginia, and West Virginia.
West:
Arizona, Alaska, California, Colorado, Hawaii, Idaho, Montana, Nevada, New
Mexico, Oregon, Utah, Washington, and Wyoming.
Table B.9: : HDS 2007 Recruitment Data:
Geographic Region
Geographic Region |
Households |
Percent |
Cumulative Percent |
Northeast |
1,664 |
20.3 |
20.3 |
Midwest |
1,964 |
23.9 |
44.2 |
South |
2,867 |
34.9 |
79.1 |
West |
1,718 |
20.9 |
100.0 |
Total |
8,213 |
100.0 |
|
Strata/Regions: Table B.10 indicates the distribution of households from the FY 2007 recruitment sample within strata and regions.
Population parameters for the intersection of the three strata and four regions were based on 2000 Census counts of households by county. As Table B.10 shows, each county was grouped according to its location within these 12 mutually exclusive and collectively exhaustive geographic categories.
To calculate the weight for each strata/region interval, the population percentage was divided by the sample percentage. Geography weights appear in the last column to the right in Table B.11.
Table B.10: : Distribution of Households within
Strata and Region
Geographic Region |
Stratum (Urban/Rural Location) |
Total |
||
30 Largest |
Other |
Non-Metro Areas |
||
Northeast |
1,175 |
328 |
161 |
1,664 |
Midwest |
940 |
547 |
477 |
1,964 |
South |
1,021 |
1180 |
666 |
2,867 |
West |
1,081 |
391 |
246 |
1,718 |
Total |
4,217 |
2,446 |
1,550 |
8,213 |
Table B.11: : HDS 2007 Recruitment Data:
Construction of Geographic Weight
Stratum |
Geographic Region |
Households (Population) |
Percent |
Households (Sample) |
Percent |
Weight |
30 Largest Metro Areas |
Northeast |
13,512,686 |
13 |
1,175 |
14.3 |
.90 |
Midwest |
11,317,737 |
11 |
940 |
11.4 |
.94 |
|
South |
12,488,134 |
12 |
1,021 |
12.4 |
.95 |
|
West |
14,020,576 |
13 |
1,081 |
13.2 |
1.01 |
|
Other Metro Areas |
Northeast |
4,134,396 |
4 |
328 |
4.0 |
.98 |
Midwest |
6,617,353 |
6 |
547 |
6.7 |
.94 |
|
South |
15,769,481 |
15 |
1,180 |
14.4 |
1.04 |
|
West |
5,061,183 |
5 |
391 |
4.8 |
1.01 |
|
Non-Metro Areas |
Northeast |
2,638,540 |
3 |
161 |
2.0 |
1.28 |
Midwest |
6,799,442 |
6 |
477 |
5.8 |
1.11 |
|
South |
9,757,599 |
9 |
666 |
8.1 |
1.14 |
|
West |
3,362,974 |
3 |
246 |
3.0 |
1.06 |
|
Totals |
105,480,101 |
100 |
8,213 |
100.0 |
1.00 |
Source: Household Population Estimates based on U.S. Census Bureau, 2000 Census.
Education: In addition to weighting for differences in geography between the sample and the population, an additional weight was created based on differences in the educational attainment of the head of household. For those households in which either more than one person was identified as the head of household or no individual was identified as the head of household, one was chosen based on the following sequence of criteria: 1) oldest male, 2) oldest female (if no male exists). For cases in which two candidates for the head of the household were of the same age, the respondent on the phone was chosen.
Known population parameters were based on weighted proportions derived from the U.S. Census Bureau’s Current Population Survey annual demographic file for March 2007. In cases where the head of household refused to provide his/her education level, an educational level was imputed based on the average educational level of like cases. There were 56 such cases in 2007; mean levels of educational attainment were based on geography (strata and regions), as well as age and income level, if provided.
Table B.12: : HDS 2007 Recruitment Data:
Construction of Educational Attainment Weight
Educational Attainment |
Households (Population) |
Percent |
Households (Sample) |
Percent |
Weight |
8th Grade or Less |
5,879,531 |
5 |
163 |
2.0 |
2.55 |
Some high school |
10,127,996 |
9 |
346 |
4.2 |
2.07 |
High school graduate |
35,006,983 |
30 |
2,171 |
26.4 |
1.14 |
Some college |
21,287,851 |
18 |
1,555 |
18.9 |
.97 |
Technical school graduate |
5,424,318 |
5 |
330 |
4.0 |
1.16 |
College graduate |
26,660,091 |
23 |
2,093 |
25.5 |
.90 |
Post graduate work |
11,624,665 |
10 |
1,555 |
18.9 |
.53 |
Totals |
116,011,435 |
100 |
8,213 |
100.0 |
1.00 |
Note: Education responses include imputed “Don’t Know/Refused” answers.
Weighting Procedures – FY 2007 Diary Data
As mentioned above, 8,213 households participated in the recruitment phase of the FY 2007 HDS and 5,462 households completed usable diaries. Balancing weights for the FY 2007 HDS diary data were developed in the same way as for the recruitment data. An additional age weight was derived based on the age of the head of household using the following categories: 18-21, 22-24, 25-34, 35-44, 45-54, 55-64, 65-69, 70-74 and over 75 years old.
Other adjustments to weights used in the diary data included a quarterly adjustment, which accounted for variances in sampling across postal quarters. All component weights were multiplied together and normalized to ensure that the number of weighted cases equals the number of unweighted cases.
A final adjustment in the form of expansion factors was
made to expand the sample to the level of total households in the United States
at the time of data collection, which was 116.01 million. The number of
households in the United States was divided into the number of households that
participated in the diary portion of the survey. The resultant factor was
applied to each household in the survey. The expansion factor was multiplied by
the sampling weight and then multiplied by 52 (the number of calendar weeks in
one year) to derive nationwide annual volume estimates from the sample data.
Expansion Factor
116,011,435
/ 5,462 = 21,239.7
Component Weight:
Where Ps = population count in cohort and
Pt = total population count;
Ss = sample count in cohort and
St = total sample count.
In order to account for variations in the reporting of household mail volumes, three types of adjustment factors were used:
1) Destination adjustment factors;
2) Household-to-Household adjustment factors; and
3) Household-to-Nonhousehold adjustment factors.
Destination adjustment factors were calculated from differences between weighted volumes derived from FY 2007 HDS sample data and mailing volumes calculated using the Postal Service’s City Carrier Cost System (CCCS) and Rural Carrier Cost System (RCCS). These destination adjustment factors were applied to First-Class Letters & Flats, Standard Regular and Non-Profit Letters & Flats, Postal Service Packages, and Periodicals.
Household-to-household adjustment factors were applied based on the logic that mail originating and destinating in households form a “closed loop.” In other words, mail sent by households to households should equal mail received by households from households. (This situation does not necessarily exist within the confines of a finite sample since households may receive mail from households outside the sampling frame.) Therefore, household mail sent is adjusted to equal household mail received. This factor (1.10) was applied to personal First-Class Letters & Flats.
Household-to-nonhousehold adjustment factors were applied to account for under-reporting of mail sent by households to nonhouseholds. The use of this adjustment factor is based on a comparison between the reported bills paid by households from the recruitment phase of the survey and amounts derived from actual diary data. This factor (1.24) was applied to business First-Class Mail sent by households to non-households.
The following table indicates adjustment factors applied by postal classification:
Table B.13: : HDS 2007 Adjustment Factors Utilized
by Postal Classification
Postal Classification |
Destination Adjustment Factor |
Household-to-Household |
Household-to-Nonhousehold |
First-Class Letters & Flats |
.93 |
1.10 |
1.24 |
Standard Regular Letters & Flats |
.91 |
N/A |
N/A |
Standard Non-Profit Letters & Flats |
.91 |
N/A |
N/A |
Package Services |
.83 |
N/A |
N/A |
Expedited |
.71 |
N/A |
N/A |
Periodicals |
.83 |
N/A |
N/A |
[1] Metropolitan area is defined within the sample according to the official definition used by the U.S. Census Bureau, commonly referred to as Metropolitan Statistical Areas (MSAs). Metropolitan areas are defined as single- or multi-county areas. Non-metropolitan areas are counties that do not belong to a metropolitan area. Each sample county was assigned to a stratum according to its metropolitan status.