Despite the growing use of electronic mail and electronic business systems, the market for physical mail systems will continue to grow as new technologies generate new business opportunities, according to the chairman and chief executive officer of a leading mailing system company.
The packaging and shipping solution business in North America has grown by more than 15 percent in each of the last three years, said Michael Critelli, CEO of Pitney Bowes Inc., during an interview Monday in Tokyo. “We attribute that to the stimulus from the Internet,” Critelli said, arguing that many face-to-face retailing activities are now being replaced by e-commerce to create new demands for mail packaging.
Pitney Bowes, a leading manufacturer of mailing systems, claims more than 2 million customers and 90 percent of the market for all paper-based mailing machines in the U.S. Paper-based mailing systems, which are often used for direct advertisement through the mail, compose the firm’s largest business unit. But Critelli does not appear to be worried about new technologies emerging in the move toward e-commerce.
Physical mail may be slower and more expensive than e-mail, but its response rate — the factor he says is the most important for considering the costs of sending mail direct — is much higher than that for e-mail, Critelli said. “With some of our personalized target mails, we are able to get response rates that are many, many times higher than the response rate that people get by putting a banner on a Web page,” he said.
Stock market players appear to agree with Critelli’s views on the future, pushing Pitney stock prices higher in recent years. “Our share price as of last Friday was up by almost 4 1/2 times (compared to) what it was four years ago,” Critelli said.
Critelli called Japan “underdeveloped” in terms of its use of mailing systems given the scale of its economy and advanced technologies. One of the reasons for this, he said, is postal regulations.