The Great Envelope Debate

By | July 27, 2010

The best marketing ideas today are operationally justified. Envelope marketing is no exception. A variety of solutions for printing messages on envelopes have been touted to marketing departments for a long time. Some companies pre-print messages on the outside of envelopes such as corporate taglines, incentives to go paperless or eye catching graphics to entice the recipient to open their mail.

Megaspirea, a French firm, introduced what they called “Dynamic Envelope Creation” via the Mailliner 100 at IPEX way back in 2006. Dynamic Envelope Creation was hailed as a holistic process for making a complete mail piece (envelope plus content) out of a single print stream. Variable images and messages could be printed directly on the envelope itself. Despite a strategic relationship with Pitney Bowes and Emtex that should have given the company a lot of reach in the US market – the technology never really took off.

You would think that the ability to dynamically market on the outside of the envelope would be marketing catnip – but in fact, many direct mail marketers feel that the white envelope approach is more effective than jazzy graphics on the outside of the envelope. Transaction mailers today, are still not well integrated with marketing departments (whether in plant or service providers) and therefore envelope marketing is a tough sell to this group.

DST Output (www.dstoutput.com) recently announced an envelope marketing solution that, despite the demise of past market entrants, I believe has a real chance of success. Why? Because the solution is as appealing – or potentially even more appealing- from an operations and efficiency standpoint as it is from a marketing standpoint. Like white paper, full color printing in general – operational efficiencies from wrap envelopes are creating the business case for more effective marketing. First let me explain the solution.

DST’s Wrap Envelope technology is a no-touch process for printing, wrapping and finishing high-volume, First-Class Mail packages in a high-speed production environment. Wrap extends major mailers’ customer marketing efforts with dynamic messaging that can be applied to the front, back and inside of the envelope. This means that the solution provides an envelope marketing opportunity for transaction mail like statements and bills, but also can double as a stand-alone self-mailer.

DST Output’s Wrap Envelopes are printed duplex on continuous plain roll-stock paper, and then literally wrap around multiple pages of statements, bills, inserts and reply/remit envelopes. The process enables mailers to embellish the interior as well as the exterior of the envelope with marketing messaging and promotional content, such as coupons, event information or other customer marketing materials – and can include customer data on the interior to create the self mailer – or additional personalized offer.

There are other operational benefits as well:

  1. Placing messaging on the envelope can minimize postal weight by reducing the insert count and replace separate mailings and direct mail.
  2. Wrap Envelopes can serve as a self-mailer for privacy statements, regulatory notices or e-statement bounce notifications minimizing the cost of these mailings.
  3. The windowless Wrap enhances security and privacy with no see-through areas.
  4. No window also makes it fully recyclable (no cellophane) and therefore more sustainable.
  5. There is no need to pre-order and warehouse envelopes reducing storage, commercial print and procurement costs as well as improving cash flow.

The Wrap Envelope is a compelling solution for one-page statements or bills – with or without a remit envelope. From a quality perspective, Wrap utilizes an integrated no-touch manufacturing process that tracks each and every mail piece during production to verify that the total package is complete and accurate. If an error is detected, the process automatically remakes the entire mail package.

So, no-touch quality control, cost savings, improved privacy and sustainability and – oh, by the way – completely dynamic messaging inside and out. I think that’s pretty innovative. (Take a look at the examples below.) If DST was selling this as a hardware solution, I think it would be a big success. For now, only DST outsourcing customers can take advantage of the technology and it will be interesting to see whether it is adopted for the marketing features, the operational features or both. How would you use it if you could?

(Click on pictures to see larger view)

Wrap Envelope (front) with logo and text message

Example of Wrap Envelope (front) with Dynamic Graphic

Wrap example with Dynamic Messaging on Back of Envelope

Wrap envelope with Dynamic Graphics and Messages Inside

"Outside In" Wrap Campaign

 

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15 thoughts on “The Great Envelope Debate

  1. HalJ

    As a part of a printing operation that is primarily a direct mailer, I’d like to point one overlooked flaw—you don’t mention speed and price.

    Regardless of what a marketing department wants, they are going to have to pay for it. While these products reduce the need for envelopes as we know them, you are still paying for paper and a variable click charge. But almost more importantly, you’re going to be paying for the amount of time the product is on machines.

    Given how painfully slow even the top of the line inserting lines are compared to how a direct mailer is created, and how insanely expensive it is to acquire those inserters, it wouldn’t surprise me if most marketing types, as well as operational folk try to steer away from envelope usage.

  2. Wayne Shipman

    Elizabeth: Judging from my direct mail stream, the majority of mailings use ‘white’ envelopes to hide their identity! They want to pique my curiosity and make me open the damn thing! This seems to be the most common; not sure that marketers would break their own paradigm.

    Also: privacy concerns about what personalization would occur on the outside of an envelope should be addressed. Even the inside of an envelope – what could people learn about me if they went through my recycling bin?

    Of course, if there was exceptional value in the wrapped content, we would take more care in opening our transactional or solicitation mail. I just don’t see that happening. It means re-training a lot of consumers and chnage the mindset of a few marketing folks.

    Has any independent school or university ever studied how people receive direct mail, etc? Not industry groups that promote their own goods, but a true behavorial study, with focus groups? That might be very interesting!

  3. Don Piontek

    I have the “claim to fame” to be the first party to promote this technology in the U.S. While running the U.S. operations of SITMA, we developed the first commercial paper “wrapping” system in the early 90’s. The system uses a web, which is folded over the inserts, and then cut and glued at both ends. The “flap” of the web is folded over and glued to create the “envelope”. The technology was later promoted by Buhrs-Zaandam of the Netherlands, and CMC of Citta di Castello, Italy. CMC supplied the systems to DST. This technology is also used by Valpak for their advertising coupon mailings. Potential users rejected this technology at first, because the wrap simply didn’t look very much like envelopes everyone was using. It was too similar to a “snap-pak” forms envelope that was usually associated (in the consumers mind), with a bill. But with the advent of wider web continuous ink-jet printers, VDP info can be printed on both the inserts AND the wrap exterior. So it seems the time has come for this technology.

  4. Elizabeth Gooding Post author

    Hal – if I understand your comment – you are saying that the wrap envelope has an additional operational benefit in that it avoids the use of expensive (and slow) intelligent inserting equipment. You are correct that the inserter is the slowest link in the chain and that this could improve throughput. I will try to get some operational benchmarks on that – thanks.

    Wayne – the marketing debate of white envelope versus “messaged” is exactly the reason that I titled this post “The Great Envelope Debate.” There are marketers who swear by the plain envelope and others who believe that the message on the outside increases readership and I have seen positive statistics on both. Generally not mentioned is that envelopes are rarely, truly blank. Many companies warehouse multiple versions of envelopes with a different business unit logo or return address or preprinted indicia. All of this could be printed “one demand” with a “plain” envelope wrap reducing commercial print and warehousing fees along with potentially improving postal density and thereby reducing postal expense. And if you want to put a “go paperless” message on the outside of the envelope – that probably wouldn’t hurt either.

  5. Skip Blumenthal

    I am a bit confused by the images. Are you printing the address on the outside of the envelope to make it look like a window? (Drop shadow printed)

  6. Elizabeth Gooding Post author

    Skip – great question. I don’t work for DST and pulled the images from their product announcements. There have been some other great questions posted on the effectiveness of wrap envelopes versus traditional inserting equipment – so I’m hoping that someone from DST will jump in on the conversation. Meanwhile – I’m also interested in more perspectives on the value of putting marketing messages on the outside of the envelope (versus plain white.)

  7. Don Piontek

    Regarding Hal and Elizabeth’s comments on envelope inserters, who said they were slow? The latest generation of these machines can pump out close to 20,000 envelopes per hour. Far faster than even the fastest continuous printer can print the material. The “paper-wrapping” systems process wrapped pieces at about the same speed as these inserters, with one caveat. They are even MORE expensive than the inserters. A multi-feeder paper wrapping system with the required intelligence to match inserts to the web will cost in excess of a half million dollars.

  8. Andrew Bruce, Pitney Bowes

    Thanks Don I am glad someone knows something about inserting equipment and by the way that would be 26,000. I believe that most of these wrapping solutions have been developed for direct mail applications and NOT transactional mail. They are really good at one page into a wrap. It is no secret that Pitney Bowes showed a 20k CMYK envelope printing solution at IPEX in May that is design for both Direct mail and variable page count Transactional mail.

    Meanwhile – I’m also interested in more perspectives on the value of putting marketing messages on the outside of the envelope (versus plain white.)

  9. Rich Langan

    From DST Output. Thanks for all the great comments and feedback. Don’s right. The latest wrap inserter equipment is significantly faster than traditional inserters. We spent the last year making engineering and software changes to dramatically improve the efficiency and reliability of the platform – up to 8 times the throughput. With more than a million pieces produced to date, we’re just starting to appreciate the potential.

    With regards to HalJ’s comments about paper cost and click charges, I think we may see this a little differently. Though custom envelopes have been in use for a long time, they’ve never really fully exploited the value of the real estate. With the wrap envelope, you gain the front of the envelope, a full seamless back and the inside, too. For a 4.75 x 9.75 tri-fold envelope, that’s over 100 square inches. Space that can be used to replace inserts or a second page saving the extra paper, production and postage costs. I would think both Marketing and Operations would see the value there.

    And though privacy is always a concern in this day, there are plenty of opportunities to target without exposing personal information. And to Skip’s question, the address is printed on the outside of the envelope. The outline around the address is purely cosmetic. Thanks for your posts. We’re expecting to see some very innovative uses.

  10. Mark Van Gorp

    Great discussion, and it seems like a lot of folks are very excited with the benefits this technology brings. Tom C is correct, BOWE Bell & Howell does market this solution, and we have found it to be a great fit for both direct mail AND transactional mail applications. The cost-per-piece benefits are impressive – typically resulting in a payback of less than 2 years for the equipment. The system provides even more wonderful marketing opportunities as Elizabeth notes. We applaud DST for its leadership. The system is extremely efficient and productive, and the wrapping options are very broad. We created a nice animation to help people understand how it works, and the many environmental benefits that can be achieved. The animation is located here

    http://www.youtube.com/watch?v=PanB1qYRc1E .

    And if anyone would like to see it running live, you can either visit us at Graph Expo in October or come visit our office in Durham, NC.

  11. Rich Langan

    From DST Output. All good points to consider when looking for the ways to incorporate wrap technology into today’s production environment. While most of the activity for wrap inserters to date has been for direct mail applications, we saw a real opportunity to look at how to best leverage the technology with envelope messaging in the transactional market.

    It’s taken a lot of engineering and creative thinking by some very dedicated people to integrate wrap technology into a high-volume transactional production environment. Combined with the fact that the senders of transactional communications are known for their high expectations for speed, cost, and quality, any new application in the transactional market must successfully address these performance expectations. Our objective is to bring new messaging and communications forward to our transactional clients while addressing their performance expectations.

    With the new envelope messaging options, clients have more ways to help drive revenue growth and retention. The messaging doesn’t have to be promotional or limited to the outside of the envelope. It can be educational, newsletter content, policy disclaimers, charitable activities, etc. Our clients also like the added privacy of a fully enclosed envelope and the “green” statement behind the elimination of the plastic window.

    The more we talk to clients about envelope messaging, the more innovative applications we discover. If you’d like to learn more, visit us at http://www.dstoutput or give us a call.

  12. Nimrah Baram

    As a company that is past this disscussion and has assimilated this technology in the core of it’s envelope wrapping buisness, cooperating with CMC Italy, I can say that this product is the most wanted since we started with it a few years ago. The price of the product is much lower and the options are multiple. CMC adjusts the machines for the exact needs of the company’s customers what makes the transfer to working with this technology much easier.

  13. James Calhoun

    “Scitex Digital Printing developed high-speed, variable-data, inkjet printers for production printing, but sold its profitable assets associated with the technology to Kodak in 2005 who now market the printers as Kodak Versamark(tm) VJ1000, VT3000, and VX5000 printing systems. These roll-fed printers can print at up to 1000 feet per minute.” -Wikipedia

    By may calculation that’s more than 120K pages per hour (8.5 x 11; 2-up). Most statements being 1 to 2 pages. It would seem to me that the bottle neck is the inserter. The faster the inserter, the more pieces per labor hour, the more profit.

    However, as Don pointed out, this equipment is quite expensive; both inserting and printing. It would seem that only those companies as large as DST could really profit from this technology.

  14. Kathy Tobin

    From my perspective, as part of the HP business that develops inkjet imagers used in mail addressing and imprinting, I see the potential for mailers to move response rates higher with impactful, relevant and personalized full-color envelopes. The CMC system in use at DST Output was on display at Ipex, and is the result of HP and CMC collaborating to create a solution that helps mail houses bring digital color printing’s tangible benefits to the outside of the envelope.

    As Don stated in his second post, this technology can also migrate to the wider high-speed inkjet web press platforms. HP also showed this solution at Ipex, with a letter printed on an HP T200 Color Inkjet Web Press inserted into the wrapper using CMC equipment. In the demo, the outside of the wrapper was subsequently imaged using HP inkjet technology.

    As for high-speed production, wrapping is not the only option. As mentioned by Andrew above, there are also high-speed, variable page count inserter technologies that offer full-color variable imaging for envelopes. For anyone who is in favor of color and personalization instead of plain white envelopes, inkjet and the latest mailroom finishing technology are creating new avenues for growth.

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