online competition and weak spending eroded demand for mail order
Los Angeles, CA (PRWEB) March 03, 2013
The Mail Order industry has struggled through tough conditions during the five years to 2013, with revenue declining at an estimated average annual rate of 0.1% to $95.8 billion. According to IBISWorld industry Analyst Natalie Everett, “The encroaching internet presence in the retail market has slowed industry growth as e-commerce websites increasingly poach customers by offering greater convenience and quicker transactions.” Furthermore, weak consumer confidence and low disposable income deterred households from making discretionary purchases during the recession, causing demand and sales to fall substantially over the period. Nevertheless, anticipated improvements in economic conditions are expected to relieve some of the industry's struggles; in 2013, IBISWorld estimates industry revenue will rise 0.4%.
The Mail Order industry is primarily made up of small-scale companies operating in localized region. Over the past five years, rising production and delivery expenses have adversely affected industry operators. The increasing expenses have occurred mainly because of price hikes for coated paper and postage. The price of coated paper has increased at an annualized rate of about 1.9% since 2008. Combined with falling industry revenue, these added costs have caused profit margins to fall. “With such faltering profitability, many underperforming operators have been forced to exit the industry or merge with other players,” says Everett.
External competition from brick-and-mortar establishments and e-tailers will prevent the industry from growing in the five years to 2018. Still cautious from the recession and looking for a quick and convenient shopping experience, consumers will opt to spend their money with online retailers and, to a lesser extent, brick-and-mortar establishments. As such, IBISWorld forecasts that revenue will decline steadily over the five years to 2018. For more information, visit IBISWorld’s Mail Order in the US industry report page.
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IBISWorld industry Report Key Topics
The Mail Order industry includes companies that use mail catalogs or TV programs to attract clients and display merchandise. The industry does not include companies that generate sales through door-to-door marketing, brick-and-mortar retail or e-commerce.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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