Mailed Samples Market
Background
Product samples are trial-size products that companies give to consumers with the hope of securing a later sale. Common types of mailed product samples include health, beauty, cleaning, and other household goods.
Historically, the U.S. Postal Service had a greater position in the samples market than it does now, as companies generally had a positive view of the value of mailed samples compared to other marketing opportunities—the potential revenue from attracting and retaining customers by putting a tangible sample in their hands outweighed the related postage and product costs. However, rising postage costs and new marketing alternatives, such as distributing samples in stores or at other venues like conferences or trade shows, drove declines in mailed samples.
To reinvigorate this source of revenue, the Postal Service introduced new sample programs including Sample Showcase® in 2011 and Simple Samples® in 2013. However, these attempts to regain a foothold did not succeed. The Postal Service discontinued the Sample Showcase program in 2014, and is evaluating whether to continue the Simple Samples program.
As samples can be mailed across various mail categories, tracking information on related volumes and revenues is difficult for the Postal Service to collect—Postal Service systems only identified 444,938 mailed samples generating $188,070 in revenue in fiscal year 2015.
Our objective was to evaluate the effectiveness of Postal Service attempts to grow product sample mailings and identify opportunities for improvement.
What The OIG Found
The Postal Service’s efforts to increase sample mailings were not effectively aligned with the needs of sample mailers. Sample mailers explained they need more cost-effective ways to reach targeted customer segments than the Postal Service offers.
The marketplace has changed since the Postal Service implemented its sample programs. Market conditions now favor using targeted customer segments, social networks, and mobile devices; promoting collaboration; and creating more innovative designs.
The Postal Service may have opportunities to offer products and services that allow marketers to cost-effectively promote products through mailed samples. For example, the Postal Service could develop an online platform to connect sample product manufacturers and consumers. It could also collaborate with industry officials to develop innovative and cost-effective mailing sample solutions.
What The OIG Recommended
We recommended the Postal Service evaluate the feasibility of developing new products and services, such as an online samples platform, that would allow it to tap into the current samples market.