A A P S C o n f e r e n c e CANADIAN HOUSEHOLD DISTRIBUTION
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1 A A P S C o n f e r e n c e CANADIAN HOUSEHOLD DISTRIBUTION
2 AGENDA Canadian Market Overview Size and Scope of Canada Distribution Channels Distribution Geography Canada Post Recent changes case study data Predictions of the future
3 SIZE AND SCOPE - CANADA Population HHLD Counts Canada 33,476,688 13,320,615 Ontario 12,851,821 4,887,505 Quebec 7,903,001 3,395,345 British Columbia 4,400,057 1,764,635 Alberta 3,645,257 1,390,275 Manitoba 1,208, ,140 Saskatchewan 1,033, ,645 Nova Scotia 921, ,280 New Brunswick 751, ,010 Newfoundland and Labrador Prince Edward Island Northwest Territories 514, , ,204 56,460 41,462 14,700 Yukon 33,897 14,120 Nunavut 31,906 3,470
4 DISTRIBUTION CHANNELS B.C. Vancouver Sun/Province Black Press Glacier Media Postmedia Dailies Quebec Publisac Transcontinental Polybag Distribution Ontario Montreal Gazette Postmedia Daily Toronto Star Journal De Montreal Quebecor Media Daily Toronto Sun Journal De Quebec Quebecor Media Daily Globe and Mail National Post Metroland Media Community Weeklies and Dailies Quebecor Media Community Weeklies and Dailies The AdMill Group Polybag Distribution Independent Truck and Crew Operations Nova Scotia Halifax Herald St John s Telegram Transcontinental Dailies and Weeklies New Brunswick Moncton Times & Transcript Irving St John Telegraph - Irving Transcontinental Dailies and Weeklies Alberta Calgary Herald Edmonton Journal Postmedia QMI dailies and weeklies Saskatchewan Regina Leader Post Saskatoon Star Phoenix Postmedia Dailies Manitoba Winnipeg Free Press Brandon Sun P.E.I. Charlottetown Guardian Transcontinental Dailies and Weeklies
5 DISTRIBUTION GEOGRAPHY Forward Sortation Area (FSA) 4445 Houses 2955 Apartments 7,400 Total Census Tract (CT) 620 Houses 290 Apartments 910 Total Dissemination Area (DA) 165 Houses 45 Apartments 210 Total Postal Walks 600 Average Total
6 DISTRIBUTION GEOGRAPHY Dissemination Area Map Retail Location 48,000 Houses selected 21,000 Apartments
7 DISTRIBUTION GEOGRAPHY Point Map of Sales Transactions
8 DISTRIBUTION GEOGRAPHY Sales used to select Dissemination areas Market: Whitby Target: 20,000 houses Distribution: $118K Avg HHLD Income 20,180 houses
9 CANADA POST CORPORATION (CPC) Who has access to the mailbox The homeowner owns the mailbox, not the Postal system. Anyone is allowed to place permitted materials inside a homeowners mailbox. Unaddressed advertising materials are permitted Example: flyers, product samples, door hang cards, coupons, etc Addressed materials are restricted
10 EXCLUSIVE PRIVILEGE Canada Post Corporation Act Canada Post Corporation has the sole and exclusive privilege in Canada of collection, transmitting and delivering letters. CPC Lettermail Personal Letters Postcard Greeting card Invoices Reports Etc
11 EXCLUSIVE PRIVILEGE Exceptions: Subscription and other items Newspaper Magazines Books Catalogues Parcels
12 CANADA POST HOME DELIVERY Home Delivery Phase Out Canada Post will phase out home delivery to the remaining 5,000,000 urban homes over the next 5 years. Door to door delivery will be replaced with community mailboxes announced December 11, 2013
13 WHY THEY MUST CHANGE? Mail Volumes and Financials 14 Mail Volumes (in billions of pieces) * * Driving to a $1 Billion deficit By 2020 * Projected 25% decrease
14 CONSOLIDATED REVENUE Canada Post Corporation Consolidated Revenue from Operations 2050 Operational Revenue (in millions of dollars) Q Q Q Q Operational Revenue (in millions of dollars)
15 CONSOLIDATED PROFIT (LOSS) Canada Post Corporation Consolidated Profit (Loss) from Operations 250 Operational Profit (in millions of dollars) Q Q Q Q Operational Profit (in millions of dollars)
16 IMPLICATIONS OF PHASE OUT To Canadian Citizens Job cuts $0.63 to $1.00 Home owner MINIMAL impact
17 IMPLICATIONS OF PHASE OUT To Advertisers and Direct Marketers Expected Longer Pickup times Expected Pre-sorting before home Time Sensitive Advertising IMPACTED In-home consumption IMPACTED
18 COST COMPARISON Unaddressed Flyer Distribution Cost Comparison Rates Canada Post Unaddressed Advertising Rates Daily Newspaper Rates Weekly Newspaper Rates Polybag Delivery Systems $100/M - $140/M* $50/M-$70/M $35/M-$45/M $60/M-$80/M * Canada Post advertising mail needs to be 3-4x more effective based on cost alone.
19 CASE STUDY Lawrence Media - National fast food chain customer 330 Stores Nationally 2.6MM coupons cards 20.8MM coupons Printing: Glossy perforated card stock Distribution: Daily Newspapers Weekly Newspapers Canada Post Polybag * Perforated coupon reverse side
20 CASE STUDY 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Canada Post Rural Preliminary Redemption % by Vehicle Canada Post Urban Dailies Weeklies Polybag Redemption
21 CPC FLYER EFFECTIVENESS Predictions of Canada Post Corporation (CPC) flyer effectiveness 1. Fewer CPC flyers will make it into the home as more super mail boxes are installed. 2. CPC flyers will become less and less effective to time sensitive advertising. 3. Reduced CPC flyer quantities as advertisers move to other distribution channels. 4. Daily Newspapers, community newspapers and private carriers will continue to deliver directly to the home. 5. Increased quantities for alternative distribution channels TROUBLE
22 SUMMARY Presentation Highlights Canada Post volumes will continue to decline as consumers and advertise gravitate to on-line solutions. More Canada Post cost cutting, service reductions and rate increases are expected to continue. Elimination of home delivery in Canada opens opportunities for newspapers and private carriers. Remember we all have access to the mailbox. Carriers that continue to deliver directly to the door have opportunities for increased volumes.
23 CONTACT Scott Lawrence President P (416) M (416) scott@lawrencemediasales.ca Jason Nagy Chief Information Officer (CIO) M (905) JNagy@lawrencemediasales.com
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