Digital integration “fundamental” to future of mail, says USPS chief

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via Post & Parcel

US Postmaster General Patrick Donahoe called on US mailers yesterday to embrace technology and creative ways to integrate physical mail with the digital world, as he opened the annual National Postal Forum in San Francisco.

With the US Postal Service continuing to struggle financially, in no large part because US lawmakers continue to fiddle while Rome burns, Donahoe used his keynote address at the annual gathering of postal officials and customers to look at ways to boost revenues by building on the strengths of the mail medium.

In particular, he said the mail industry needed to make the most of digital technology to engage with Smartphone users and make mail more personalized and meaningful for consumers, offering them clever ways to interact with the mail they receive.

Donahoe said: “Our challenge as an industry is to shape those moments when people are experiencing mail, and make them more powerful in the future. That’s part of getting our game on — shaping our future and building excitement about the power of mail and the future of mail.”

The National Postal Forum saw USPS unveiling some of its own new technology to help engage with the Internet generation, such as its MyPost application for Smartphones.

The new app will make use of the Postal Service’s increasingly sophisticated nationwide tracking system, based on the Intelligent Mail barcode, to allow consumers to check which mail is coming to them through their mobile phones.

USPS is also encouraging mailers to take up ways to integrate their physical mail pieces with Internet platforms, and this month is running a promotional campaign offering postage discounts for mailers using technology like QR codes to bridge the physical-digital divide.

“Through the convergence of data and technology, mailers can use the insights about individual interests to make mail more personal. With imbedded QR codes and augmented reality, mail becomes much more functional and creative, creating an even more influential experience,” Donahoe said yesterday.

“Innovating digital integration is fundamental to improving the consumer experience — and combining the targeting power of online advertising with that mail experience will make mail far more valuable to the receiver and the sender.”

Value of mail
US Postmaster General Patrick Donahoe sees digital technologies as making mail a “more powerful” communications channel

Mail volumes have dropped by more than 25% since 2006, and although package volumes are growing strongly thanks to e-commerce, USPS package services are not as profitable as its declining First Class Mail business. For every $1 of First Class Mail revenue lost, it takes $3 of package service revenue to maintain profitability levels according to Postal Service executives.

Donahoe highlighted the continuing importance of the mail in the marketing world, claiming that American businesses were still spending the same percentage of their marketing dollars on mail today as they were three decades ago, thanks to the “tremendous value” for consumers and “exceptional return on investment” for businesses.

But he said the growth of the mail industry would be driven by changing consumer demand.

“The growth of our industry is going to be driven by changing technologies and customer expectations. We have to work together as an industry to anticipate these changes by leveraging the value of mail to shape new opportunities,” he said.

As he pinpointed ways to grow the mail business, Donahoe also noted the importance of continuing efforts to quickly downsize the USPS network in light of mail volume declines.

USPS has cut its workforce by 193,000 and its delivery routes by 21,000 since 2006, cutting its operating costs by $15 billion a year.

But more is to come as the Postal Service looks to avoid price increases, and in the mean time USPS continues to need action from Congress to address its crippling pension and healthcare costs.

Donahoe said: “It all comes down to one word for this industry: affordability. The faster we can reduce costs, the better we can avoid pressure to raise prices. That’s why we continue to seek comprehensive reform legislation to provide more flexibility in our business model to create a sustainable platform for the future.”

 

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