Just about everyone has come in contact with the United States Postal Service in the past year. And I’d bet that the interaction is largely the exact same as it was 10 years ago. Eclipsed by the digital revolution, I consider the USPS organization to be a digital loser for the 3 reasons detailed below: it’s failure to innovate around new consumer tastes, structural inability to leverage data, and a lack of a distinctive and cohesive digital strategy.
First, digital winners either adapt or innovate around changing technologies and consumer tastes, and they do so ahead of the market. The USPS, however, has failed to innovate as methods of communication have changed in the past 20 years. The model through which the organization creates and captures value has largely stayed the same over time:
- Provides access for marketers and retailers to reach a high volume of end-consumers, as the USPS is required to serve all Americans, irrespective of geography
- Enables marketers to focus efforts by geographic region, zip-code, etc. for location-specific offers
- Connects individuals to one another in a way that is seen as authentic and personal (e.g., hand written letters)
- Increasing prices over time drives incremental value from each piece of mail
- As a government-empowered agency, the USPS has exclusivity over the delivery of first and third class mail in the United States
While the USPS’s value creation/capture model has remained stagnant, new players have entered the market and developed more advanced and convenient tools that are pushing out the USPS. For instance, technologies such as Skype, Facetime, etc. have all created ways for individuals to authentically connect with one another. A handwritten letter is a novelty of the past when new technologies like these can connect individuals face to face. Even formal wedding invitations are moving away from snail mail and into services like Paperless Post.
Secondly, the USPS is legally prevented from using much of its data to innovate. As a government-related agency, it must protect consumer privacy and therefore is not able to share granular data with marketers/retailers to improve customer targeting. Jim Cochrane, Chief Information Officer and Executive Vice President at the USPS says, “We know a lot about where mail goes, and where packages go, but we really can’t use that information in ways that other companies might.” Instead, the USPS uses that data to solve, perhaps important but not so innovative, problems like optimizing driver routes.
Finally, to be a digital winner, an organization needs to have a cohesive and defensible digital strategy. The USPS’s approach seems to closer resemble a patchwork of various “digital” ideas that fail to cohesively address the organization’s digital issue. For example, the VP of New Products and Innovation Gary Reblin recently unveiled the Real Mail Notification (RMN) plan, in which the USPS takes a photo of every piece of mail that will be sent to ones’ home address and provides a preview each morning for what is about to arrive in the mailbox. Reblin proclaimed that RMN is ”an idea that is going to change and revolutionize direct mail.” I’d instead argue that RMN provides a duplicative service that lacks defensibility from retailers who could purchase large email lists and email direct offers to customers themselves.
RMN, combined with other ideas like promoting interactive features on physical mail (e.g., advanced inks, sensory papers, QR codes), don’t bring anything truly revolutionary to the table. Instead, it feels the USPS’s efforts are simply too little too late and call for a much larger re-imagination of what mail is to the U.S. consumer.
Source: DMNews.com, computerworld.com