The July 10, 2016, New York Times Book Review contains a review of two books about the U.S. Postal Service, entitled “We Had Mail.” Lisa McGirr summarizes them as follows: “Two histories of the Postal Service, once a mainstay of communication, now a system under threat.”
I am more optimistic about the future of the Postal Service than either of these authors, but the Postal Service has to adapt in certain ways to take advantage of future opportunities:
Today, we want to receive communications and physical items immediately and choose where we want to receive them. Just as we know the location and arrival time of the Uber driver, and can communicate directly with the driver, we eventually will want the same level of service for mail.
The Postal Service can create a delivery system comparable to that of Amazon, Uber, or other services that deliver packages on demand, with no lag time other than the time in transit. It has a highly efficient and fast fixed route system, but processing and delivery are inherently slower than a point-to-point, on-demand delivery system.
Commentators generally think of e-mail and digital technology as a competitor to the Postal Service winning the battle for discretionary communications. That is an incomplete description of mail trends.
E-commerce mail competes with face-to-face transactional activity and is winning. By gaining share from face-to-face transactional activity, the Postal Service has a more positive future, but a very different one from its past.
Large “big box” retail outlets are closing and being replaced with e-commerce. Over the last two months, all Sports Authority retail outlets have been closing down. Major retailers like Macy’s and Walmart are reducing the number of their stores. Items we never used to acquire without visiting a retail store are now routinely shipped to our homes.
People who live far away from where they are shopping have often had items shipped because of the inconvenience of carrying the item while traveling.
However, more recently, some retailers are creating business models through which they maintain only enough inventory to display items in the store, but not to have purchasers carry them out. This is particularly sensible in communities like Manhattan, in which real estate is exceptionally expensive and it makes little sense to pay expensive rent for inventory storage space. As labor laws make minimum-wage stocking clerk employees more expensive, those jobs will disappear and more items will be shipped from warehouses located on less expensive real estate.
The classic example of a transaction driven by the need to insure that someone receives an item is the mail order delivery of pharmaceuticals. Insuring that patients renew prescriptions and continue to take prescription medications inevitably means that more prescriptions will be delivered by mail. This is because over 10% of all patients who are required to go to a pharmacy to pick up a prescription renewal fail to do so.
One unheralded growth opportunity for package mails is the growth of in-home fluid collection that is mailed to a test lab for various kinds of testing. Saliva is now used for genetic testing that provides ancestry information, as well as profiling for the presence or risk of certain diseases. Today, the number of people who have acquired the 23andMe or Ancestry DNA genetic testing kits and mailed them back for testing is well above 3 million per year and it is growing every year. Additionally, major medical research institutions are proactively sending out kits to clinical study subjects to gather more genetic kits.
The amount of mail generated by remote test kits will grow rapidly.
One significant change in our democratic processes is the growth of voting by mail. In California alone, in the 2016 President primary 5 million votes were cast by mail, compared with 3.8 million votes in 2012.
The Presidential election will also have a comparable increase in mail volume from 2012’s general election.
Some states that do not have “no-excuses” voting by mail are adopting early voting, which means that the ballot is mailed to every voter to give the voter the option of voting early in person.
Surprisingly, for states with strained budgets, a mail-based voting system is actually less costly than a system based on renting and staffing polling places. I also believe that, as the federal government gets more sensitized to the manipulation of voting processes by both political parties, there will be more focus on processes that make it easier for people to vote than those designed to make it more difficult. Mail balloting and early voting are both preferable to in-person election day voting in making voting easier.
Manufacturing, as we know it, has always been a bulk production process. Products or component parts are produced and assembled in bulk at a “factory” and shipped, usually by truck, to distribution centers or retail stores and then sold to members of the public. The Postal Service does not participate in this traditional logistics supply chain, although some of its competitors, like UPS, are major logistics services providers.
However, with the growth of 3D printing through faster throughput, lower cost, and greater material manufacturing capability, many more products or parts will be produced one at a time, either in a small factory or even in a residence, and shipped, via the mail, to a recipient. The Postal Service has recognized this opportunity in two white papers, as noted in this link.
Mail is very powerful when designed for relationship power and engagement. The engagement can be a bonding between and among friends, which happens when someone sends a highly personalized greeting card or handwritten letter, which show a recipient that the sender has taken extra effort to communicate a caring message. This is particularly true if a lot of thought has been given to the appearance of the envelope, including the kind of postage stamp selected.
Businesses engaging in multi-channel marketing, which includes an orchestrated campaign that incorporates direct mail, do far better than those which rely solely on digital marketing channels. SAS, the business intelligence software and services firm, has concluded that firms which use multi-channel marketing get 3-4x the revenue yield versus those relying on a single channel.
Multi-channel marketing is growing among non-profits as well because non-profits are getting smarter about how to reach out to donors and prospects.
Political mail is growing faster than ever, because campaign funding keeps growing. We not only receive solicitations or messages from candidates and political parties, but from special interest groups with far more discretionary funding available than either candidates or parties.
Political mail fits into three categories:
All are growing with each election, especially in Presidential election years. Because of the perceived stakes of these elections, the solicitations are now continuous, even though they may spike up in a Presidential election year.
Mail and the Postal Service can have a very bright future. However, the Postal Service will need the freedom to adapt its network to new opportunities. It has adapted over its proud history, but like most venerable old organizations, the adaptation required this time will be more challenging than it has ever been.