• on Nov 18th, 2013 in Ideas Worth Exploring | 1 comment

    The generation known as Digital Natives – born and raised in the age of the Internet – are said to live much of their lives online in one way or another. Indeed, while use of email is hardly exclusive to their demographic, it’s no coincidence that their rise has corresponded with the decline of mail volume.

    Now that Digital Natives account for the largest segment of the American population and are growing more influential every year in their buying power, it’s more important than ever to ensure the U.S. Postal Service is engaging this group. But do Digital Natives currently see any value in the mail?

    Surprisingly, yes. In our recently released white paper, Enhancing Mail for Digital Natives, we found Digital Natives have an abiding interest in the mail. In fact, Digital Natives check their mailboxes daily. They’re mainly interested in packages – things bought online, of course – but they also like regular mailpieces, especially those that integrate some type of digital technology, like augmented reality. Digital Natives said that if regular mail ever disappeared they would be unhappy for a variety of reasons - citing everything from no more handwritten notes to postal employees who would be out of a job.

    The white paper analyzes results from Digital Native focus groups recently convened specifically to assess current uses and perceptions of the mail. And some of those results are interesting, to say the least:

    • Digital Natives feel an emotional attachment to mail that they don’t feel with digital communications.
    • Digital Natives still appreciate receiving certain types of physical mail that are useful, such as coupons, and are more likely to use them when the hard copy coupon can be uploaded and used through a smartphone.
    • Their anticipation of packages leads them not only to check their mail daily but also look at mail they might otherwise ignore.
    • Digital natives still look at catalogs, but catalogs are more likely to lead to a purchase if they can be scanned by mobile phones or tablets.

    The paper details these and other findings that could help both the Postal Service and mailers develop strategies for making mail even more appealing to Digital Natives, and thus continue to meet current and future public needs.

    Do you agree with the findings of the focus groups, especially if you consider yourself a Digital Native? Let us know what you think. 

  • on Nov 13th, 2013 in Delivery & Collection | 6 comments

    This week the Postal Service announced plans to move into one of the few remaining frontiers of package delivery – Sundays.

    Under a new negotiated service agreement approved by the Postal Regulatory Commission, e-tailing giant Amazon.com will use the Postal Service’s Parcel Select service to ship everything from clothing to garden tools on Sundays. The program is running now in the New York and Los Angeles metropolitan areas, with a rollout planned in 2014 in Dallas, Houston, New Orleans, and Phoenix, to name a few.

    Sunday delivery isn’t exactly new. The Postal Service delivers 7 days a week using the premium Priority Mail Express product. So, what’s really new is the low cost of the service – making it a solid option for consumers.

    Utilizing the Postal Service’s ubiquitous delivery network Amazon.com is able to keep its costs down and, for example, give its Amazon Prime members who get unlimited, free two-day shipping the flexibility to get packages on Sundays.

    The Postal Service faces stiff competition as it seeks to grow its package business and take advantage of the explosion in e-commerce. But it has seen significant gains in its parcel sector through innovations such as flat rate Priority Mail packaging.

    With this latest move, the Postal Service is looking to strengthen its market position in business-to-consumer shipping and to further distinguish itself from its main competitors – FedEx and UPS.

    What do you think of the Amazon.com partnership? Do you foresee operational, staffing or other problems for the Postal Service as it ramps up for Sunday deliveries? Will this be a net financial win for the Postal Service and its customers? 

  • on Nov 11th, 2013 in Strategy & Public Policy | 10 comments

    Innovation is a hallmark of the digital revolution yet for many companies innovation remains hard. The popular book The Innovator’s Dilemma notes that companies often either ignore a disruptive technology or if they recognize it, they try to manage it like their traditional business. The book says companies need to recognize the disruptive technology and then set up a separate unit to manage it.

    The U.S. Postal Service finds itself struggling to innovate in a rapidly changing communications market. Yet, stakeholders agree that innovation is necessary to transform the Postal Service into a 21st century provider. The Postal Service has indicated a willingness to try new things, as allowed under the current law, but the time it takes new ideas to become a product or service is often too long in this fast-changing market. Some stakeholders have suggested the creation of a small, dedicated innovation unit that would have the authority to make partnership decisions and the flexibility to bring innovative products and services to market quickly. The major postal reform legislation now before Congress includes a provision that could essentially lay the groundwork for such a unit.

    The Postal Service actually tried small, cross-functional business units in the late 1990s. It had an international business unit that was given considerable autonomy and an Expedited Package Services (EPS) group located completely outside of headquarters in Atlanta. The EPS group was given freedom to pursue new partnerships and parcel services. Insiders might argue over how much of the credit EPS deserves, but in its short life, a number of package services were revamped or unveiled, including Parcel Select, Carrier Pickup of residential packages, and the groundbreaking contract with FedEx to provide airlift for Priority Mail. These separate units probably had some flops too, but innovation means taking risks and being allowed to fail occasionally.

    Do you think a small, agile, cross-functional “innovation unit,” led by a chief innovation officer, would help the Postal Service launch new products and services? Or does a dedicated innovation czar create a bottleneck that is inconsistent with the spirit of having innovative thinking permeate the entire organization? Would an “incubator” or “innovation lab” approach be better? What institutional changes might be needed to promote innovation? Does the current regulatory environment allow the Postal Service enough latitude to innovate effectively?

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