The Disruption of the Mailing Industry

It does not matter which segment of the mailing industry you belong to – the digital world disrupts us all.  You have three simple choices.

1. Status Quo, Business as Usual and Inevitable Decline

You can refuse to change and go bankrupt or at best limp along with deteriorating sales and profits.

2. Specialization, Niche Positioning and More Effective Customer Relationship Management

You can find specialized niches where the new technology has a more predictable, manageable impact. You will have to manage your costs more effectively and will have to “market” your company to potential customers, offering solutions to their business needs, not just printing or mailing services.

3. Innovation, Collaboration and the Development of New Capabilities

Or you can embrace the digital world and change the way you do business. You will focus on innovation to create new capabilities and new forms of collaboration to ensure that you are integrated with value chain partners to create new benefits to customers. You will apply new technologies to your business processes and to your print or mailing jobs to generate new value and opportunities.

This is the long-term challenge and opportunity facing the industry. While other issues – such as postal operational changes, prices, and currently, legislation – are important, they do not address the industry wide changes that would have disrupted the industry even if the now much maligned Postal Enhancement and Accountability Act had been perfect. The reality is this – senders have a wide variety of options to try to get their messages and merchandise to their customers.  Their target audiences are also gaining more control over the channels and expect greater convenience and choice. Paper, print and mail can be a part of the solution set for businesses and households as they communicate, conduct transactions and build relationships. But it will not be business as usual.

The Digital Front End and Hybrid Mail

Consider the “digital front end” of the mail creation process. We’ve been talking about “hybrid mail” for more than a decade. Now it’s here and has already moved beyond the definitions we had been using. Almost any business will be able to bring together the elements of content management, graphic design and customer data to create an effective mailpiece or a mailing. They will be able to electronically enter it into the delivery system – perhaps bypassing traditional processing and transportation operations – and have it printed close to the points of final delivery. The entire operation will be supported by information systems that provide timely, relevant data throughout the process. Printed pieces will be infused with new digital capabilities, and mail will be an integral part of multi-channel customer management programs.

The Coming Technological Revolution in Postal Operating Processes

We are somewhat familiar with “seamless acceptance” and “100 percent visibility” being implemented in the Postal Service. There is also a lot of anticipation at the potential benefits of the stream of new data that will be available. There is another potential opportunity buried within the guts of the postal operating system. Much of the equipment is a decade or more old. As funds are freed up for investments in infrastructure or as new collaborative arrangements can be made with the private sector (public/private partnerships), processing operations can be significantly enhanced by digital technologies, robotics, and advanced information systems.

The Shifting Dynamics of Delivery

Consider the “sharp of end of the spear” of the dynamic delivery process. Delivery is no longer a commodity or utility service provided uniformly to all, but a bundle of services bringing targeted messages or merchandise to individual businesses or households, routes, ZIP codes or some other criteria, including recipient preferences. Modern delivery vehicles will be modular, efficient, all-seeing, nearly self-operating communication centers with highly connected operators who have built relationships with the people on their routes. Think about how the currently hyped “delivery drones” may be used to supplement these carriers by delivering critical packages or other material to the carriers while still on their routes.

Cultural Change at the Postal Service

We have not even begun to consider what an innovative, flexible and customer-focused postal system might look like. This cultural transformation may well be even more important than operational right-sizing and productivity enhancements currently underway. Think about what a connected, post-industrial workforce might do. A truly profit driven, competitive enterprise, even one with significant public and universal service obligations, would act much differently than the current Postal Service – which, despite good efforts to be “business-like”, retains too much of its deep roots as a government monopoly.

Creating a 21st Century Mailing Industry Ecosystem

The postal “ecosystem”, built around a process and rules oriented operating and regulatory structure that focused primarily on complex costing theories intent on keeping prices low and shifting costs to someone else, can become a platform for entrepreneurial opportunity. Almost every industry has regulations. They are fact of life, part of the business environment – not the center of it. Most industries focus on creating conditions for growth, not on developing ever more complex rules. Most industries have standards, but the standards enable businesses to operate more efficiently. The real story here is not about the rules but about opportunities being created by new capabilities within the industry and fresh imagination from outside traditional industry boundaries. Let’s talk.

By Kent Smith

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  1. Posts must innovate – redefine the postal consumer experience and reinvent themselves to survive, because a status quo, specialization strategy, selling a myriad of incremental products / services or continued cost-cutting cannot assure their long-term viability.
    Traditional growth strategies may not be sufficient. Posts will need fundamental, paradigm-shifting inovation to secure future sustainability.
    The USPS, for example needs to seriously revamp its retail selling model and restructure its retail operations to lower its “cost-to-sell” while deciding what role it will will play in an increasingly social-media society and what fully integrated multichannel (bricks-and-clicks) customer experience and products and services will work in its environment.

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