{"id":19086,"date":"2016-11-18T16:14:39","date_gmt":"2016-11-18T21:14:39","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/how-to-save-the-u-s-postal-service\/"},"modified":"2016-11-18T16:30:07","modified_gmt":"2016-11-18T21:30:07","slug":"how-to-save-the-u-s-postal-service","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/how-to-save-the-u-s-postal-service\/","title":{"rendered":"How to Save the U.S. Postal Service"},"content":{"rendered":"

For so long, the challenges facing the United States Postal Service (USPS) have perplexed thought leaders and politicians all over our country.\u00a0 Year after year, the Postal Service loses billions of dollars, all while new technologies and new competitors continually enter the shipping and logistics market.\u00a0 In fact, in 2010, the USPS projected it would lose over $200 billion over the next ten years[1]<\/a>.\u00a0 Data shows that over the last two years, 2014 and 2015, the USPS has lost $5.5 billion and $5.1 billion, respectively[2]<\/a>.\u00a0 Keep in mind that exacerbating these losses is the fact that the Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products, and services to fund its operations[3]<\/a>.\u00a0 Many have called for the privatization of the Postal Service, but this would require bipartisan cooperation in Congress to sell off the country\u2019s second largest employer during a period of (historically) higher unemployment in the United States.\u00a0 All of this begs the question, how can we save the Postal Service?<\/p>\n

The answer is a true commitment to a digital strategy that represents a full \u201ctransformation of mail\u201d and monetizes other assets of the Postal Service.\u00a0 Sure, USPS has used digital technologies to optimize their logistics network and delivery services, primarily for cost cutting, but there are attractive adjacencies available to the Postal Service that could put them back on track to profitability.\u00a0 The proposed digital strategy contains several growth opportunities for the Postal Service: increasing the use of data to build a more data-rich environment for customers; accelerating\u00a0the digitization of physical products; and speeding up digital transformation to optimize operations[4]<\/a>. Megan Brennan, Postmaster General and CEO of the Postal Service, has introduced two specific digitalization initiatives that have gained significant traction during this past year.<\/p>\n

The first initiative is a robust data and analytics platform called \u201cInformed Visibility<\/em>\u201d.\u00a0 This platform will aggregate and track data and analytics across the Postal Service\u2019s supply chain and later monetize this data for private use.\u00a0 In essence, the Postal Service will begin to offer commercial customers information that enables greater visibility associated with the \u201clast mile\u201d of delivery, one of the more challenging aspects of the supply chain.\u00a0 With robust data, tracking, and analytics, commercial customers can better coordinate personalized mail to consumers and create omni-channel marketing campaigns that serve as a much more powerful marketing and communications tool.<\/p>\n

The second innovation is a mobile application, Informed Delivery<\/em>, that tracks and photographs letters, catalogs and packages and sends all of this data to users through periodic updates.\u00a0 The USPS claims that Informed Delivery immediately increases the value of direct mail by doubling the number of impressions users see \u2014 one physical and one digital \u2014 that marketers will inevitably be able to use to better target their addressable market.\u00a0 In 2016, the USPS did a roll-out of this application reaching approximately 67,000 users in New York and Virginia[5]<\/a>.\u00a0 Results have shown that 70% of subscribers opened the application daily and that more than 90% percent of users read notifications four or more times a week[6]<\/a>.\u00a0\u00a0 The beauty of Informed Delivery is that it engages customers on a daily basis, all in real-time, which gives paying marketers another channel to reach consumers in every pocket of the U.S.\u00a0 Given the success during beta testing, the USPS has plans to roll out Informed Delivery nationwide in 2017.<\/p>\n

The real competitive advantage of the Postal Service is that it is the only organization that is embedded in every neighborhood in our country.\u00a0 By adopting more digital solutions, the Postal Service has even more room to grow outside of its core service offering.\u00a0 Three additional areas the Postal Service can emphasize (modeled after some foreign postal services in Switzerland, France, and Denmark) are the modernization of hybrid mail categories; the continuation of services related to electronic money transfers; and the introduction of a secure supply chain assurance platform based on existing the existing USPS digital infrastructure.\u00a0 While the opportunities seem endless, the Postal Service faces a huge problem: the legal framework in the U.S. prevents it from entering into non-postal service offerings, forcing USPS to double down on its flawed core business.\u00a0 So, in order to accelerate this digital transformation, it is time for reform if we hope to save our Postal Service.<\/p>\n

(717 words)<\/p>\n

\n

[1]<\/a> United States Postal Service. Ensuring a Viable Postal Service for America<\/em>. March 2010.<\/p>\n

[2]<\/a> United States Postal Service 2014 and 2015 Annual Report to Congress. Postal Regulatory Commission<\/em>.<\/p>\n

[3]<\/a> United States Postal Service. \u201cU.S. Postmaster General Unveils Digital Strategy to Support Mailing Industry at National Postal Forum.\u201d<\/em>\u00a0 Press Release March 21, 2016.<\/p>\n

[4]<\/a> United States Postal Service.\u00a0 Riding the Waves of Postal Digital Innovation. <\/em>July 20, 2016.<\/p>\n

[5]<\/a> Digital Marketing News Database.\u00a0 March 22, 2016.<\/p>\n

[6]<\/a> Ibid.<\/p>\n","protected":false},"excerpt":{"rendered":"

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