The following is a postal perspective by AMMA President Gene Del Polito. The views expressed here are more than just the author's.
Direct marketing in America is undergoing some very fundamental changes, particularly when it comes to the selection of the media direct marketers are using to reach their intended audiences. There once was a day, not very far off, when mail was king of direct marketing media. If you wanted to reach a diverse marketing audience, mail was practically the only game in town. Everybody who was anybody in this industry believed that direct marketing and direct mail marketing were synonymous. Well, with the advent of telecommunications-based technologies, you can kiss those days good-bye.
You don't need to look to the whiz-bang wonder of the World Wide Web to notice the change. In fact, the plain old telephone system (POTS) already has provided businesses with new telemarketing and fax-based marketing tools. For that matter, plain old everyday broadcast and cable television and radio haven't been sitting around on their duffs either. These conventional media have made great strides in learning the ins and outs of targeted marketing by helping businesses to focus their messages on just the right channels and at just the right times of day to enable marketer and audience to connect.
Then, of course, there's the Internet. Marketing by email and the World Wide Web promises to transform the way America transacts a significant part of its business. In fact, the change already is well underway. This past Christmas season, for instance, saw an enormous growth in purchases made online. That trend is most definitely going to continue, and, in fact, will accelerate as even greater computing power and wider bandwidth finds its way into homes and businesses around the world.
The Postal Service itself has begun to see changes in the mix of its mail over the past two years. More financial transactions and other business communications are moving out of the mail and into some electronic form. Within the next three years, consumer banking will begin to show the effects of digitization. Orders, invoices, and payments will appear increasingly in an electronic form that connects computer-to-computer rather than mailbox to mailbox. In fact, "you have mail!" evokes a rather different perception in the public's mind than it did at the time of postal reorganization.
But as Doubleday Direct's Robert Posch and Columbia House's Barry Jay Reiss are so fond of saying, "you can buy it over the Internet, but you've got to ship it by mail." They obviously don't mean "mail" literally, since there are options for fulfilling online orders through someone other than the U.S. Postal Service. United Parcel Service and Federal Express are more than interested in capturing this Internet business. The real point that Posch and Reiss are making, however, is that, unless you're on the Starship Enterprise, there is no nifty-swifty electronic way to beam a parcel's molecules from one location to another. In short, whenever you buy something marketed to you by phone, television, radio, or the Internet, that something must be physically transported by a provider of shipping services.
Shipped? But by whom? Answering that isn't so straightforward.
Direct marketers have made plain that they require a postal system that: (1) has universal reach, (2) provides timely, reliable and consistent services, and (3) provides services at a price businesses find acceptable to pay. While United Parcel Service offer very reliable parcel delivery services, the prices and the reach fall short of mailers' expectations. On the other hand, while the Postal Service's reach and prices fill the bill, the reliability and the speed of service are short of the mark.
Quite frankly, when it comes to fulfilling direct marketers' fulfillment needs, the Postal Service has a few holes in its service offerings that create a whale of an opportunity for a more enterprising alternative. Indeed, I would imagine that if the Postal Service leaves these holes unfilled, a new parcel shipper of a Deutsche or Dutch post flavor could begin to blossom.
Take a company like Amazon, as an example. Amazon sells lots of books online. Amazon takes in billions of dollars online. But Amazon loses tons of money online. Why? Because Amazon pays much too much to ensure timely delivery of its customers' online orders. Why can't Amazon rely on the Postal Service as its primary shipper? Because the Postal Service's timeliness and consistency of delivery service is less than the marketplace demands.
Does the Postal Service need to languish in a parcel delivery limbo? Not at all. All it need do is to recognize where holes exist in its present panoply of services and customers' expectations and to begin to fill those holes with new service offerings.
For instance, if Amazon needs to have books and recordings shipped swiftly and affordably, why can't the Postal Service develop a new service for books and recordings that better matches the marketplace's needs. Why not create, for instance, a reasonably priced priority, bulk, bound printed matter shipping service for books or a reasonably priced dropship service for recordings? Indeed, if the Postal Service truly wants to recast itself in a more business-like mode, it can begin by filling the holes in these core business areas with new service offerings that can win the hearts, minds, and pocketbooks of its direct marketing customers.
And the Postal Service hasn't got any time to lose! Peruse the January 26 issue of The Wall Street Journal and you'll find an article on how it now is possible to download music over the Internet. By the end of this year, it is likely that whole CDs will be able to be downloaded over high-speed Internet circuits and burned into consumer-burned CDs, and all with the blessing of all those companies and recording artists who are desperately trying to ward off online piracy. Imagine. Today CDs, tomorrow books!
Fortunately, we now have a Postmaster General who knows that when marketers ask the Postal Service to focus on developing a "back-end strategy," they're asking for something more than a swift postal kick in the butt. But time's a-wastin', and if the Postal Service doesn't want to be orphaned amidst a potentially lucrative Internet-based economy, it has got to wake up to the reality that its services fall lamely in an Internet fulfillment no-man's that won't remain unfilled for long. As my physics teacher once told me, nature abhors a vacuum. For that matter, so do direct marketers.