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Race for America’s digital postal mail market heating up

Wednesday, February 9th, 2011

The development of a paperless postal system in the United States has taken a step forward today with technology developer Zumbox signing up a major mailing partner.

KUBRA operates electronic billing systems for major telecommunications, utility, healthcare and finance companies, bringing 400 mailers to the Zumbox system.

Collectively, KUBRA’s customers send out around one billion pieces of transactional mail each year.

Along with existing partnership with transactional mail printing firm DST Output, it means Zumbox now has around 1,000 mailers that can use its technology to send transactional mail electronically, rather than through physical mail services.

Zumbox told Post&Parcel ahead of today’s announcement that it is planning to launch the consumer side of its electronic mail box offering in the second quarter of this year.

In the mean time, it is also continuing to build partnerships with mailers – racing to sign up mailers in competition with other digital postal mail providers such as Pitney Bowes’ Volly.

John Payne, the former Stamps.com CEO who leads California-based Zumbox, said his company believed 2011 would be the “the year of digital postal mail”, when it would break through in terms of engaging mailers and consumers.

For mailers, digital mail means potentially cutting out $20 billion in printing and postage costs in the US, but while expectations are high for consumer acceptance, questions remain as to how many different versions of a digital mail platform will be supported by mailers.

“Digital postal mail will provide an important output alternative for our clients to improve their customer communications,” said Rick Watkin, CEO of KUBRA. “Our alliance with Zumbox provides us with a powerful way to increase paper suppression rates and dramatically reduce costs for our customers.”

Zumbox has been developing its technology for two years, including involvement of consumers in a mainly test role, but now hopes to get the jump on competitors in the digital postal mail field with this year’s launch.

“For us, it’s very soon, it’s in the second quarter. For some of the other competitors in the market it’s either the end of this year or next year,” he said.

The Zumbox platform has every physical street address throughout the United States mapped out and ready for consumers to claim when registering an account.

For KUBRA’s mailer customers, the Zumbox platform will integrate with KUBRA’s existing online billing system. When a consumer receives an electronic bill in their Zumbox, it means they can click a button to pay the bill online using KUBRA’s platform.

As well as easy payment of electronic bills, Zumbox will be selling its system to consumers later this year on the organizational benefits of a system that automatically archives their bills, making them easily accessible for future reference.

Another key selling point will be the security aspect of a “closed” electronic mail system that cannot be abused by spammers, an important differentiation from current email services.

Payne said initially his company was targeting transactional mail, but in the future mailers will be able to send direct marketing to consumers that opt in to receive them.

“You’ll opt in to the system to be able to receive it, and then you can opt out either completely or you can opt out on a sender by sender basis,” he explained.

For direct marketing clients, the system will offer feedback on marketing approaches that work, as consumers are tempted to sign up to receive sales offers or coupons, and those approaches that do not attract attention.

“We can actually communicate that with the various brands, which lets the brands that are rejected work harder and lets the brands that are accepted actually engage better with the consumer,” said Payne.

Source: James Cartledge, Post&Parcel

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