The first in a series of reports from the OIG’s Risk Analysis Research Center on how the USPS should be engaging with an increasingly digital US population, the study says the USPS actually has a major advantage over private corporations in pursuing online opportunities.

While private sector companies may be more agile and innovative in internet technology, the USPS has the key advantage of already being a “trusted intermediary” in the US, it states.

The public would see the Postal Service as providing an agenda-free, neutral platform offering a service at the lowest possible price and for the greater good, the report suggests.

While the OIG held back from setting out a digital communications strategy for the USPS – with promises that it will follow in subsequent work – it does highlight a number of key gaps in the current digital landscape which the USPS could be in a position to bridge.

The report echoes this month’s GAO report in calling for the USPS to be more open to ideas from outside in how to do this.

Working with other government agencies and private sector partners, the OIG study concludes that the Postal Service could create “game-changing” services.

“The ability to learn from and work across the private and public sectors is crucial for the Postal Service to continue to be a ‘platform provider’, bridging the physical and digital worlds and closing the gaps that are currently preventing a fully digital economy,” the report states.

“Digital natives”

The study notes that by 2020, some 40% of the US population will be “digital natives”, born into the use of internet technology and increasingly reliant on electronic communications, with a resulting fundamental impact on American business models.

But, while the report predicts double-digit growth in areas like e-commerce, forecast to grow from 4% of retail sales in the US to 6% by 2014 (some $249bn in revenues), it identifies public trust as a key barrier to this growth.

Although larger retailers are building public trust in online retail services, the report states that it is much more difficult for smaller retailers to do likewise, with the fear of handing over credit card information at the top of public fears.

Perhaps a symptom of this lack of trust, the current trend in the US is for consumers to research products online, but then make purchases in-store.

The issue is not limited to e-commerce, with the study stating that 36% of US people surveyed not trust the mail more than e-mail – up from 29% in 2008.

In response, the Postal Service could work with leading web service providers to become a major intermediary in the digital marketplace, according to the OIG report, stating that it needs to act quickly if it is to avoid missing the boat.

“Given the rapid cycles taking place in the digital economy, the window of time for action is limited. The Postal Service must establish a pivotal role for itself in this new emerging world to ensure its future relevance,” warns the report.

Two-way communications

The direct mail industry is set to experience moderate growth now that the US is emerging from recession, the study notes.

This continued growth is partly safeguarded because physical direct mail currently offers a better guarantee that marketing messages will “make it through the clutter” than marketing emails facing a growing use of spam filters.

However, bar the economic rebound, the overall trend is expected to see “two-way” communications moving more online, becoming more personalised to the consumer, and meaning further decline for physical mail as businesses and government organizations continue to invest in secure electronic communications systems.

The OIG report states: “Those with a future stake in postal services will need to understand these new dynamics and be able to envision the enabling platform and key applications, products, and services in 2020 to identify viable roles.”

Source: James Cartledge, Post&Parcel

Tags: digital mail, ecommerce, Email, Online Retail Delivery, USA, USPS