Neither Rain nor Snow nor Sleet … But Maybe Digital Mailboxes
The spate of winter storms much of the U.
By Cary Sherburne
Published: February 9, 2011
The spate of winter storms much of the U.S. has faced this season has had many postal carriers begging patrons to clear a path to their mailboxes despite the motto attributed to the postal service. But if Zumbox has its way, neither the motto nor the postal carriers may be needed in a future that features digital mail delivery.
We recently reported on Pitney Bowes Volly announcement, and that prompted John Payne, CEO of Zumbox, to give us a call. Zumbox operates the Zumbox Digital Postal System in the U.S. and is already working with DST Output for digital mail delivery. DST is one of the largest producers of transactional mail, producing and mailing nearly 3 billion customer communications annually for some 600 large issuers of transactional mail and other customer communications. Today, Zumbox announced a partnership with Kubra, who, while perhaps not as recognizable a name as DST, supports about 400 large mailers, bringing the Zumbox total in the U.S. to 1,000—a significant dent in the market.
Both Pitney Bowes and Zumbox see the opportunity to help mailers reduce costs by speeding the migration to digital mail. According to Payne, about 15% of consumers have opted for no paper today on some or all of their transactional mail, and about 30% say they have no interest in suppressing paper. “That leaves 55% of consumers and about a $20 billion cost savings for mailers on the table,” he says.
The Zumbox solution allows consumers to aggregate their mail in a secure digital mailbox where Payne asserts that the company will store their documents forever for free, although some premium paid services are available. The service is paid for by sharing cost savings with mailers, who can spend as much as 60 to 90 cents producing and mailing a paper statement, notification or other customer communication. Today, the solution is focused on transactional mail, but Payne claims that by 2012, more marketing mail will be included
Payne is also quick to point out that Zumbox has been operational and available to consumers for some time, while Pitney Bowes reports that Volly won't be available to consumers till mid-2011.
Nonetheless, these types of offerings will clearly provide very acceptable paperless options to consumers, many of whom will take advantage of one or the other … or some other new offering yet to hit the market. The big loser in this transition will be the United States Postal Service, as it sees the volumes of transactional mail continue to decline. In its FY 2009 Household Diary (the most recent available), the USPS is already reporting a nearly 10% decline in overall transactional mail, including a 16% decline in bill payments through the mail—arguably one of the most profitable components of the mail, since return envelopes are optimized for automated processing, and consumers pay full postage rates to mail these payments. In fact, just over 50% of household bills are now paid via the mail, and the average number of bills paid electronically has increased by 20%.
Confirmations, no longer required to be sent via hardcopy mail, reflect a 21% decline in the same period. Transactions sent and received through the mail comprise about 27% of all household mail, according to the USPS, and 59% of household First Class mail—clearly an important piece of the USPS' declining business.
Zumbox, Volly and other digital mail offerings will continue to steepen this decline. There is not much the USPS can do about it … hampered as they are by regulations and their quasi-governmental status. Watch for more bad USPS news as the Postal Service struggles to adapt to an increasingly digital world.