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Can the U.S. Postal Service Market Itself to Success?

Forget rain, Sleet, snow and gloom of night. The postal service now Faces something FAR worse: competition. With everybody from FedEx to the Internet bleeding its former monopoly, the agency is trying to reinvent itself with flashy ads and high-tech services.

December 22, 1996|MICHAEL A. GOLDSTEIN | Michael A. Goldstein writes about marketing for New York and Business Week magazines

With $20 million already invested and possibly hundreds of millions in the immediate future, electronic postmarking sounds like another blunder. Who would pay a per-letter fee for e-mail when they pay nothing now? Businesses. Mark Levitt, a research manager at International Data Corp., a market research firm, says, "Financial institutions, law firms, government agencies, hospitals--those who need to know precisely when a court filing or a bid was delivered. Would you pony up 22 cents for a $100,000 contract? Of course. That's nothing." Electronic postmarking is already being tested in Sacramento hospitals and elsewhere; the postal service is talking to Lotus and Microsoft about integrating the postmarking into their systems and working on encryption technologies to make online business more secure.

Levitt says that for many business users these services will become inevitable. "The postal service is getting in on the ground floor, which is smart," he says. "This demand for Internet security is not a fad." He cautions, however, that this will not be a big revenue booster "for a long, long time."

But do we really want the post office to handle e-mail? This is the same outfit that, in August of this year, had a software error accidentally eliminate the Patent Office in Washington's ZIP Code--20231. For two weeks, all patent filings were returned to sender, over 50,000 pieces, wreaking havoc with the nation's intellectual property.

Think about it: When America Online crashed this year, it made the front page of every business section in the nation. What happens when the postal service computers go down? Letterman and Leno would have a field day; camera-hogging politicians would call for investigations. Even if businesses want electronic postmarking, why can't the private sector provide it? Runyon says, "Many companies come to us and say, 'We need a third party that we can trust that the messages are not tampered with.' The postal service is that trusted institution."

Levitt agrees. "This isn't rocket science here. And they won't be a monopoly online. If you want their service, fine. If not, you simply send e-mail without an electronic postmark, the way you've always been sending."

The postal service is also rolling out two other spiffy cyber-products: Global ePost and NetPost, which allow big computer-to-computer handoffs directly to the postal service. In theory, a small-business owner might be able to closely manage, say, the Christmas catalog mailing right from her laptop, saving the headache of running back and forth to printing and letter-preparation shops and ensuring that timing is perfectly coordinated. On a larger scale, Visa or American Express or MCI could wait until the eleventh hour before sending bills, making sure every purchase is on the statement, possibly even including those made the same day.

The electronic post office is quite a gamble. Already, the first interactive postal venture has folded, through no fault of the postal service, however. In September, Time Warner quietly pulled the plug on its much-hyped Orlando interactive cable experiment, which included features offering stamps and postal products. The debacle should serve as a cautionary tale: The information age has not been kind to the corporate giants clambering aboard.

The postal service is at a crossroads. The devil: The post office won't just lose your mail, it'll lose your e-mail, too. The deep blue sea: A "back-to-basics" post office will lose so much business to the Internet that stamp prices will rocket. Were he alive today, Ben Franklin, who headed up the operation 220 years ago, would probably gamble on the future. Then again, he might well be sitting next to Loren Smith, on the sidelines, fly-fishing.

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