THE DEAR old postage stamp is well and truly licked. And the culprit is easy
to find: it’s e-mail. These days it seems you can send just about anything over
the Internet. And if it can’t be written or attached to an e-mail you can bet
there are half a dozen e-businesses only too willing to send it for you. So
where does that leave the traditional carrier, the postal service?
Healthier than ever, if we are to believe Britain’s Post Office. Rumours of a
paperless society ushered in by computers appear to be way off the mark. At
least that’s what the postal services are telling us: business is booming.
“There’s something particularly attractive about holding something in your hand.
The first thing most people do with an e-mail is print it,” says a
spokesman.
And at a first glance, things do indeed look good for postal services. The
Post Office has seen a steady increase in the volume of mail since the late 80s.
In fact, the emergence of new technologies such as the Internet and mobile
phones has bulked out the mailbag. For example, your average annual mail drop
increases by 14 extra letters a year when you buy a mobile phone.
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But on closer inspection, such growth might not be sustainable. A government
report, published by the Cabinet’s Performance and Innovation Unit at the end of
last month, notes that the Post Office has recognised that problems lie ahead.
“With the growth of e-mail, and Internet-based services, the Post Office
predicts that the overall letters market will remain static or decrease over
time. The impact on the [Post Office] network will be a declining share of a
shrinking letters market.”
Reminded of this, the Post Office spokesman concedes: “We have taken the view
that with the growth of e-mail and mobile phones we have to expect that the
growth of letters, which has been growing steadily since the 60s, will not be
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Last year in the US, a report produced by the General Audit Office went a
step further, predicting a decline in first-class mail by 2003. Based on US
Postal Service projections, the report found that the Internet threatened to
wipe out $17 billion worth of post office revenue and perhaps even
compromise its ability to provide a universal first-class mail service.
The reasons for the threat become apparent when you analyse the content of
the mail (see Graph). In Britain, 12 per cent is so-called social
mail—letters, cards and invitations. At a time when people are
communicating on a social basis more than ever you might expect business in this
sector to increase. But last year the Post Office saw it drop by 1.7 per
cent.
The Post Office dismisses this as an anomaly, but the evidence suggests that,
although e-mail has prompted a renaissance in “letter” writing, in the form of
e-mails and text messaging on mobile phones, the trend is not mirrored by a
revival of the billet-doux.
Far more worrying for postal services is the loss of financial mail. Bills
and other non-commercial financial mail account for 37 per cent of the total
volume. Because businesses are always looking for a cheaper way to do things,
electronic billing could rapidly make this the most vulnerable sector of mail,
according to Greg Schmid of the Institute for the Future in Menlo Park,
California.
It is still too early to put a precise figure on how many people are turning
to electronic billing. But according to a study carried out by London-based
marketing group BMRB, more than 1.5 million adults in Britain were accessing
their bank accounts online by the end of last year.
The Post Office’s traditional image of the stamp and envelope representing
its trade will probably become an anachronism, says Pema Radha of the Internet
banking company Egg. “There are much faster methods of communicating,” she says.
All of Egg’s 300 000 credit card holders get statements or correspondence only
by e-mail, she explains. And as high-street banks start to follow suit it seems
likely that this is a trend that will stick. “It will definitely have an impact
on the postal service,” she says.
David Smith, of the online bank Smile, agrees. He says that the operating
costs for online banking make it crazy for a business not to use online
communications. “The cost of running an online bank is about one tenth of a
branch-based bank,” he explains.
What’s left of the mail consists of commercial mail and junk
mail—euphemistically called direct mail. This also appears vulnerable.
According to Graham Avory, of E-Centre UK, a trade association for standards and
practices for e-commerce, commercial mail is likely to begin migrating to the
electronic medium before the end of the year. The reason, he says, is the
imminent development of a standardised form of data interchange over the
Internet.
He too believes the postman’s sack is about to become a lot lighter.
“We have all felt that the post will find itself looking for another role, ” he
says. “I know that the post people have concerns about this.”
Will the Internet become the new vehicle for junk mail? At the moment the
electronic version is about as welcome as a pariah. Known as spam, or
unsolicited e-mail, it has yet to make a mark on business. But this could easily
change. As the Internet becomes faster and bandwidths larger, it will become
more practical to send glossy images electronically. This could have a profound
effect on the industry if, as seems likely, people start to respond to spam in
the same way as they do to conventional glossy junk mail—take in more of
the promotion than they plan to, before chucking it in the trash. “In five
years’ time they will be able to send you messages that are individually
tailored to you,”says Schmid.
Mother’s Day
In Britain, at least, the Post Office is reaping one benefit from people
buying online—they get to deliver the goods. But this is quite different
from monopolising the delivery of letters: it is much more competitive. Just two
weeks ago, two new online services were launched in London which promised to
deliver goods within the hour. In response, the Post Office is now offering
evening deliveries.
Postal services are also embracing the new technology in a bid to stem the
tide. One idea being tried in the US and considered in Britain is the electronic
stamp. This is a system that allows businesses to effectively print their own
stamps and be billed over the Internet. Another potential money earner being
tested by the Post Office is the public key infrastructure called Via Code. This
is an electronic backbone for online transactions, providing encryption
facilities and electronic signatures.
The Post Office is also experimenting with a slightly bizarre new service
where businesses send their written communications electronically over the
Internet to the Post Office. There they are printed and stuffed into an envelope
and sent on to the destination. The Post Office hopes some customers will
appreciate the convenience of not having to print and post letters. It’s too
early to see if there is a demand for this, but it illustrates the Post Office’s
determination to adapt and survive.
The Post Office remains adamant that stamps won’t die out, “Absolutely not,”
says the spokesman. “There’s something about the hard-copy letter that has a
certain impact and appeal.” Since its creation in 1840 the stamp has survived
the telegraph and telephone. “And there’s always Mother’s Day,” he adds. “You’re
not going to be sending an e-card on Mother’s Day. Not if you want to hear from
her again. The stamp will be here forever.”
But whether it happens in three years or ten, it seems certain that more
people and businesses will be clicking a mouse than licking a stamp, whether the
Post Office likes it or not.