Monday, September 05, 2005

Facts of demise greatly exaggerated.

September 4, 2005

Why the Internet Isn't the Death of the Post Office

By JAMES FALLOWS

MILLIONS of people now rent their movies the Netflix way. They fill out a wish list from the 50,000 titles on the company's Web site and receive the first few DVD's in the mail; when they mail each one back, the next one on the list is sent.

The Netflix model has been exhaustively analyzed for its disruptive, new-economy implications. What will it mean for video stores like Blockbuster, which has, in fact, started a similar service? What will it mean for movie studios and theaters? What does it show about "long tail" businesses - ones that amalgamate many niche markets, like those for Dutch movies or classic musicals, into a single large audience?

But one other major implication has barely been mentioned: what this and similar Internet-based businesses mean for that stalwart of the old economy, the United States Postal Service.

Every day, some two million Netflix envelopes come and go as first-class mail. They are joined by millions of other shipments from online pharmacies, eBay vendors, Amazon.com and other businesses that did not exist before the Internet.

The eclipse of "snail mail" in the age of instant electronic communication has been predicted at least as often as the coming of the paperless office. But the consumption of paper keeps rising. (It has roughly doubled since 1980, with less use of newsprint and much more of ordinary office paper.) And so, with some nuances and internal changes, does the flow of material carried by mail. On average, an American household receives twice as many pieces of mail a day as it did in the 1970's.

"Is the Internet hurting the mails, or helping?" asks Michael J. Critelli, a co-chairman of the public-private Mail Industry Task Force. "It's doing both." Mr. Critelli's day job is chief executive of Pitney Bowes - yes, that Pitney Bowes, once known for its postage meters and now a "mail and document management" company. In the last few years, it has also functioned as a research group for the mail industry, commissioning a series of studies, available free at PostInsight.PB.com, that contain startling findings about the economic, technological and cultural forces that affect use of mail.

The harmful side of the Internet's impact is obvious but statistically less important than many would guess. People naturally write fewer letters when they can send e-mail messages. To leaf through a box of old paper correspondence is to know what has been lost in this shift: the pretty stamps, the varying look and feel of handwritten and typed correspondence, the tangible object that was once in the sender's hands. To stay in instant touch with parents, children and colleagues around the world is to know what's been gained.

But even before e-mail, personal letters had shrunk to a tiny share of the flow. As a consultant, Fouad H. Nader, wrote in a Pitney Bowes study, personal mail had "long ago been reduced to a minimum with the proliferation of telephone services in the last 50 years."

Personal letters of all sorts, called "household to household" correspondence, account for less than 1 percent of the 100 billion pieces of first-class mail that the Postal Service handles each year. Most of that personal mail consists of greeting cards, invitations, announcements and other mail with "emotional content," a category that is generally holding its own.

The same higher-income households that rely the most on e-mail correspondence also send and receive the most letters. Whatever shrinkage e-mail has caused in personal correspondence, it is not likely to do much more.

The Internet and allied technologies, meanwhile, are increasing the volume of old-fashioned mail in three ways.

The first follows the Netflix example: Postal Service fulfillment of transactions made on the Internet. About two million prescriptions a day - roughly one-fifth of the total - are delivered by first-class mail. EBay's vendors list five million new items daily, and those that are sold ship mainly by mail. One Pitney Bowes study found that online retailers were increasingly using paper catalogs sent through the mail to steer people to their sites.

The second force also involves finance. Many studies conclude that people are more and more willing to make payments online, but that they strongly prefer to receive the original bills on paper, by mail.

Since the late 1980's, mail to households from credit card companies has risen about 10 percent a year. Americans' financial lives have become more complicated, in part because of choices created by the Internet. In turn, banks, telecommunication companies, insurance companies and investment houses send more mail.

Third is the sleeper: the increasing sophistication of the Postal Service's own technology. Everyone takes for granted that FedEx and the United Parcel Service can track the movement of each item through their systems. The Postal Service has now installed similar scanning equipment, and in principle it can bar-code and scan every envelope or postcard and know where it is at any time. In reality, it does this mainly for a fee, for businesses that want to know their material has reached the right audience at the right time - for instance, the Thursday before a weekend sale at a local store.

In Internet terms, this and related improvements are intended to make advertising mail less like spam - unwanted and discarded - and more like embedded ads, tied to the content of a particular Web site.

"Over time, there is an increasing ability to send you only what's interesting to you, at a time when you're interested in it," Mr. Critelli says. If you have just moved, for example, that may mean mail from your new area's window-cleaning or handyman services. He says response rates to these targeted mailings are better than the dismal rates for the usual direct-mail campaigns.

The most touching artifact among these mail studies is a survey conducted by the Postal Service and called "The Mail Moment."

"Two-thirds of all consumers do not expect to receive personal mail, but when they do, it makes their day," it concluded. "This 'hope' keeps them coming back each day." Even in this age of technology, according to the survey, 55 percent of Americans said they looked forward to discovering what each day's mail might hold.

Now I'll confess my bias. My first real job was at the post office. On the days when I was paroled from the sorting floor to substitute for an absent letter carrier, I felt as if I was bringing the "mail moment" to people along the route. It's nice to think that such moments will survive the Internet.

James Fallows is a national correspondent for The Atlantic Monthly. E-mail: tfiles@nytimes.com.

Copyright 2005 The New York Times Company

0 Comments:

Post a Comment

<< Home