Understanding Postal : USPS Transitions to Digital Agency in Hopes to Survive

The U.S. Postal Service is dipping its toes into the digital waters, recently announcing plans to embark on several digital initiatives, starting with the formation of a new Digital Solutions Group (DSG) within its organization.

USPS Vice President of Digital Solutions Paul Vogel told customers at a recent meeting that the federal agency is considering how best to transition from the existing hybrid environment of physical and digital into a more digital role in the future. The Postal Service defines "digital solutions" as "products or services that enhance physical USPS offerings with digital capabilities," such as the USPS' recent Every Door Direct Mail (EDDM) offering, or those initiatives that "present fully digital alternatives to physical products and services."

The USPS has been conducting market analyses and surveys concerning its potential role in the digital arena. To date, feedback received by the USPS confirms that there is a market demand for its solutions; it's not easy to make money in digital; the USPS initially should remain true to its core values and mission; the first few USPS digital initiatives must succeed in order to gain commercial mailers’ trust; the USPS should set up a separate group to "try fast and fail small"; the market changes quickly; and the USPS needs to engage with industry partners.

One of the challenges the Postal Service faces in establishing itself as a digital services provider is the fact that it's never been thought of in that light before. "The USPS isn't thought of as having digital bang," Vogel told customers, "so we need to start slow, not big, or else no one will believe us." He added that the USPS is looking to ease slowly into digital by enhancing its core products and its reputation along with those efforts. Stressing that the USPS isn't giving up on physical mail, which Vogel said still has "a long life cycle," he told customers that the agency is focusing on adding electronic enhancements to its existing core products and services.

Vogel also said that the feedback the USPS received, particularly that its first few digital initiatives must be successful, points to a need to change the agency's culture. Noting that 60 percent of digital activities fail — e.g., some apps are more popular than others, some apps are given away free because of their lack of commercial value — Vogel said that digital represents somewhat of a "culture conflict" at USPS. He said the Postal Service tends to engage in big activities, "but digital is about doing hundreds of little things all at the same time and allowing a lot of them to fail." Vogel added that the USPS would use a lean development process to try a lot of things, let go of the ones that don't resonate and keep a constant churn of ideas, expecting that some will fail.

• MORE ON
• E-COMMERCE