Reinventing Post Offices in a Digital World
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DÜSSELDORF, Germany -- The Deutsche Post office across from the train station here offers DVDs, umbrellas, phone cards and toys -- with the processing of mail appearing nearly an afterthought. And the facility housing it is not a post office at all. Deutsche Post occupies a corner space in a bank.
With mail volumes decreasing 1 to 2 percent annually in many countries, European postal services from Germany to Sweden to Switzerland have reinvented themselves over the past decade as multifaceted delivery and information companies tailored to the virtual age. Though Deutsche Post by law still delivers to every address six days a week, it has jettisoned tens of thousands of buildings, 100,000 positions and its traditional focus on paper mail.
"We realized that being a national postal provider was an endangered business, that we had to redefine the role of postal providers in a digital world," said Clemens Beckmann, executive vice president of innovation of the German post office's mail division.
With the United States Postal Service facing insolvency, and one of the postal workers' unions hiring consultants on business restructuring, it is looking toward Europe for new operating models, even though American legislation currently precludes adapting some of those innovations.
After selling off all but 24 of 29,000 post office buildings in the past 15 years, the German postal service is now housed mostly within other business "partners," including banks, convenience stores and even private homes. In rural areas, a shopkeeper or even a centrally located homeowner is given a sign and deputized as a part-time postmaster.
At the same time, many European postal services, including the one here, have developed a host of electronic services that are increasingly making traditional post offices and mailboxes obsolete. Bills and catalogs can go first to digital mailboxes run by the post office on customers' computers, and the customers can tell the post office what they want it to print and deliver. And while Americans are asked to send in suggestions for what celebrity should grace the next stamp, Germans can buy virtual postage from their cellphones.
Deutsche Post has expanded package delivery networks to profit from the uptick in online shopping and has also progressively expanded its offerings into completely new areas, like running online marketplaces similar to eBay for freelance writers.
Instead of watching its business be eroded by more aggressive marketplace competitors, as has happened in the United States, Deutsche Post completed its purchase of the logistics company DHL in 2002, meaning many Americans have been customers of the German post office.
European postal services vary widely in their degree of adaptation to the digital age. "But the U.S.P.S. is probably the best example of a pure monopoly that has seen the least change," said John Payne, the chief executive of Zumbox, a Los Angeles-based start-up that offers virtual mailboxes for personal computers in the United States on a private basis and that has sold the program to foreign postal services.
Mr. Payne, who describes himself as a postal geek, has empathy for the failing postal service for all the regulation it must abide, including not being able to close an outpost "solely for operating at a deficit."
He said: "It's easy to say that the U.S.P.S. is a bunch of morons, but they live under legislative restrictions on what businesses they can enter and are expressly prevented from entering business unless it's related to physical mail."
To close a projected $9 billion budget gap, the United States Postal Service has proposed eliminating 3,700 of its 36,000 post offices and is selling off historic buildings that have anchored towns across America. The 17,000-square-foot neoclassical landmark post office in downtown Greenwich, Conn., was recently sold to a developer who plans to turn it into upscale retail space, perhaps a Bergdorf Goodman. Meanwhile, the post office will move to a former pet supply store.
European postal services started to think about new business models in the 1990s, when the European Commission opened up postal monopolies to competition and liberalized regulation. But the subsequent changes have come in response to declining mail volumes and, to a lesser extent, pressure to reduce greenhouse gas emissions.
While Deutsche Post was an owner of 29,000 post offices in 1990, it is now largely a tenant, with tens of thousands of counters lodged in other businesses. Outsourcing has allowed it to trim staff.
After Deutsche Post closed the post office in the village of Dorn-Assenheim seven years ago, it hired Renate Weitz, a retiree, to dispense postal services from her house each morning -- though it now has plans to close that "branch" as well. In Schmitten (population 10,000), Jens Kinkel took over postal tasks at his stationery store. "I run the post office to get more customers," Mr. Kinkel said. "Most buy stamps or envelopes and grab a paper as well."
Dr. Julia Neu, a professor of sociology at the Niederrhein University of Applied Sciences, said the loss of post offices had been particularly painful for older people in the former East Germany, where they doubled as meeting places. "A lack of post offices is mostly dealt with by people helping each other by sharing cars or dropping off mail for the ones who aren't mobile," she said.
But over all, advocates say, the expansion into virtual services has improved customer satisfaction, saved money and helped reduce carbon emissions.
Virtual mailboxes can receive, store and organize years of bills, sparing digital customers the need to check one by one the Web sites of credit card companies and cellphone providers, for example. While this free service was slow to catch on in Sweden, membership has spiked in the past year, said Anders Asberg, head of product and market development for the Swedish post office. For actual packages, Deutsche Post customers can choose to pick up items at automated banks of lockers in places like train stations; the locker number and opening code are sent to their cellphones. Posten, the Swedish post office, allows vacationers to transmit cellphone photographs that Posten prints as postcards and delivers as physical mail.
Surprisingly, perhaps, new postal models have not meant the end of direct marketing (a k a junk mail), a lucrative business -- though executives say such promotional material will be increasingly likely to arrive via computers and cellphones. PostNord -- an umbrella company that includes both the Danish and Swedish postal services -- now even helps smaller companies develop direct marketing campaigns through its "Advertising Planner," which boasts: "It's just as natural for PostNord to ensure that your offer reaches the right customer at the right time via satellite and cyberspace as via a traditional postman."
Benjamin Kilb contributed reporting from Germany.
First Published October 31, 2011 12:01 am