2012 Annual Report to Congress
& Comprehensive Statement

Driving Innovation

The world is constantly changing. Technology is evolving quickly and so are consumer habits and preferences. The Postal Service is investing in new products and services, and focusing on innovation to better compete for customers.

The evolution of digital technologies is one of the most significant forces shaping the mailing industry. People are increasingly communicating and managing their lives through smart phones and other digital devices. In the future, mail will be highly integrated into digital experiences — and the Postal Service will be spurring innovations that leverage data and technology to help shape that future.

QR codes are a good example of how mail is being integrated digitally with other communication channels. 2012 saw sizable increases in the use of QR codes in mailed marketing materials, which enable businesses to use mail to quickly promote and instantly connect a customer to a video or Web message. And QR codes are just the tip of the iceberg.

The Postal Service is focused on creating greater value for both the senders and receivers of mail. In an increasingly digital world, innovation begins by asking the big “What if” questions.

What if QR codes could enable one-click purchases?

What if people could manage their mail on their smart phone?

What if people could track the mail and packages they’ll be receiving today, tomorrow and the next day?

What if mail could interact with smart TVs and other “smart” devices in the home?

What if people could know the instant the mail they’ve sent or received has been delivered?

The Postal Service is developing technology solutions to bring these “what ifs” to life. It begins by leveraging data and technology to create compelling tools that make the experience of mail more interesting and valuable. Senders want to realize a high return on their mailing investment. Receivers want useful, relevant and compelling information. Innovations that achieve these goals for senders and receivers will ensure that mail remains a powerful communications and marketing channel.

The Postal Service has made large strides in collecting and using mailing data throughout its network. Enhanced tracking, real-time scanning and geo-fencing will enable exciting digital solutions. Marketers will be able to use mail to reach customers in more compelling ways and consumers will gain greater control over their mail and benefit from more creative offerings.

Innovation In Delivery

The Postal Service continues to benefit from the rise in e-commerce. Catalogues, coupons and other mailed offers spark purchasing ideas and inform online shopping. Online shopping then results in package deliveries — which have increased by 7.5 percent in just the past year. e-commerce seems likely to expand and evolve dramatically in the coming years, and the Postal Service is working to enhance the value of delivery.

The Postal Service conducted a pilot test of a package locker offering in Northern Virginia called gopost®, a variation on a popular, proven technology well established in Europe.

The concept is simple: the Postal Service sets up package lockers in convenient, high foot-traffic places -— in malls, parking areas or subway stops — and then enables customers to have their packages sent to a gopost locker. Receivers benefit from the convenience of collecting the package on their own schedules, not having to worry about a package being left on a doorstep, or having to visit a Post Office if they missed the letter carrier visit.

gopost has excellent potential to improve package delivery and enhance the way people interact with the Postal Service. It’s a simple, personal, convenient process that leverages data and technology and enables customers to have another delivery choice using a platform created by the Postal Service.

Testing for gopost, a new package locker service, was conducted by Postal employees in 2012 to evaluate operational and engineering performance. gopost will advance to an additional phase of market testing in 2013.

Innovation In Retail

Customer expectations of retail experiences are evolving rapidly, and the Postal Service is working to anticipate tomorrow’s retail environment. We operate 31,857 Post Offices, and retail partners provide customers more than 70,000 additional locations to purchase stamps and conduct other Postal transactions.

To better meet customer needs, the Postal Service is expanding retail partnerships and investing in self-service locations in high-traffic shopping areas.

The Postal Service also recruited 61 small businesses in rural America to operate Village Post Offices, an innovative retail approach that ensures a high level of access to Postal products and services in rural America. A Village Post Office can be operated by a local corner store, a gas station or even a library and provides basic mailing and shipping services.

The Village Post Office often supplements the offerings of the local Post Office, which may have limited window hours, and provides additional revenue to the business and better overall service to the customer.

The Postal Service aims to recruit as many as 500 small businesses to operate Village Post Offices in the coming years. It’s an important innovation among many new retail developments, and it helps strengthen America’s connections to the national delivery platform we provide.