The Postal Service's retail channel provides local access for the core product applications of correspondence and transaction mailing, domestic and international package shipping, and special services, including delivery through more than 19 million Post Office boxes. The major customer segments for retail are small businesses and consumers (customers using the mail for personal, rather than business reasons). It is estimated that consumers and small firms generate retail revenue of $7.4 billion and $8.7 billion, respectively (meters, permits, and corporate accounts not included). Total retail revenue for 2003 was $17.3 billion.

     Customers can access postal services through traditional Post Offices, stations, and branches as well as through alternatives such as contract postal units, vending, online services, stamps by mail, and consignment locations.

     Approximately 85 percent of all retail revenue and 96 percent of all retail operating expenses accrue from the Postal Service's classified Post Office and contract unit fullservice options. They are augmented by Stamps by Mail, more than 30,000 revenuegenerating vending machines, 4,000 contract postal units, and stamp sales at thousands of commercial retail outlets and ATMs.

     Although the Postal Service has a straightforward product line, many postal customers are not familiar with some of the basic services or how to best use them. Addressing this need for basic product information is central to the Postal Service's retail marketing activities. A principal tool in this effort is the Retail Marketing Calendar, a tightly-managed 18-month schedule of planned promotions, activities, and events that help to guide postal customers and employees through major mailing seasons. The calendar also helps to support ongoing promotions for products such as Express Mail

and Priority Mail products by presenting basic information at a time customers are most likely to buy and use the services. Although the Postal Service has achieved success with its product information programs, until recently, most efforts have been focused largely on consumers. Several efforts were initiated to use the Postal Service's established relationships within the small business community to assist small businesses with their mailing needs and generate new revenue. These include building a response infrastructure that ensures customer follow-up and an ongoing relationship with the customer.

     The vision of the Point-of-Service (POS) ONE system is to provide customers, retail associates, and Postal Service management with the most effective retail sales, service, reporting, and decision support functionality that conveys value to customers and enables a service orientation for employees.

     POS ONE is replacing integrated retail terminals (IRTs) in the Postal Service's larger offices with state-of-the-art hardware and software, along with support services and training. Postal Service customers receive accurate information about available products and services and have immediate access to options and cost data to easily make informed decisions. Retail associates receive timely and reliable information regarding new products and services, updates to policies and procedures, and corporate direction. Managers and supervisors have easy access to performance data that enables them to make more informed decisions regarding day-to-day operations.

     POS ONE is currently in place at 10,276 sites, providing detailed transaction data for approximately 76 percent of walk-in revenue for postal services. Stage 3 implementation began in late June 2003, and will expand

     POS ONE to approximately 15,000 total sites. POS ONE has enabled the development and implementation of the Retail Data Mart (RDM). The data mart, as part of the Enterprise Data Warehouse, provides easy.