The value of retail space continues to be explored through the Lobby Asset Valuation model, which segments Post Office locations, stations, and branches by the size and type of facility and by the types of customers they serve. By applying these metrics, the Postal Service can properly leverage its retail assets with potential partners.

1. Retail Sales

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 Box receptacles. The major customer segments for retail are small businesses and consumers (customers using the mail for personal, rather than business reasons). Total retail revenue for 2004 was $17.2 billion.

Approximately 85 percent of all retail revenue and 96 percent of all retail operating expenses accrue from the Postal Service's classified Post Office locations and contract unit full-service options. They are augmented by sales through alternate access channels.

To provide convenient, one-stop shopping for postal customers, many Post Office locations offer additional products and services, including Official Licensed Retail Products (with items added specifically for small business customers), passport photos, phone cards, and an expanded line of ReadyPost shipping supplies. New ReadyPost merchandise displays, including both the standard product line and new decorative boxes, were deployed in 2004 to 3,839 offices.

2. Building Customer Awareness

Many postal customers are not familiar with some of the Postal Service's basic services and products. Addressing this need for basic product information is central to retail marketing activities. New continuity menuboards for the basic product offering were deployed in June 2004 to all Post Office locations. These were supplemented by quarterly signage updates. The concept of Priority Mail bundles (Priority Mail combined with Delivery Confirmation service, Signature Confirmation service, or Insurance) was introduced on signage in October 2003 and had a positive impact on sales of these special services. Additional signage in support of Passport application acceptance also boosted sales of this key retail service to $111.2 million, a $20 million increase over last year. New merchandisers provided more customer access to our ReadyPost packaging products increasing sales to $91.1 million, a $9.9 million increase.

3. Point-of-Service One

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

POS ONE is replacing integrated retail terminals in the larger offices with state-of-the-art hardware and software, along with support services and training. Customers receive information about available products and services and have immediate access to options and cost data to 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 access to performance data that enables them to make more informed decisions regarding day-to-day operations.

POS ONE is currently in place at 14,143 sites and provides detailed transaction data for approximately 90 percent of walk-in revenue for postal services. Phase III deployment, which expands POS ONE to approximately 15,000 total sites, is scheduled for completion in February 2005.

POS ONE also enabled the development and implementation of the Retail Data Mart (RDM). RDM provides access to critical business information used for operational planning, sales, and market analysis. Transaction data about products and services are available for analysis, strategy development, and planning.

4. Retail Operations

With the activation of the RDM, reports and information critical to making optimal business decisions at the unit level are available in POS ONE offices.

Using an eLearning (distance learning) platform, training was developed for all POS ONE front-line supervisors, district and area support managers. The training focuses on the skills required to use the RDM, best practices, and actions required based on performance measured in a few key reports.

The RDM course represented the first broad application of eLearning for a significant number of field employees. The use of eLearning has allowed the Postal Service to deliver training at the lowest cost, while providing the capability to match training evaluation to actual performance on the job tasks. This allows for monitoring performance against training and enabling decision making that positively impacts operational efficiency and revenue.