Challenge
The existing postal branch network is expensive to maintain and neither profitable nor convenient.
Solution
Reduce costs and enhance revenue by shifting retail locations from brick and mortar Post Offices to kiosks and retail partners in existing high-profile shopping areas.
In our March 2, 2010 Ensuring a Viable Postal Service for America: An Action Plan for the Future, the Postal Service highlighted the need for expanded access to postal products and services to meet the changing needs and behaviors of customers and provide services in locations already frequented by customers. We outlined a plan to accomplish this goal through partnerships, kiosks, and improved online offerings, all while reducing costs through a more efficient network. Here too, 2010 has proven to be a year of progress.
In August, we announced a new partnership with Office Depot to make Postal Service shipping and mailing products available at almost 1,100 Office Depot stores across the country. Now customers, especially small business customers who are already visiting Office Depot stores, will have more convenient access to Priority Mail Flat Rate boxes and envelopes, Express Mail, Parcel Post and stamps.
This is just one way in which we are modernizing the existing retail network to better match the changing needs of our customers, while efficiently managing costs. In the past year, we have also improved and expanded our online offerings, allowing greater numbers of customers to access a full range of postal services from the convenience of their homes or businesses. In addition, we continue to expand access to stand-alone kiosks and explore additional retail partnerships and to expand online offerings via USPS.com.
Providing more convenient access to postal products where customers live, work and shop will ultimately allow the Postal Service to operate with much more efficiency. Once a robust network of alternative, better-situated retail access points has been established, we can thoughtfully assess less frequented access points, and determine whether they are still needed. Closing redundant facilities would allow significant and valuable cost savings necessary for future viability.
The American public supports this shift to greater access where it is most convenient. Current customer research has revealed that 79 percent of Americans surveyed were not concerned about closing Post Offices if postal services were available at other retail locations. Many actually preferred to have these services available in locations where they are already shopping during expanded hours in many cases. Since the Postal Service does not receive appropriated funds to maintain its network, closing redundant facilities also protects customers from the higher costs they might otherwise experience if these unused facilities were to remain open.
With the announcement of the Office Depot partnership, among other initiatives, in 2010 we have established a firm foundation for our vision of convenient, cost-efficient access to our products and services. We will continue to pursue these partnership opportunities, as well as other access innovations, to provide customers with the services they need, when and where they need them.
Survey Data: Consumer Acceptance of Retail Service Options
HOw would it affect you if the Post Office nearest to your home closed and its services moved to a USPS service counter at a nearby store?
Share of respondents, percent
Chart
Source: Consumer survey, December 2009, conducted by McKinsey & Company
USPS products and services are increasingly available via kiosks and other non-traditional access points.
