The author provides the script of his speech in Word doc form together with screen captures of his accompanying slides. Unfortunately, slides with motion or changes, such as a constructed promotional letter "unfolding" do not play. The full Powerpoint version, without script is available with teh same title

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Let me start by saying that this is not
about hybrid mail technology. This is not
about the latest technological
developments, the latest vendors, the latest
postal adopters. This is about re-
envisioning what postal systems do, or
should do, in the international mail
business. But we do need to define our
terms a little bit, and set up a hypothetical
to think about. Actually, you can have a form of hybrid mail experience by
visiting the Universal Postal Union booth downstairs where you can participate in
testing the Global Monitoring System, GMS.
Now, the phrase "hybrid mail" is not a technical and agreed term. For our purposes
let us call hybrid mail that portion of the postal transmission process which is
electronic and which begins as an electronic input from a sender which he intends
will be a physical output in the hands of the receiver. In addition, one could
provide the sender and recipient a choice of the form of the delivered message –
physical or electronic, and this requires more complexity in the system.
So, let’s suppose that I'm a big insurance company which every quarter prepares an
account statement for each customer which I must transmit to each customer. I
need to minimize the cost and maximize the accuracy of that transmission and the
arrival of the document in a physical form at my customer's address. Ideally I
would like to give my customer a choice as to whether he receives paper or an
electronic message. But, despite my efforts to convert them, for the most part they
insist on paper.
I am not talking about what is basically digital content management on a
local/domestic basis which is sold as a cost-saving service. That’s mail generation
and dispatch outsourcing, an alternative to having staff printing a letter, addressing
an envelope, inserting, maybe franking, and walking it to the mailroom which
walks it to the Post, or the Post comes for it. In this simpler scenario, you compose
it, email it to a vendor, and he prints it off, puts it in an envelope and walks it to the
http://hybrid‐mail.org/

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Post. Ideally, this post office is very close to the destination address, to optimize
the delivery rate and minimize the delivery, ie. the post’s expenses.
And that’s fine. It results in efficiencies. I use Click2Mail in the US, myself,
and since I’m a one-man office and my post office is a 3-mile drive away, it’s a
boon to me. But, it has more to do with the mail generation process than with the
mail process.
Here’s a mail process:
My insurance company has 250,000 letters/statements to send to clients in
15 different countries. All on a file, or multiple files. Here are the headaches:
getting it printed with “correct” addresses, sorted (maybe), bundled, tendered to the
post, shipped abroad to different countries, customs cleared, re-entered, re-sorted,
and delivered, maybe.
Now the Post says, “We can do that, but you know we lose sight of it when
we put it on the airplane. This will take maybe 3 to 5 days for delivery in the
industrialized countries, maybe 10 days in the rest of the world, and some number
of those letters will not be deliverable because the address is wrong, addressees
move, die, etc. What do you want done with those?”
“Well, bring them back to us and I’ll have someone change the database.
When do I get undeliverables? ” In this country, 2 weeks, in other countries, 3
months if you’re lucky. Never, if you’re not lucky. ”
And here are two examples of the
non-hybrid mail process, by the way, one
of which, the lower one, is by a company
referring to itself as a hybrid vendor, and
maybe it is if it was printed near the input
point in California. But the sad thing
here is both envelopes are returned
undeliverable, long, long after they were
mailed. Whatever happened to the
promise of the intelligent mail barcode?

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So, this is pretty much how mail
has been handled internationally since
even before the UPU was formed in the
19th century. The only difference
between the 19th
century and now is use
of the airplane. But the problem now is
that the posts have competition and need
to rethink their business.
Let’s look at what is happening. It’s not
entirely digital substitution – that’s the wrong focus, and a view that causes
potential dead-end policy choices. What’s happening is that the postal business is
undergoing something that is not unprecedented – consumer acquisition of the
power of choice. It’s just happening so late because the technological challenge is
new.
There is an excellent book, Satisfaction Guaranteed, by the social historian Susan
Strasser, which describes the growth of marketing as a discipline in the United
States in the late 19th
and early 20th
centuries. I commend it to you. She documents
the invention of marketing tactics by companies – packaging, factory tours,
premiums, product positioning, street signs, sampling. And, she documents a
powerful growth in consumer power. Before the industrial era and electricity,
industrial food production, and packaging, the consumer had few or no choices.
You could have anything, as long
as the store owner stocked it. And he
decided what that would be.
Ms. Strasser argues that the brand was
invented by product producers first as a
competitive necessity, to distinguish one
can of corn from another, for example.
So, not unexpectedly, the brand became a
powerful market lever for… the
housewife. She could tell the oldest child to go to the corner store and buy Trader
Joe’s branded canned corn, “And don’t let old Smith give you that other junk.”
The housewife now had the power of choice to literally bypass the monopoly on

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final distribution of this guy - the shopkeeper. He still owned the shelf, but he had
lost the power of choice as to what to put on it. All because of something called a
“brand”.
Now, the digital “revolution” is like the development of brands. It empowers the
consumers, which includes businesses, who now have “brand” choices. And of
course that new brand on the block is digital communication through the Internet.
And what was the response of the shopkeeper? Well, he combined with other
shopkeepers to form chains of stores to acquire purchasing power vis-à-vis the
manufacturers and market presence, but not necessarily power vis-à-vis the
consumer. He had to give the consumer what she wanted-choice.
A similar power shift has taken place with the creation of digital communications.
The communications choice given consumers and businesses is no less important
than the power shift created on the development of brands when applied to
consumer goods. The brand struggle for access to the merchant’s shelf required
they give the consumer the ability to demand a product. The merchant no longer
decided what would be on his shelves; the consumer did. As a consequence, stores
had to multiply available products and choices, necessarily becoming more
complex and varied in their offerings. “You have plenty of choices. Mine or
none.” was no longer acceptable in the retail world.
Many posts haven’t fully absorbed that lesson. The USPS has done so but
unfortunately the Congress has not. It has been traumatic for the postal systems to
learn. The lesson is that you have to listen to customers and give them what they
want, because if you do not your competitor will.
And the competitors are giving the posts real competition, as we all know. But
competition doing what? Remember what the shop-keepers did? They turned to
selling space and marketing capability. The posts who have figured this out
continue, of course, to carry letters, but they carry digital letters, also. They now
are no longer only carrying letters…..they focus on carrying messages and
managing messaging technology.
And this is a second lesson to us from this old shopkeeper. The shopkeepers who
survived finally figured out that they were not selling cans of corn, they were

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actually selling advertising, display and temporary storage space where the
manufacturers would give the consumer choices.
As regards the posts, consumers and businesses don’t want the post to carry letters,
they want them to carry messages – which need not be on paper for their entire
lives. The posts have to carry messages, in whatever form, and manage messaging
technology, although they needn’t manage all of it. That’s the digital change here.
Vince Cerf, one of the developers of the Internet, famously said, “If it can be
digital, it will be digital.” There is need for paper communication only if required
by law or the law of the consumer’s desire. My wife and I both insist on monthly
paper bills from the telephone and utility companies and banks.
And so the need for the Post to accommodate people who communicate in
writing, to send messages that involve a written record, will not go away. But if the
posts want to carry a substantial percentage of the messages people are indifferent
about being physical or digital, they must develop the capability to do so.
So, what is the prognosis of future volumes? What’s the status of
development of hybrid mail services?
Internationally there is both danger
and promise, as the data shows. This
projection of volumes among International
Post Corporation members shows that two
expert panels suggest there is still a healthy
business to be done delivering letters
across borders, although smaller. I think
these are probably over-pessimistic
because the panels did not account for
increases in the number of households,
which is certain to occur, and increasing wealth, which historically has meant more
mail. IPC says the physical mail volume globally is still 337 billion pieces per
year.
This graph from the Adrenale work for the UPU shows that international
mail volumes have fallen, but there is a base, and note down here that during that

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period direct mail volumes across borders
increased by 17%. Hybrid mail is an ideal
messaging medium for hybrid mail,
combining as it does the physical mail
piece and the ability to execute campaigns
in a manner highly targeted as to place and
time.
This graph is a more granular view
of the same data, and it shows the
deterioration in everything except direct
mail since 1998 – and again that alone is
an important distinction. I take comfort in
it because much of this cross-border
volume may well be e-commerce related –
new invoices, new offers, promotions,
catalogues. And, I believe that the growth
in e-commerce parcel delivery will be
accompanied by increasing mail volumes – new offers to these customers,
invoices, and catalogues.
Commercial direct mail volumes in the US, UK and other countries have
continued to be healthy and in some cases continue to increase year-on-year.
Why? Because it works.
Over the last year or so, Google
has done massive mailings of this
constructed piece in the US/Canada,
UK, Brazil and perhaps elsewhere. I
believe that in one month Google was
the USPS’s largest mailer.

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Finally, from the looks of this
Adrenale slide of cross-border volumes
of designated operators and other
operators, we see the posts may well
have been losing more to the competition
than to technology, but we do know that
both have suffered over the last 4 years.
And note the difference in letter mail, a
slight deterioration, and the important
growth in the lower left in the express
and parcel volumes. Much of that is probably e-commerce growing dramatically,
but, some portion of this traffic, the express mail traffic, would no doubt fit nicely
into a hybrid mail product.
We and the posts need to rethink
what is the purpose here – deliver
paper, or deliver messages. There is
going to be plenty of paper around
available to become digital! In 2010
there were 4.8 billion items! Take this
as a point of departure and let’s look at
a typical international mail example.
In the 21st
century the
conversation with the client we started with should continue along these lines:
“But wait,” says the modern post.
“We’ve got a better service for you
because we studied what you want and
applied contemporary technology and
customer-oriented international
relationship thinking to your shipment.”
Which is to say that a new era has
started. The digital era. The “dot.Post”

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era of digital communication and secure electronic international postal business.
The post now says, “Don’t print. Give us the files, data, addresses, names.
We’ll send it to Post B who will have it printed. Or, or you can use a licensed
vendor here to manage the files; they can also manage entry here if you wish. The
electronic transmission goes through our secure international system managed by
the UPU, called dot Post, to Post B or your vendor over there, as you wish. Before
printing, the Post or your vendor will apply the up-to-date change of address/gone-
away/deceased files to your data, correct the addresses, print, forward, or tell you
it’s a problem and deliver the rest. You can expect delivery in 24 hours if you get it
to us by 9AM . And, by the way, it’s cheaper than letters, and it is more
environmentally friendly. Each of the printed letters sent from here would create
20grams of carbon.”
Now, that’s the future. All we have to talk about is what is getting in the way
of it coming to be. Where are we in development?
Hybrid mail has had significant development in a number of countries. But,
interestingly, not where the mail volumes are the greatest, and not much in the
international realm, which in any case would be expected. Historically in the 90s
many posts experimented with hybrid mail and a few, such as Sweden, Denmark,
Italy, Portugal, Germany, and France have continued to provide services.
Something like 60% of all invoices in
Portugal are hybrid mail.
The UPU's recent excellent book
showing the results of their survey of the
electronic services offered by the posts
around the world gives us a picture, if
only a partial picture, of the
developmental situation with hybrid
mail.

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This table summarizes the responses
the UPU received to its questionnaire to
member posts on what electronic services
they offered. It’s an excellent work,
although of course dependent on its
members’ responding, which they do not
always do. It shows there is room for
growth.
Interestingly hybrid mail is pretty well-developed in certain developing
countries, such as in Africa, where it is used internally, often because road
transport is difficult. However, you will note that of the 93 countries responding
only 34 provide hybrid mail with physical delivery, and 20 provide electronic
delivery, or “reverse hybrid mail” and most of those 20 duplicate the list of the 34.
Do the customers insist on receiving paper, or is the technology not quite
affordable yet to justify reverse hybrid mail? Or, is it the posts’ mailers who insist
they want paper delivered? The Russian Post has a newspaper print product,
Cyberpress, for newspaper subscribers without Internet access. The vaunted
electronic mailbox, on which companies such as Zumbox pegged their fate, has
seen a relatively slow pickup, even in tech-savvy Switzerland.
So, the hybrid mail service of accepting physical messages and rendering
them into electronic form is the least widely developed. Of course it is also the
most expensive service to provide.
With respect to “international
hybrid mail”, the UPU indicates that
only 7% of developing countries, or 6
of 78, and 25% or 4 of 16 industrialized
countries have international service.
And here is the list of those countries which I was able to collect from the
UPU data, together with recent volumes. In many respects quite surprising. The

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data collected was for 2011, and if none
was reported yet, I have inserted “ND”
for “no data” and put in the 2010
volumes. Clearly, Italy is a major player
with a long tradition of hybrid mail, but
the volume amount is really quite small,
and the size of the volume reported by
Cyprus is quite noteworthy, as is that of
the US Postal Service, which I did not
know provided hybrid mail service.
So, to date, the digitalization of
international letter communication, has
not been met by the UPU system with
the attention it merits. No one knows
for sure how much there is, because
those numbers were only what passed
from post to post. but you can be sure
there most certainly will be more,
otherwise we wouldn’t have all these
companies offering the service or the
equipment central to providing it. A work group at the UPU struggled with this
subject for 4 years from 2004 to 2008 when some progress was made and work
stopped due to personnel changes. Much of the problem was discussion of
terminal dues and avoiding diversion of letter-based terminal dues to hybrid mail
terminal dues. However, the terminal dues system rests on the assumption that all
mail is still created and delivered in paper form by 19th Century bulk methods and
with 20th
century logistical costs, and assuming physical delivery work from a port
of entry that is as far across the country as possible from the delivery address. The
danger isn’t diversion to the new messaging medium, it is complete loss of mail
volume to hybrid mail which will remain completely outside the UPU system as
direct entry.
With the launch of dot Post, there is a secure, global environment for
deployment of tomorrow’s letter mail - faster, more secure, cheaper to manage,

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flexible, and environmentally friendly.
Dot Post and hybrid mail are perfect
together.
The UPU settlement system has not
adapted to the electronic delivery of
correspondence and other mail which can
be digitized or printed on paper anywhere
in the world, across any border, with the
push of a button. New compensation models, that is terminal dues, must be created
to account for these new messaging forms. And we need new standards,
regulations, and compensation models.
I think existing domestic hybrid mail volumes definitely show that users want to
use hybrid mail in the international environment, and to use the UPU system for
electronic messaging, which they currently can not do. The faster dispatch and
reply possibilities, and possible additional address correction and return services
create a very attractive proposition for mailers. But, these messages are now and
will continue to multiply outside the system unless the UPU acts soon. Customers
want this capability, they want to buy the corn from the supermarket that is the
Post, but they’ll go elsewhere if the Post doesn’t carry the product.
It is to carry forward the work of
bringing the hybrid mail choice into the
UPU system that the International
Hybrid Mail Coalition was formed.
We’d welcome new allies and you can
learn more about our work at booth
1125, the DDM booth, or by contacting
either myself or Enrico at the contact
points indicated here.
© Charles Prescott, 2012 www.hybrid-mail.org
http://hybrid‐mail.org/