Digital Business: IPC eBox Concept and Market …/media/documents/public/markets...• Draws on hybrid and message switch skills • Multimedia address management capability • Secure

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Digital Business:IPC eBox Concept and Market Developments

31 October 2010

1IPC eBox Concepts and Market Development, 31 October 2010

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1. Background to eBox

2. Business Idea- Personal Identity

3. Business Idea- Digital Street Address

4. Business Model and Market Development Personal Identity

5. Business Model and Market Development Digital Street Address

6. Summary

Content


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1. Background to eBox





6. Summary

Content


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The Postal Journey: Identifying and Meeting the Challenges

1990s

CostQuality

AutomationLabour Process Measure

2000

LiberalisationCompetitionCorporate

Models

Regulatory Alignment

Commercial OrientationMail Value

Chain

2010

Unstructured marketsSecuring the household channelDigitisation and pull media convergenceCRM & billing convergenceBuilding message and logistics systems for the emerging environment

Maintenance of last decade programmesIntegration of digital and physical offering and support convergence of processCustomisation with standard modulesRespond to pull, identity and media convergenceDefine new revenue generators

Principles for ServiceInnovation

Consumers Content - relevant to individual Control - what where when how Confidence - in security & identity Convenience - simplification of

transactions and interactions Confidential - information privacy

Businesses Managing multi-media Integration of CRM/ERP with

consumer messaging requirements

Targeting and individualisation Security of communications Cost and effectiveness


Leading posts have been successful in adapting to significant external change over the last decade. The core challenges have been related to driving productivity and profitability in liberalising low growth markets. The emerging environment is characterised by weak economies and significant changes in communication behaviours. Core business efficiency will be critical but not sufficient to maintain posts value and financial position. The latter will only be achieved by service diversification.

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Digital Services: Strategic Issues & Market Development

• Posts have deep challenges in their core mail markets• Traditional cash cow which has allowed diversification • Permanent erosion of transactional mail through electronic substitution – broken link to economic growth• Significant competition from other media in business communications – linked to economic growth• Digital marketing is growing significantly; increasingly being seen by a number of agencies as a cheaper and more

effective direct channel than traditional mail• Continued operational restructuring - necessary but not sufficient

• Model of continuous technology and labour process change can sustain ‘modest’ volume declines, provided a combination of price increase and productivity increase is achieved

• Incremental operating restructuring will not be sufficient to manage the changes presented by radical volume changes• Some posts have developed scenarios of mail volume loss of 70-80% in the next 15 years. In these cases, the postal

operating model must change, which could challenge the capacity to provide a universal service based on everyday delivery

• Service diversification in the Letters markets - current initiatives create low margin revenue diversification which does not meet the E2E threat

• Mail room services, document management and outsourcing• Print services - established hybrid and scanning• Data management and outsourcing

• Development of E2E services but business models and business case still unclear• Alternative media channels – competitive context• Need for clear differentiation of postal service offering:

• Clear value to both senders and receivers• Sufficiently compelling to change behaviours

• Concerns:• Acceleration in mail substitution, margins levels and sustainability, stranded infrastructure, ability to manage

changes to headcounts, labour contractual mix, conditions and work process, unclear consumer adoption pattern

5

How to develop digital services has returned to the heart of the postal strategic debate as there is an increasing realisation that a simple combination of operational restructuring and increased efficiencies does not meet the current challenges facing the industry

IPC eBox Concepts and Market Development, 31 October 2010

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© IPC, 2010 IPC eBox Concepts and Market Development, 31 October 2010

eBox Services and Channel Competition

7

Message Types &

Solutions

Primary Transactional Secondary Primary Marketing

Invoices/Statements Pay Info Loyalty Publicatio

nCoupons

Spam/Flyers

Geo-demo

ListBase

Permission Direct

MarketingCatalogue

RichDigital

Content

Physical Mail

Digital Street

E-box

EDI

Web Forms

Registered Accounts

EBPP Biller Direct

EBPP Consolidator

Direct Debit

E-Mail

Social Networking

Search & Banner Ads

SMS

SIM-based Mobile

E- Readers

Strong WeakMediumKey:

Physical mail is being challenged by a variety of alternate digital channels and mediawhich are at lower costs and offer a higher degree of interactivity.

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Transactional Communication Market Space & eBox Overview

E-Communications Market Practice B2B G2B G2C B2C P2P

EDI/XML Formats

Intranet/Extranet

Operational Systems

PIN/Password

Online Collaboration

Tools

Web Forms

Registered Online Accounts

EBPP

Direct Credit/Debit Transfer

E-Mail

Online Social Networking

SMS

SIM-based Mobile

eBoxtarget

Transactional communication patterns are changing from a sender-push model to multimedia-pull channels. Messaging needs are met via a variety of technologies, including eBox concepts, driven by processing, production & distribution cost savings.

Comment

Transactional documents are increasingly produced by back office ERP systems. Consequently the mail flow is highly automated, driven by fundamental changes in customer business processes. Changes in the B2B market are established, whilst in the B2C market they are now becoming stronger.

Businesses are seeking the lowest total transaction cost, while simultaneously improving transaction cycle times (e.g. E-billing discounts) and integrating messaging within CRM systems. The growth of the transpromo letter and hyperlinked invoice is testimony to this convergence.

Transactional communication is central to postal markets (statements, bills, invoices, contracts, commercial documents, government communication, pay slips notifications etc).

eBox concepts were developed for transactional communication markets, but increasingly the analytical capacity within these solutions is leading service providers to look at how eBox could be used to support permission based DM applications.


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eBox Market and Service Description


Description

Market Definition • Collection and distribution of messages in an E2E format between authenticated users. Can be utilised for all message types and creates the ability for the Post to offer a range of value- added services to both senders and receivers

Postal Services • eBox• Secure mail based on authenticated users, addressing format related to some form of personal

identity• Digital Street Address

• Secure mail but based around digitalising street addresses

Service Features • Authenticated users

• Secure identification process – possibly with certification

• Deliver messages in preferred format or multiple formats

• Draws on hybrid and message switch skills

• Multimedia address management capability

• Secure delivery

• Archive and search features

• Potential development of a range of value added services

• Personal management application service provider (ASPs)

• Government applications

• E-commerce

• Permission marketing

• Marketing data analytics

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Direct Marketing and eBox

IPC eBox Concepts and Market Development, 31 October 2010 10

eBox

eBox has been targeted at transactional mail rather than at the growing market of e-DM

Perception that ‘important mail’ will drive adoption

Transactional mail is seen as driver for acceptance however:

Process change reducing the frequency of transactional mail Alternate technologies also being developed eg:

biller direct sites , direct debit Hard to differentiate from bank led consolidator

EBPP sites Revenue upside difficult to define Transpromo mail

Direct Mail has not been seen as an early application for eBox applications and market development has been vey limited however recent developments include:

Integration of click through marketing links in transpromo electronic postal messages Development of concepts for permission data

bases to create marketing opportunity Digital Street Address solutions with significant

potential to create hyper local geographic advertising campaigns

There could be opportunity for posts to create a new digital channel for e-DM which is a significant growth market

Themes Electronic Direct Marketing

Market Growth

Direct Mail market - internet has won significant market share though the recession Trend expected to continue through the upturn as internet

based marketing metrics make it easier to evaluate campaign performance & ROI

Data Analytics

Continued emphasis on list data management, enhanced targeting & quality of contact, especially lifecycle, triggers & click stream Smaller contact groups with more focused segments based on

geo-demographic characteristics

Interactive Marketing

Transition from direct to interactive marketing Media now sell the moment & feedbackOnline interactions directly between empowered customers &

companies using Web 2.0 technologies & marketing approaches Permissions & privacy a key part of creating strong customer

relationships

Agency Role

Agencies are central to the growth of eDM - 50% now believe it is more effective than traditional DM Seeking media integration Potential critical intermediary/partner for market development Best practise is to work with customer expectations

(determine their preferences - products/media/time/device) Premium around opt-in & simplicity around opt-outWork on multiple devices/integrated channel campaigns

To date eBox services have not targeted e-DM opportunities however the rapid growth in digital marketing means that this is a market which should not be ignored and opens possibilities for different revenues streams.

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Emerging Communication Flows: Implications for Posts

• The letter as the universal and monopoly media for document communication has long since been broken.

• There are multiple media choices with different competitive advantages for delivering document and text combined with increasing access to multiple digital infrastructures, applications devices and experience.

• There are different competitive advantages of media for different mail, types communications flows and user segments

• While there is limited direct competition to postal authenticated eBox solutions, there is significant indirect competition from new communication practices and processes

• Posts challenge ….. develop sufficiently attractive and differentiated value proposition to

– Clearly identify which mail applications, flows and socio economic communities will use authenticated e-box services and create a sustainable commercial model

– Refocus business thinking to develop services which recognizes the influence of the “5 consumer Cs” of the New Economy as well as Sender requirements

– Convert mail-using segments to digital solutions– Convert existing digital adoptees to change processes from existing ‘new solutions’ to postal digital

solutions– Future proof the concepts against significant technology change

• Embedded security /authentication in existing applications• New digital paradigm of social media and smart phones


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Digital Business Core Business Development Challenges

• Business Rationale and Drivers• Digital migration will occur, acceleration of substitution arguments increasingly irrelevant• Market acceptance will occur given network penetration, increasing familiarity and active incentives from mailers• Success is not guaranteed but not innovating implicitly accepts major changes to posts’ value, scale and role

• Digital Market Assumptions• Mailers wanting to convert to digital, still require active support in mass B2C markets• Current developments (own portals) have led to market fragmentation and reduced mass adoption by consumers• Consumers will place sufficient value on trust, security, authentication, aggregation to switch to postal models

• Strategic Case• Integration of physical and electronic will be the new universal service platform• Posts retain intermediary/ facilitator role in communication and commerce• Posts can leverage trusted brand status and existing customer relations

• Financial Case• Defensive strategy: retain part of revenue which will be lost to digital migration (margins not revenue)• eBox solutions create a platform for generating new revenues around consumer applications and database management• Create the political space for potential re-definition of the USO enabling significant cost savings in the physical network

• Implementation Issues• Which eBox model?• Which mail flows, applications and user groups, marketing and sponsorship will drive behaviour change?• Transition management with successful conversion of physical mail and alternate digital solutions to eBox services• Sustainable commercial model pricing and service development map• Future proofing against technology shift


The digital delivery debate creates a range of strategic business development issues for organisations used to incremental innovation based on clear defined markets and investment calculations. Digital markets are still immature and uncertain.

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Digital to Digital Business Models

• eBox• Strong focus on authenticated electronic communication - rigorous identification and non repudiation• Focus is on the individual not a street address• Closed system of registered users• Focus on transactional messages and archive management• Network of identified users, strong potential to build new services on top of the network• This is the dominant model to date and there are multiple variations based on national interpretations

• Digital Street Address• System based on digitizing mail by creating a digital mirror of physical addresses • Closed system but users identified by relationship to physical address• New digital channel – differentiated from email• One option that may be worth exploring:

• Potential new revenue upside• Defensive product to accommodate transactional volumes as they switch to digital

• Potential entry into growing electronic direct marketing - new revenue streams based around click/ response pricing models

• Zumbox is currently the leading software solution based on these principles• Swiss Post Model

• Multiple services• Key difference is that the system is open and based around the provision of identity and security over existing internet

infrastructures• Scanning and electronic presentation of mail to preferred electronic location with range of actions by receiver:

from opening and scanning through to destroying and recycling• Initial, limited range of target segments but potential to expand service offer to other segments, long-

term link to wider integration of physical service offer and USO• Additional secure mail system - Inca Mail• Certification and security underpinning model

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Similar but different models are emerging, which have different implications and strengths and weaknesses.


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Digital Delivery Emerging Authenticated User Models

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Context eBox Digital Street Address

Receiver Identifiers

Initial Postal eBox initiatives are based on individualrather than location based identifiers

Location based identifiers

Channel Development

Current initiatives are based around an authenticated secure network and message logic and are location independent Archive key Receiver communication management tools will be a

growing feature, possibly subscription based and integrated into an Electronic Post Office Model

New digital distribution channel for content providers –specifically for location based content & multi-platform content. Sophisticated reporting tools

MessageManagementFor Senders

Simple interfaces to manage all file typesMessage switch to send to media channel Consumer media and possible marketing preferences

No need to have multimedia address database Posts manage digital street address Physical opt-out by receiver

Message Aggregation

For Receivers

Establish receiver value proposition: transactional mailaggregation, archiving and management Focus been on maintaining or defending positions in

transactional communicationsGrowing interest in direct marketing applications

Digital street address provides integrated archive and management tools for transactional mailAdditional non-transactional information, notably digital

marketing/DMMulti-media and rich content capabilities Potential to create new revenue streams

Network Effect

Limited network effect Attractiveness to major mailer is in direct relation to the

number of users of the system

Potentially strong impact on market as it offers the ability to be a one to many communication channel, where existing eBox solutions are limited by being point to point only channels Key is to develop receiver value propositions in partnership

with major senders or content providers in order to drive take-up

Two dominant models are emerging within the closed and authenticated user model. They emphasis different features which have different implications and strengths/weaknesses


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Overview of Postal Sector Initiatives: Key Themes

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Many posts are now developing services targeted at E2E/B2C flows. Market development hasbeen slow and a clear set of market behaviours has emerged. Expectation is that posts willcontinue to invest in eBox services.

Themes Comments

Service Development

Perceived as the critical play in the document substitution game Leverage trusted brand & customer contactsMeets sender need to manage multimedia message distribution & receiver need for aggregation & management

Postal Model Variations

Similar themes - sender integration to the Post Closed system of verified and authenticated users Registration based on both own authentication or acceptance of other identities Receiver authentication normally based on non physical address identifiers (e.g. social security number)

however development of digital street address alternatives Postal hub operating multimedia hub reflecting receiver’s message media preferences Receiver pull/opt-in philosophy supported by highly functional archive

Common Market Behaviours

Value proposition and service specification broadly similar: convenience ,aggregation, archive, security Pricing philosophy – sender pays (20-30% of letter price) - Deutsche Post radically different model Customer acquisition focus is on the major high volume transactional sendersMail markets lead with transactional mail, system functionality being developed for permission based marketing

mail

Market Development

Wide variation between markets - Denmark 800 core senders with 2M receivers (36% population) & Finland with 4% of population connected & 3,500 senders Key factor behind speed of market development: degree of Government sponsorship Key take-up factors: simplicity of connectivity, integration and registration as well as providing sufficient new

value to participants Level of active marketing by Posts- to an extent positioned as an infrastructure content with slow user adoption Businesses now operationally profitable - low volume, high margin operations

Future Postal Investment

Continued investment and experimentation in the market area Focus on increasing receiver functionality and services now recognised as the key value in market adoption Emergence of UPU dot.post could impact the market

Non-Postal Developments

Directly comparable services are very limited, but significant developments around the target functionality Competing developments tend to be software not service based


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Post eBox Services Status Comments

An Post Planning • Reviewing e-Citizen concepts

Australia Post

Canada Post Established

• Extended EBPP offer

• Online authentication

Correos

CTT Correios de Portugal Established

Cyprus Post

bPost Established• Services offered

within the Certipost business

Deutsche Post DHL Introduced

• Authenticated users• eBox model• Face to face

Hellenic Post ELTAIceland Post

Itella Established• Authenticated User• eBox model• Uses bank identity

Groupe La Poste Introducing • Digiposte service launching Fall 2010

Post eBoxServices Status Comments

Magyar Posta

New Zealand Post Planning • Exploring around the concept

of digital street address

Norway Post Planning

• Exploring authenticated closed systems based on multiple identification options

Österreichische Post Introduced• Acquisition-led• Initial focus around registered

mail

Poste Italiane Established

• Authenticated users• eBox model – Multi services• Face to Face

P & TLuxembourg Planning • Exploring around eBox

Posten Norden Established

• Authenticated user• eBox model• Uses bank identity

Royal Mail Group

• Exploring authenticated user model linked to digital letter box

Swiss Post Established • Suite of identity and secure

services

TNT Established• Electronic presentation to

receivers bank site for invoices only EBPP

USPS Planning • Reviewing digital street address concepts

Many IPC members have introduced eBox concepts. However while the concept of authenticated e-presentation of mail is broadly comparable, there are many variations in terms of the registration process, service positioning and technical platforms.

IPC Member Posts Current eBox Status

Indicated in pink are services offering only elements of eBox services


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1. Background to E-box





6. Summary

Content


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eBox Concept and Core Service Offer

Companies/Sender Post Consumer

All consumer mail sent to PostRouted by consumer preference to physical

or digital delivery Letter used as part of customer service

processes Letter has embedded functionalitiesStart of DM applications Functionality can be embedded into web

site to provide functionality

Lifetime address system linked (e.g. Social Security number) Integrated physical address Identifying mode & preference for deliveryElectronic deliveryPhysical delivery Feedback to senderData analyticsPrinting & envelopingService accessible via both web & mobileBasis for integration into range of wider

services

Multiple identification acceptancePostal authentication process & activation

rulesMailbox – control of sent content

(receive/reply etc)Address & delivery preference profilePotential extension to permissionsNotifications to various mediaArchive - 7 year searchable, sender neutralUpload secure vaultElectronic formsPayment through Internet bank

Perception of Opportunity Post Post Vision

Consumer moving to multimediaSpam MailUse of employer’s emailMail boxes inside web services are scattered &

fragmented, with security & privacy worries (no Trusted Third Party)User unfriendliness

Create digital mailinfrastructure

All ‘personal business’ mail to one digital mailbox (bills, bank account statements, salary slips, tax correspondence, health care related lab results etc)Pulled permission based direct mail Integration to various web services

Standard Integration Interfaces

Post

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The core eBox concept is for posts to provide a secure digital mailbox for consumers, ineffect a lifetime address system integrated into a range of multimedia services, to retaintheir integral market position in transactional communications.

Preference based Physical/Electronic Delivery


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eBox Senders Service Features and Value Proposition

Senders Service Features Senders Value Proposition

Technical FeaturesStandard interfaces avoid customisationSimple models for SMERecognise web is going mobileSupport multiple message formats Integrate with print languages and manage multi media output

Confidence Technical security and protocols Identification, authentication and security processPosts are committed to stay with the the investment and

infrastructure There will be active marketing to sign consumers into the systems

Business FeaturesPricing ModelSimplicity of technical integrationCustomer Support Integration with existing web presence complimentary not

competitive channel

Applications Transactional - pay slips are a good driverDM - not yet but potential transpromo with hyper-links taking off Forms - downloadable & online forms added value plus potential

hosting revenueAnalytics - receipt & read

(not used yet to any degree, but of interest to DM)

Ease transition and integration between digital and physical worldNo need to create and maintain digital databases No need to have multi-channel management

Enables totally digital outward sending process

Facilitates customer choiceConsumer preference with regard to media channelEnables sender to manage digital conversion reflecting

receivers’ preference

Creates simple platform for the development of electronic transpromo messages which can be integrated to CRM and ERP systems

Sender authentication process creates customer confidence

Enhanced business cycle times Integration to payment systems and methodsReduced cost method for enhanced communications

Potential to reduce investment in own solutions

Ability to integrate with own solutions

Facilitates compliance with environmental goals and ambitions

Potential enhanced DM customer targeting should permission system develop

Security – standard internet protocols norm

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The value to senders rests on the posts ability to deliver service features which reduce investment, enhance business cycle time, guarantee trust and security and facilitate consumer preferences based on a standard technical interface.


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eBox Receiver Service Features and Value Proposition

Receivers Service Features Receivers Value Proposition

Qualification Citizen >16, social security number, legal address

Registration Establish e-identity either through accepting existing identities

or creating face to face registration process Trade off between convenience/security

Delivery Preference Manage delivery preference to multiple addresses linked to

lifetime identifier (e.g. social security number) and deliver to either or secure mail box or e-banks

Archive Upload document store (7 years) Truly searchable & not restricted to PDF

Payment Facility Integrate to banks if possible (e.g. Finish barcode solution)

Send Capability Emerging in newer systems with contact databases

Value Added & New Services Ordering facilities using identity Integration to postal services combined with physical address Potential applications defined in mobile and pull models

Content - relevant to individual Receivers can chose the content they wish to receive digitally, as

the system develops this feature, the service can be integrated in permission marketing systems

Control - what where when how Receivers control which messages are sent in what format,

depending on senders requirements. System features can also enable integration to both sender direct sites and banking sites for payment

Enables a gradual shift to digital message management for consumers

Free for consumers - potential value- add applications being offered at a later day on an ASAP subscription basis

Confidence - in security & identity The authenticated system creates consumer confidence that the

probability of internet fraud will be reduced because of the rigour of sender authentication

Convenience - simplification of transactions and interactions Increased convenience through all messages coming to one

secure location with a single set of passwords and identitifiers Reduces the need for multiple login identities. Message aggregation and management is a key value proposition

Confidential - information privacy As posts consider permission marketing agenda this issue will

have to be handled very sensitively as mistakes could seriously impact the credibility of the value proposition

Concern Can be integrated to the green agenda

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eBoxes are developing as a closed mail system (no spam), with authenticated and registered users. Customer adoption is the critical success factor. The application needs to have sufficient new value to lead consumers to change established patterns of household management


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eBox Postal Value: Infrastructure and Commercial Management

Postal Infrastructure and Role Commercial Strategy

Authentication Process• Sender authentication process• Receiver authentication process

• Own except other identities• Compliance with e-Commerce legislation and regulation• Balance between rigour and acceptability

Technical Infrastructure• Sender interfaces• Simplicity of integration• Message switching and databases• Conformity to internet security standards• Conformity to payment internet standards

Service Features• Lifetime address system linked (e.g. Social Security number)• Integrated physical address• Identifying mode & preference for delivery• Electronic delivery• Physical delivery• Feedback to sender• Data analytics• Printing & enveloping• Service accessible via both web & mobile• Basis for integration into range of wider services

Stakeholders• Seek active government support• Seek cooperation with banks• Work to create single consolidator model in market• Cooperate not compete with existing web presence of major mailers

Sales and Marketing• Dedicated product managers & sales consultants• Brand awareness for consumer service is key• Advertising & transferability of brand• Differentiate from existing solutions• Co-promotion with key sending groups• Try to lever compulsion where possible

• (e.g. pay slips)• Government applications

Pricing• Sender typically pays around 30% of postage for e-message• E-Postbrief is the exception to this rule • Free to receiver but potential fees around archive services• Needs different models for DM applications

• Response based• Click though• Driven by analytics

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The development of the technical infrastructure is now not the most complex challenge. Developing a commercial strategy which creates a critical mass of active receivers, sponsorship from core stakeholders and a pricing model which monetize the infrastructure is the greater challenge


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eBox Future Potential Development Model

Secure and Multiple Level Verified Identity

Identity Verification eBox Features Interaction/Transaction Preferences & Permissions Community & Citizen

Provide secure e-identityCounter channelAccept e-bankUser identity will be

linked to physical location(s)Enables delivery of

servicesCross-sell

Secure MailboxSend/ReceiveSecure & registered Links to bill

presentation site-pull and scrape technology Links to e-banksNotifications to email &

mobileFinancial ServicesSearchable bill

management Long archive Financial management

toolsMicro-paymentsSecure Document MgtArchive/aggregateMail ManagementConfigure & retention of

secure mailE-VaultUpload long term

storage File Sharing ServiceProvide permission

based file sharing

Post Find post codes Find post offices Track parcelsReturns service

Ship onlineBuy postageChange addressWeb-based hybridCard servicesPostcardsMicro-payments

Customer service

Potential permissionenabled addresses & preferences arising from change of address

Incentivized opt–in services

Advertisers

Delivery PreferencesMedia LocationNotification

Marketing Preferences Time specifiedProduct based opt-inPull messages

PersonalizationRemember meCalendarsPreferences

Change of AddressPermissionsAdditional revenues

Local Government

Community InformationUser developed Local e-bayPaid/freeRelated to postcodeVoting

Access to GovernmentEnabling services Transactions based on

identitiesHosted forms

Shop at Home Local advertisingVouchersCouponsBanners Local yellow pagesE-commerce facilityPreferenceSearch/buy Deliver

22

Once established an eBox infrastructure could be developed to create more personalised consumer subscription ‘cloud services’. This personalised post office online portal enables management of household administration and e-commerce.


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6. Summary

Content


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Digital Street Address Overview

• The Digital Street Address is a different variant of an eBox concept.

• Digital Street Address has been a development concept for the last decade, centered on the notion that every physical address is mirrored by a digital version.

• Once an individual has ‘proven’ their relationship to a physical address, they can activate a secure digital mail box and subsequently indicate from which senders they wish to receive mail electronically.

• Stated advantages include retention of relationship to address, no requirement to change address databases for senders, enabling seamless transition between media, opening significant possibility for highly localized geo-demographic marketing supported by rich media content and response analytics.

• Most significant development to date is Zumbox - a software platform based on these principles and is operating in the United States. Their stated aim is to develop license agreements with postal operators worldwide.

• In addition to these developments, the UPU has been involved in developing ideas in this area.

• The following description of the Digital Street Address is based on the Zumbox design and development, reflecting that it is currently the most developed solution using this premise; however that is not to suggest that this is the only solution or development in the area.


© IPC, 2010

Digital Street Address: Core Value Drivers

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Digital Street Address (Zumbox) core value drivers are based around technical system features,which are generally intuitive and strong. The key issue is whether these features will beperceived as sufficiently compelling by the market to get senders & receivers to change existingbehaviours

Value Driver Comment

Technical

New digital channel using street address Print ready files All data formats supported Rich media content Integration into campaign tools Authenticated/registered network

The principles behind the technical design are strong andattractive

Sender

No change to core back-end processes No requirement to collect & manage multi media

address databases Changes in tandem with physical change of address Cost savings Print & distribution Ability to use media rich content & interactivity within

the context of a familiar medium Electronic documents, not emailGreen reduce paper & distribution costs

No change to back office systems - very strong incentive for adoption Turning physical databases into new digital channel - strong pointCost /green argument in transactional flow is strong with potential

to work alongside existing digital channel solution All major senders get value from encouraging one stop paperlessDM local targeting tools & media rich content - very strong from

senders perspective

Receiver

Mail recipient experience is a key factor Recipients see mail as envelopes on the screen Facsimile of the printed page Mail recipients can view their mail from anywhere, at

any time Control - decide paper or paperless, on a case-by-

case basis; block a mail sender Archive - organize mail into folders, search mail,

download mail to computer, print mail

Mirrors paper mailEasy authentication/registration - if robust enough then should

not be barrier to enrolmentRequires low technology competence by userValue to receivers will come if a significant proportion of major

senders enter the systemConcerns on balance between opt in/opt out control of the boxExplore opportunities to add receiver value The critical success factor will be defining a compelling receiver

value proposition in terms of transactional, media & offers functionality & the receiver management tools within them To date Zumbox is technology-led with little consumer insight into

service design or applications


© IPC, 2010

Transactional Mail Value Proposition

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The success of a transactional mail proposition is dependant on the value drivers in specificapplications being sufficiently strong that there is a compelling imperative to change currentbehaviours by both senders & receivers

Description and Comment

Value Proposition

• New channel for sending/receiving transactional communications• New eco-friendly channel to migrate key communications into meaningful interactions• Element of compulsion to drive take-up dependant on application e.g. requiring public sector employees to sign up by direct

pay slips

Sender Value

Drivers

• Ease of integration with existing back office & CRM processes• Data analytics and reporting on receiver actions• Rich content format options• Embedded interactive marketing opportunity within transactional communications• Bill presentation channel for direct payment customers• Can optimise existing contact address database of senders to defined post codes• Environmental credibility• Low cost channel to communicate with citizens – local democracy, consultative referenda and information applications• Integrated with back office for data processing

Receiver Value

Drivers

• Folder structure to organise administrative functions/household management• Archive tools to manage key documents – bills/policies etc• Clearly defined channel for receiving/interacting with Government or municipal authorities• Authenticated senders of trusted/sensitive communications and control over all sender communications• Simplicity over existing Direct Government web form model

Potential USP

• Passive push model – receiver does not have to be pro-active to access bills/statements• Eliminates need for multiple passwords as information sent out rather than retrieved on notification (pull model)• Security & privacy of eBox archive• Potential partners in registration/authentication process (e.g. Government agencies)• Co-promotions for driving take-up based on a key administrative function being linked to service

Revenue Streams

Sender pays model for transactional communications Receiver subscription for high volume data archive capacity Sender pays model for administrative/billing/tax communications


© IPC, 2010

Online Direct Marketing: Value Proposition

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The success of an online mail proposition is dependant on the value drivers in specific applications being sufficiently strong that there is a compelling imperative to change current behaviours by both senders and receivers

Description and Comment

Value Proposition

• New channel for sending/receiving direct marketing (customer acquisition) communications• New channel for sending/receiving information/offer (retention) communications – loyalty programs etc• New channel for media distribution – catalogues & brochures• Hyper- local geographic targeting• Segment specific• Analytics• Performance feedback loop creates platform for value based/return based pricing models

Sender Value

Drivers

• Ease of integration with existing back office & CRM processes• Data analytics & reporting on receiver actions• Rich content format options• Environmental credibility• Low cost channel to communicate with potential & existing customers

Receiver Value

Drivers

• Multiple folder structure – view marketing/media communications in specific folders• Clearly defined channel for receiving/interacting with preferred marketing communications• Authenticated senders of trusted/sensitive communications & control over all sender communications

Potential USP

• Opportunity for hyper-local business marketing communications

Revenue Streams

Cost per click/response action tiered model


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Opportunities for Posts in Digital Street Address

Strengths Opportunities

Feature rich platform that turns street addresses into a new digital channel within a closed system of authenticated users

Online document presentation replicates physical

Strong sender features which can be shaped into value propositions - print file agnostic, rich media content & integration with existing back end processes

Strong receiver features which can be shaped into a value propositions - folder structure, control functions & archive

Potential to create new communication flow around hyper-local geo-demographic marketing

Domestic service provider has strong autonomy to configure the system, service & business model

Likelihood that the business would operate at high gross margins as transaction cost per message is very low

To become the national provider of a new authenticated electronic document/mail exchange with strong early mover advantage

Brand stretch/diversification vehicle

Entry platform for electronic service augmentation

28

Digital Street Address models appears to be a potentially attractive platform, as an alternative model to existing solutions. Posts have to judge the local market opportunity and drivers.

Key Considerations

Core – Country Issues• Digital infrastructure• Consumer adoption behaviours• Address databases and change

procedures• Data confidentiality laws• Strength and trends in online marketing• Strength of mail-media intermediaries

Mail Senders• Incentives to adopt new systems• Current systems• Sponsoring launch consortium• Buy in by government/local government

Receivers• Consumer segments and incentives• Social groups and behaviours• Recruitment costs and maintenance

Commercial Attractiveness• New market• Net impact• Implementation complexity• Potential strategies:

• Do not compete in this space• Develop alternative models


© IPC, 2010




4. Business Model and Market Development – Personal Identity

5. Business Model and Market Development - Digital Street Address

6. Summary

Content


© IPC, 2010

Established Postal eBox Services - Personal Identity Based

Country Mail Applications Flows Comments

DenmarkE-boks

E- PosthuseteComOne

Transactional Legal documentsSignaturePayment

B2BG2BB2C

Joint owned with PBS (Banks)High market penetration around standards serviceService feature development in 2009 (archive services a key element)High level of government sponsorship

FinlandNetPosti

Transactional Legal documentsHyperlinkSignaturePayment

B2BG2BB2C

High penetration with key senders - growing consumer take up with focus on active conversion of key senders Limited government sponsorship & in competition with banks Focus is on establishing national mail delivery systemMultiple communication applications & formats will be developed but not current

focus, which is to leverage their hybrid position

SwedenEPostBox

Transactional Legal documentsDMPayment

B2BG2BB2CC2CC2B

High penetration with sendersConsumer penetration very limited Limited government sponsorship

CanadaEPM

ePPost

Transactional Legal documentsSignature/DPMPayment

B2BG2BB2C

Messaging service Penetration growing but limited active marketing Insufficient critical mass of active users - no hybrid base to leverage Limited government sponsorship & competition with banks & utility pay sites

critical aspect of market environmentPotentially will explore more active consumer pull features

ItaliaPostemail

PECPostacertificat@

Legal and certified mail and documentsSignature/EPCMPayment

C2C/C2BB2B/B2GC2G/G2C

Secure and certified mail systems First secure email launched in 2000 (Postemail) First certified email system launched in 2005 (PEC)High level of government sponsorship (Postacertificat@ launched in 2010)High degree of identification base on a face to face process

BelgiumCertipost

All mail typesPayment

B2BG2CG2B

Certipost is a full subsidiary of the bPostStrong growth with 500,000 private individuals & 50,000 business customers on

its platformOperation in The Netherlands & BelgiumPart of wider e-commerce communication service launched 2009 e-Contracting - a user-friendly solution for electronically signing, sending &

archiving contracts30

A number of posts have established consumer orientated digital to digital solutions


© IPC, 2010

Emerging & Developing Postal eBox Services

Country Mail Application Flows Comments

Switzerland All Mail B2B

G2BB2C

Swiss Post Box alternate model using scan and delivery model Inca Mail –secure mail system

PortugalVia CTT

Transactional Legal documentsSignaturePayment

B2BG2BB2C

High degree of linkage to electronic signature & Digital Post Mark following UPU modelStrong Government support

AustriaMeinbrief

Registered Mail B2BB2C

Austria Post acquired 40% of EBPP GmbH, a Raiffeisen Informatik subsidiaryPlans to offer postal online portal in 2010 Technology based on existing MeinBrief.at (Raiffeisen) service

Deutsche Post GroupE-Postbrief

All mail typesCertifiedPayment

B2BG2C

Programme started in 2009 as part of digital strategy Launched in summer 2010High degree of authentication at registration for both senders & receiversCore value is trust of mail (no junk, legal recognition, link to hybrid)

EstoniaeArvekeskus

e-Invoices C2GB2GG2G

e-Invoices for 500 public sector agencies The e-bills will be sent as registered mail (not as PDF email invoices, but via

the government's e-bill standard XML document format that can be integrated into the data processing software of each agency) Follows European trends starting movement into e-messaging

Norway Transactional Legal DocumentsSignaturePayment

B2BG2BB2C

Still in development Likely to leverage Norway Post trust services & Itella technology


© IPC, 2010

Posten Norden (Denmark) eComOne: Full Service Concept

eComOne

• The E-boks solution fits into a wider range of Danish Post services branded under the eComOne solution:-

• Offers business customers an end-2-end solution for handling electronic and physical communication

• eCommunication are combining • Mailswitch – solution design, document formatting/conversion, Mailswitch

• Electronic transmission (e.g. internet, VANS, email), print, scanning etc

• ePosthuset.dk – online consumer service

• e-Boks.dk – electronic online archive

• All companies –• from large enterprises to small companies• mailers eBusiness and web solutions

• Any kind of documents – BtC, BtB, BtG , BtE

• Partner strategy with interfaces to print operators, ERP and sector specific applications like salary, utilities, unions, insurance, pension funds.


© IPC, 2010

Case Study: Posten Norden (Denmark) E-Communication Solution

AP PENSION CUSTOMER

INVOICE

PRODUCT INFO

STATEMENT

eMAIL

AP PENSION CUSTOMER

MAIL BOX

eCOMMUNICATION MAILSWITCH

PRINT SERVICE PROVIDER

AP PENSION WEB

ePOSTHUSET USER PROFILE

SECURE eMAIL

eBOKS PRIVATDigital Process

MailProcess

Posten Norden’s E-Boks system in Denmark is representative of the postal Solutions in the e-communications space


© IPC, 2010

Case Study: Posten Norden (Denmark) E-Boks Service

Background Commercial Issues & Directions

Technology Environment 5.2M population with 3.2M internet bank users &

1.7M broadband subscribers Trend to digital slower than expected given access

Stakeholder EnvironmentKey stakeholder supportPerceived need for a consolidated solution for a

B2C flowBanks, government , largest mailers, municipalitiesHigh sender enrollment from the outsetSupportive government environment

Competitive EnvironmentNo direct competitionBanks& utility companies supported consolidated

solution from 2002 - joint owners of solution

Postal Strategic PositionWeak position in print document management

market drove partner strategy with interfaces to print operators, ERP & sector specific applications Integrated part of eComOne Strategy

eBox OrganisationEstablished in 2001 Joint venture among Post Denmark, KMD (ICT),

PBS (payments)Post Denmark established as the distribution

channel for e-BoksKMD sold shares to Post Denmark & PBS

Senders Market Penetration In 180 netbanks single sign-

onGovernment Ministries & all

98 MunicipalitiesPart of the electronic

payment infrastructure More than 400 B2C senders More than 200 B2B senders Target: government hosting

market

Receiver Market PenetrationMore than 2M usersSubstantial growth rate

FeesSender feesAnnual service fees Small fee per document (35-

45% of postage price)Receiver feesNo charge for e-Boks users

– enrolment or useUpload function for own

digital information – 100 MB €12 & 1GB €80

DriversConsortiumStakeholder consensus and active sponsorship

from banks & governmentPartnership to drive integration

System FeaturesPDF document formats are limited later system

using multiple formats

Commercial IssuesActive cooperation with senders to drive adoption

has been importantSustainability of pricing model over the medium

term - is transaction pricing best way to optimise value?Highly targeted around management of

transactional documents - how to move to DM & transpromo developments?

Market BarriersB2C MarketUrgency to push electronic solutions compared to

print/mail optimization Lack of consistent (& successful) e-strategies

within companiesROI for SME is still too smallB2B MarketDocuments standards are still emergingOutput management is low priorityStill complex to handle documents E2E


© IPC, 2010

Case Study: Posten Norden (Denmark) E-Boks Service Overview

Companies/Sender Denmark Post Consumer

MailswitchSolution designDocument formatting & transmission

eCommunication Interfaces between mail stream digital mail

& mailers’ business & web solutions

Process File transferred to Denmark Post eCommunication switch matched to

receiver preferenceMail then dispatched in required format

New ServiceNew SMS secure digital service for public

authorities to communicate to citizens

Value PropositionEnables switch to total digital environment

in company Integration into business systemsCost savings on mail & internal processing

SystemCreated closed system for permission

based messages between registered users & registered senders Interface & integration to banks has been

key in establishing service as both a messaging and payment solutionUser authentication has been based on

already accepted banking identities. This has multiple advantages including market acceptanceMail box and archive based around social

security identificationDedicated sales & active promotion

TechnologyHave built system using standard

interfaces to senders & standard internet based security protocols

DevelopmentE- Boks - being integrated into wider

service concept of eComOne StrategyMailswitch - document formatting/

conversion, electronic transmission (e.g. internet, VANS, email), print, scanning etc ePosthuset.dk – online consumer service e-Boks.dk – electronic online archNew ServicesE-forms hostingE-Invoice services

QualificationCitizen/resident with legal address/social

securityRegistration/Log-onUse bank identities which ensures high

authentication & high functionality with payment process

ActivationUser subscription to documents for e-Boks

delivery – opt in model (permission) through Posthuset

NotificationMail arrival notify by email/SMSMailboxUsers mail viewed in standard browser at

www.e-Boks.dk in PDF-formatArchieveA lifelong, personal electronic document

archive based on social security number or company tax file number Upload function for storage of own digital

information birth/marriage certificatesValue PropositionChose delivery preferenceSecurity/ease of log-onPermission to accept messages

electronically - advantage to future DM applicationArchive of transactions & upload own

documents Integration to payments infrastructure


© IPC, 2010

Receivers

Consumers

Letter data from senders to print

operator

Print operator identifies the receiver from address or

equal data & converts letters to NetPosti electronic letter

format

Electronic letters to receivers’ NetPosti account.

Letter notification to receiver’s email

NetPosti integrates to web portal services

AuthenticationReading & archiving the

letter

Senders NetPostiPrint Operator

Case Study: Itella Corporation NetPosti’s Operational ModelFinland Post has been in the market since 2002 with variations of the concept, leveragingtheir strong position in document management and the extensive penetration of e-banking.Opportunity to expand value to customers with strong growth in last year


© IPC, 2010

Case Study: Itella Corporation NetPosti Service


Technology Environment Leader in movement to digital society 85% internet penetrationBroadband target 100% by 2015 110% mobile & 89-90% e-banking

Stakeholder EnvironmentGovernment passive supportNo coordinated adoption across

Government, as sender or co-promoter Legal framework still not in place

Competitive EnvironmentBanks developed own e-invoicing solutionEstablishing market price levelNo integration with net banks - cost/ political

issueUtilities own EBPP sites

Postal Strategic PositionVery strong position in document

management outsourcing - c20% of turnoverVital if post is to stay relevant in B2C

document managementBuild infrastructure of connectivity

eBox OrganisationNetti Post established as independent entity Leverages normal sales & CRM channels

Sender Market Penetration 3,500 connected Focus now on quality of sendersSeeking to integrate biggest utilities &

banks- need top 10 sendersOver 1,000 public service forms

Sender Fees & Charges Integration service fees to partnersCharges per message around 30%-50% of

mail pricePricing model is highly influenced by bank

charging model for e-invoices

Receiver Market PenetrationStrong growth - 300,000 users in 2010Expectation to follow e-bank diffusion curve Limited active marketing 2.1M messages sent per yearNo receiver charges

Observations & Learning Technical integrator partners & simple

interfaces have allowed quick diffusion to SME senders Limited marketing effort Less than 50% brand awarenessPragmatic attitude

Robust technical system with lean operating environmentAbility to handle documents in non PDF

form is an advantage, as is enabling expansion of service to other applications through the use embedded hyperlinks Technical innovation, however no

commercial model for Itella

Strategically, Itella have taken an infrastructure building attitude to the serviceEnsure quality of technical platformCreate capability and wait for the market to

moveNeutral between electronic & physical

delivery

Sales & marketing has not been as strong as technical platform partly because of neutral positionNo significant co-promotion with senders to

drive incentivises/consumer adoption

Highlights the importance of government sponsorship - all other country product managers point to the success in Denmark in building government support


© IPC, 2010

Case Study: Itella Corporation NetPosti Service Overview

Companies/Sender Finland Post Consumer

Features Cost efficient mail delivery to consumers in a

secure & reliable way Company sends file to Itella Identifying mode of delivery Electronic and/or physical Feedback to sender Printing & enveloping Main focus: transactional mail New applications Letter integration to customer service processes

& sales - embedded functionalities to web customer services Senders’ hyperlinks activate receivers to web

services Publication subscription

Net Posti can be merged into company web site as electronic infrastructure for mail

Value to Business/Government Single system for physical electronic sender - no

need to keep multiple address formats Integration from generating print file & application Cost savings Ease of integration

System Features Closed - only registered senders/receivers Registration - users identified within the system

using either corporate or social security number(creates an effective lifetime addressing identifier in the system) An electronic letter is delivered to NetPosti if the

name & address in the letter correspond to a name & address submitted to NetPosti

Integration Key senders, ERP & web sites are integrated Itella provides standard interfaces - work

undertaken by partner system integrator firmsSecurity Encrypted SSL data transmission & connections

- comparable to online bank All material sent to NetPosti is managed in

compliance with postal, letter & banking securityguidelines The system has limited access (firewall,

usernames etc), limited & controlled access rights (maintenance, operators etc), up to date & physically protected SW & HW

Presentation Documents presented electronically in the same

formats as in physical mail so look and feel remain the same

Mobile One web interface, no specific mobile client Current mobile version is light and can only be

accessed with Itella identificationValue to Post The core of postal business is B2B/B2C flows No guarantee of retaining control in the digital

world so eBox & related digital infrastructure is the core to winning or losing substitution game

Qualification Age 15 with Finnish social security numberRegistration/Log-on Register online bank user ID or a chip ID card

issued by the Population Register Centre, or a Posti username

Notification Mail delivered to box notification to email

account or by SMSMailbox View mail in web browser Identifies preference for physical/electronic Payment functionality only integrated with one

bank but simple copy/paste barcode solution has been created 1000 Forms-100 online completeArchieve Six years free of charge – high degree of store

& search function Content/supplier independent changeValue Proposition Convenience/ease of registration Reduction of mailboxes/consolidation - not a

replacement to email Positioned as a compliment to net bank & email

as a personal administrative not payment system Archive & analysis of archieve material Green Security integrated process from the data file


© IPC, 2010

Case Study: Posten Norden (Sweden) eBox Service


Technology EnvironmentBroadband and internet penetration similar

to Denmark & Finland Internet banking penetration 80%Consistent gradual move to e-enabled

government services: e-tax forms etc

Stakeholder EnvironmentNo explicit support from governmentBanks & utilities have own solutionCooperation now with banks on accepting

identities & payment integration

Competitive EnvironmentCompetition with utility own services & e-

banking solutionsDelivery of invoices directly into e-bank web

sites is biggest single competition, however banks are showing no desire to accept any messaging which is not payment related

Postal Strategic PositionEarly developer of electronic servicesMajor asset is that most major mailers &

invoicers already use Sweden Post as their print provider

eBox OrganisationOwn operation Low priorityNo dedicated sales force

Market Penetration The 200 major mailers, the majority of

whom are print customers of the Post, are now connectedNo co-promotion to drive users numbersCost savings to end users do not appear to

incentivise them to try to drive take-upNo specific support from Government (e.g.

with public sector employees) 180,000 receivers are now registered out of

a population of 9MNo consumer charges unless added

storage capacity is boughtAbout 50-60% are active boxes

FeesSenders pay per message at the rate of 20-

30% of the stamp price at around SKR 1.50-2.00

PerceptionsMajor constraint is the lack of market

awarenessBuild brand values & to differentiate from

current email & e-banking optionsCore issue is the cost of customer

acquisition & the subsequent cost of active retention

System Functionality (High) This has not been the constraint on market

development although practical enrollment problematic

Market Penetration (Low) Insufficient value against other alternativesCommitment to the receiver pull philosophy

Development Increase cooperation with the banksDevelopment of iPhone applicationsGovernment form hosting capability &

embed functionality into web sitesDevelop goods ordering facility from mail

box using the identity & payment facilitySeek to exploit system capacity to handle

all message types to increase mail volumes Seek to develop DM concepts, but work

within a loose permission framework so as not to damage the integrity of the ‘important mail’ conceptSell space around boxes & registrationElectronic transpromo & hyperlinksSome market movement, but not significantAnalytical capacity for read receipt will be

more useful for market communication


© IPC, 2010

Case Study: Posten Norden (Sweden) eBox Service Overview

Companies/Sender Sweden Post Consumer

Standard connections & interfacesSend whole invoice file to Post who

manage document outputs 83% to print 15% to e-bank 2-3% to eboxNotification & receipt read can be

sent to sender, but not a requested service Time stamping &transaction log if

requiredNon e- delivery are printed &

mailedSystem can handle all formats of

message - does not need to be in PDF which is opening possibility for wider applications, particularly DM using wider graphics & images, but system integrity will require them to be permission messages

SystemCreate environment & infrastructureManage registered identities Identifying mode and delivery

preference of registered consumersProvide email box to receivers based

around social security numbersMange multi-media address

databaseManage print fileSend message in required format

TechnologyMessage distribution business-

secure encryptedStream serve supplier of hub

software for multimedia sorting, transaction billing & optimizationStandard interconnectionsStandard interfaces & protocols to

create internet security

CommercialService developmentSales & MarketingEnsure system integrityRegistrationPermissionConvenience by aggregation and

analysis

QualificationPrivate persons over 18 years Swedish personal ID number and a legal Swedish address

RegistrationOnline registration Face to Face authorisationOpportunity with national defacto standard bank identities

Log-onUsername & password

MailboxSimilar address structure to normal emailAddress based on life time address, not street addressDocument are not stored in PDF format to enhance

searchablity in archiveMailbox feel is comparable to normal emailCan send out to registered users in systemNotification alerts to other mailboxes & mobile phones Integrated payment functionality if using web bank identity ePostsigill electronic signature ePostbox personal address book contact informationSystem address database

ArchiveStorage 18 months, same as banks Independent of suppliersNo messages more than 5MB can be stored unless

additional fee is paidStorage can be extended for increased fee


© IPC, 2010

Case Study: Canada Post eBox Service


Technology EnvironmentSlower movement to broadband/e-society than Nordic

markets

Stakeholder Environment The provincial system of Government means that it is

difficult for there to be strong federal leads in supporting e- initiatives

Competitive EnvironmentCPC original plan was to provide a standalone

consolidator type eBill presentment & payment serviceAt the same time a competitor launched an eBill pay

consolidator service in partnership with banksAfter >5 years the market was split & neither service

was breaking evenCompetitor was acquired by ePost & now there is no

‘consolidator’ competitionHowever, the direct bill option has been taken up by

telcos & gas utilities etc and is a strong competitive feature of the marketDelivery by CPC to a bank system is a feature of the

marketPostal Strategic PositionEarly innovator but not consistent Limited positionNo role in hybrideBox OrganisationStandalone serviceBreaks even

ePost Today c2M registered It has nearly all (c100) of the national &

regional mailers connected Available to consumers to request eBills

The ePost challenge is three fold:-

How to increase the bill delivery density per user?- Only a small percentage of registered users are active

How to lower the cost of connecting mailers to ePost?- Mid size & smaller mailers resistanceat set up cost for ePost

How to price the service?- Mailers are charged c7 cents less than physical delivery (seen as expensive for an email by many businesses)- Insufficient pricing difference to incentivise behaviour- The consumer is not charged to receive the bill as insufficient value from subscription

Current Direction UnclearDebate around three views:Good concept that needs marketingNarrow vertical with limited

opportunityNeeds restructuring to consumer

model

Good Concept Needs Marketing ePost has experienced double digit

growth consistently each year without any significant promotion Increase effective promotion to get

more users & density

Narrow Vertical Limited OpportunityMost users view ePost delivered bills

at their banks sitesBanks are not interested in seeing

anything other than bills delivered through their sites ePost right now has limited

ePresentment opportunity unless it moves to another model which is more consumer orientated

Restructuring to Consumer ModelBusiness idea possibly be

restructured to create a pull-based consumer portal


© IPC, 2010

Case Study: Canada Post eBox Service Overview

Companies/Sender Canada Post Consumer

All major senders of bills are now in the service - 200 national /regional utilities & municipalities

The service is provided by and integrated into all the major banks & credit unions so that ePost pages can be viewed in the web bank

The service is branded under various names

Interfaces to the service are not standard & both a fee & system integration is required

This is proving a significant barrier to entry to win smaller billers & mailers

Service supports the building in hyperlinks into the invoices to direct to special offers & promotions targeted DM

Mailers’ call center agents also get on-demand view of ebills sent through ePost to help with customer service /billing enquiries

SystemEssentially an EBPP system rather

than a message systemCreates commercial & technical

infrastructureManages registered identities, creates

digital delivery but not media choice solution

Technology 128 bit SSL encryptionEPM put on every mail pieceClear public privacy policy and user

information is not shared Firewalls, virus protection etcBrowser support & requirements –

Internet Explorer 6, 7, 8; Firefox 3+; Safari 4+PDF reader required

CommercialService developmentSales & marketingEnsure system integrityRegistrationPermissionConvenience by aggregation &

analysis

QualificationCanadian resident

RegistrationSign in using address & email Lower level of user authentication than other

models. However, given that account information is required to sign up a mailer there is a later process

Log-onPassword system of logons Individual mailers are then added with the receiver

giving permission to each service provider Existing account information is used as

authentication point

Notification ePost sends notification to standard mail box

Mailbox Future bills will come through the ePost system Login to ePost mailbox & view billsCan be routed through to internet bank

Archive 7 year archive- can put in management routines

Service DevelopmentUnder review

Value PropositionEasy, convenient, secure environment, free


© IPC, 2010

Overview Poste Italiane: eBox Developments

Postemail Posta Electronic Certificata Postacertificat@

BusinessIdea

• Secure electronic mail service with strong link to Bancoposta accounts

• Online secure and certified mail system with legal status

• Online secure and certified mail system for legal communication between citizens and Government

Service Features

• Require registration at www.poste.it

• SMS activation code

• Free service• Send and receive documents

securely (anti-viral and anti-spam systems provided)

• Receive notification of online transactions in secure and certified way – using EPCM

• Receive promotional and advertising mail from Bancoposta

• Archiving facilities

• Multiple consumer based hybrid mail services

• The service is regulated by the Government which has:

• defined technical norms and functionalities of the service

• identified and disciplined providers of the service

• defined entities and companies that have legal obligations to use the service

• No standard identification process defines for PEC providers.

• Legal value and certification of messages guaranteed between PEC users only.

• Closed communication channel between citizens and State.

• Targeted at all citizens over 18 and is a digital identity based on a stringent face to face registration process

• Log-on to portal with personal and verifiable data

• Receive acknowledgement• Finalise activation with face to face

registration• Service

• Communication with the State• Mailbox and archive• Integration with hybrid mail

services• Directory of public agencies e-

addresses• Digital signature• Multichannel notification• eGovernment services (in

development)

Commercial • Free service • Legal obligation for companies and public agencies to use the service for electronic B2G,G2G and G2B communication.

• Pricing up to €48 per year

• Service is supplied to the Ministry of Public Administration and Innovation

Poste Italiane have developed a multi-product approach launching a range of secure and certified mail services with varying degree of authentication.


http://www.poste.it/�

© IPC, 2010

eBox Service Data: Market Penetration to date

Metric Denmark Finland Sweden Canada

Population 5.5M 5.4M 9.2M 34M

# Households 2.1M 2M 3.5M 13M

Broadband Penetration 99% 85% 90% 58%

E-bankingPenetration 88% 80% 80% 35%

# Major Senders 600 3,500 200 100

# Registered Receivers 2M 300.000 180,000 2M

ReceiverPenetration 36% 5% 2% 6%

Service Launch Date 2001 2002 2006 2002

GovernmentSupport Strong Weak Weak Weak

The Nordic eBox services are growing strongly, whilst in Canada the service is more akin to anEBPP solution. Low household penetration of eBox services in Finland & Sweden is a function ofexplicitly passive marketing to mitigate substitution.


© IPC, 2010

Swiss Post Digital Innovation


Swiss Post have a wide range of digital identity and messaging services based around the Swiss Sign subsidiary and concept. Notably unlike the majority of posts it is explicitly built on the belief that the posts cannot created a closed authenticated user service and that the posts need to provide authentication and security over open public systems

© IPC, 2010

Overview Swiss Post: eBox Developments

Inca Mail Swiss Post Box

BusinessIdea

• IncaMail is the secure messaging platform of Swiss Post, offering both high security and ease of use, integrated into existing mail environment

• Targeted at both individuals and corporates

• Based on Earth Class Mail license.• Scanning and electronic delivery of physical mail• Currently targeted at mobile workforce• Ambition to extend service to other segments, could be

instrumental in future USO discussions and has potential to move to digital street address concept

• Should significant scanned mail volumes be achieved , database of receiver behaviour is created which would enable the development of new service features

Service Features

• The sender sends message via a web application, e-mail client or business software. The message is transmitted over an encrypted connection to the IncaMail server

• The recipient receives an e-mail message that includes a pickup link

• The recipient can pick up the message using the link via a secure connection to a web application. If the recipient has integrated IncaMail into his e-mail client or business software, the e-mail is automatically delivered over a secure connection

• The sender receives confirmation that the message was picked up

• Legal status for VAT confidential secure etc• Can be integrated with both certificate and signing services

• Consumers register as Swiss Post Box customers

• Notify mailers of new correspondence address

• Mail scanned by Swiss Post

• Image of envelope sent by email

• Receiver can choose variety of options• Scan content• Ship unopened envelope• Destroy• Recycle/Store /Archive

Commercial• Pricing dependent on use, individual mail 0.75 CHF• Corporate rates based on subscription• Market penetration rates are not available

• Pricing dependent on volumes and service based on setup charge, monthly subscription and activity user charges

• Publically available price lists• Critical success factors leveraging physical/digital bridge

low operating cost credible value added• Market penetration rates are not available

The eBox solutions are based on a secure email service and a physical to digital service. The service is built on existing networks and has the ambition to increase the scope of the service with mail centre based scanning integrated to management of multiple address databases. It is indicative of a different E2E innovation paradigm


© IPC, 2010

Overview CTT Correios de Portugal: VIA ctt

Concept User Sender Operations

• Established 2006

• Secure digital document service allowing mail receipt, payment and archiving.

• Values• Identification• Security• Confidentiality• Integrity

• Public service supported by law

• Legal framework for document procedures established.

• Government agencies supporting the system

• Closed system• Reciever address only

known to CTT.• Not email

• Core targets: banks,utilities, government

• Sender pay model• Service contract• Volume fee

• Subscription to service via web based registration and service model.

• Free to user - no facility to upload information

• Documents presented normally in thick PDF format but development work underway to accept other formats

• Payment functionality: for one-off and regular payments

• New mail alerts given by both email and SMS

• Ability to print documents from site

• 10 year free archive

• CTT receives file and manages delivery to users’ preference choice

• Documents can be stored either centrally or locally

• Documents can be given digital certificates, encompassing all features of time stamping and non repudiation etc

• Data transfer under secure protocols

• Message management• Immediate delivery• Receipt of delivery

acknowledgement

• Registration• Users web based

using tax identity

• Senders as part of service contract and integration process

• Platform• E Docs• Siebel/Oracle

• Secured communication pipes• sFTP protocols


© IPC, 2010

Overview Deutsche Post Group: ePostBrief

Postal E-Strategy E-Post Box

• Commitment to building e-services across all divisions

• Strong position in up-steam document management, recently consolidated by Williams Lea acquisition

• Continued commitment to operational productivity and expansion of the E3 strategy

Direct Marketing• Providing marketing solutions using

digital channels and cross-media target groups

• Precise identification of target group, mail/electronic mix, solutions for SME

Transactional Communication• Electronic services (archiving, mail,

secure identity, etc).• Hybrid delivery options

E-Commerce• Shipping software integrated into e-

commerce platforms

Service Concept Service Features Commercial Model

• Authenticated closed mail system

• Authenticatedsenders and receivers, only mailers registered within the system can send mail

• Security and encryption within the system

• Digital mail has the same status as physical mail and is legally recognised

• Rigorous authentication model

• Log in with details to claim address and service

• Service activation following face to face post office counters based authentication using a combination of national identity card and/or residency certificates

• In effect an authenticated certificate electronic identity process

• Service features• Identity • Secure Mail• No spam• Archive• Secure log–in• Chose delivery preference

• Future development of permission marketing features possible

• Naming convention based on given name and numbers

• Target transactional mail

• Business plan is based on transactional volumes

• Pricing to be the same as physical mail, price justified on the basis of legal status and convenience

• Future ambition that certificate will be the acceptable identity to Government services

• Aggressive launch strategy

• SAP• Major mailers• Heavy marketing

programme.• Suggestion 250,000

enquires in the first month

In July 2010, Deutsche Post launched e-Postbrief, a closed, authenticated mail system. Its features are comparable to the existing Nordic models but with very innovative pricing model where same price structures apply to digital and physical messages. If successful this would be significant in terms of revenue erosion debate.


© IPC, 2010

Summary: eBox Trends

• eBox-type solutions are likely to be an area of significant experimentation over the next decade:– Led by Nordic countries and Canada– Expansion into central Europe in the last year– Global interest included China, Morocco– Most posts believe there is no guarantee of success but see it as a principle way of continuing to provide value in the B2C

market• Initial driver has been to provide service for transactional mail and storage.• Increasing interest in DM applications(targeting capabilities and response analytics) as well as integration with digital coupons.

These may be a more effective ways of driving consumer adoption and the development of active/ regular user behaviour patterns. Renewed focus on permission marketing models.

• There are two broad models emerging:Sender Push

– This is the dominant model and is the basis for most experiments in the market. Technology solutions have common characteristics, closed systems, user authentication protocols,, highlight storage facility, not an email system.

– Critical preconditions for these models appear to be:• Access to print file to enable choice of electronic or physical delivery• Cooperation with internet banks to enable payment capabilities and creation of alternative method of identification• At a minimum passive government support is required to create a new infrastructure• No corporate concern with regard to acceleration of substitution as this would inhibit market orientated innovation• Sender-pays model

– Margins are attractive– Concerns with regard to sustainability of prices– Common interest in creating sufficient consumer value in order to introduce subscription charge

– No model as yet showing major financial returns. Key concern regarding the ability of posts to offer significant value over and above the utility own e-presentation site or /e-bank model or conventional bill payment process

Pull Model– Only at conceptual stage; based on the idea of creating bundled value for consumers, who would have the ability to pull

messages. There would need to be sufficient value to justify monthly subscription charges as part of multi-revenue stream business model.


© IPC, 2010




4. Business Model and Market Development - Personal Identity


6. Summary

Content


© IPC, 2010

Introduction: Digital Street Address

• In the last year, there have been developments related to creating electronic services based on a Digital Street Address. Market develoopments to date have been less extensive than with eBox concepts

• Digital Street Address has also been under development as a concept within the UPU dot post .

• During the course of this work it has become apparent that a number of posts have become interested in exploring building services around the concept of Digital Street Address

– Canada Post– New Zealand– USPS– Royal Mail Group

• Zumbox Software platform is described as an example of the Digital Street Address Box concept.


© IPC, 2010

Zumbox Overview: Key Themes

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Digital Street Address is emerging as an alternate paradigm to eBox which could be operatedeither by a postal company or a competitor. The most advanced software solution in this area isZumbox which has created a new media platform at its early stage of development. This sectionreview the features and potential of Zumbox as an example of this type of service

Themes Comments

Start-Up Company

Zumbox is in its infancy, establishing the service and defining a market position in the US The design features and commercial propositions have yet to be significantly tested/proven in the marketMinimal market penetration - flagship partners established Active marketing since Autumn 2009 - pilot launch in Chicago in June 2010

Platform Features

The strengths of the solution have generated significant early interest The system functionality creates significant attraction for DM senders, hyper-local targeting and analytics Needs to be carefully rolled out to retain receiver value - recognise opt-in requirements/value Platform will need customisation by country, dependant on local market features and customer propositions

Functionality

Appears highly intuitive to use from both sender & receiver perspectives, with distinctive folder structure Strong message creation, targeted distribution, data analytics & reporting tools for senders, coupled with useful

receiver permission and archive controls Core value drivers based on reliability, privacy and security, but also enable SMEs to access direct marketing

options at affordable cost with precise measurements Potential receiver acceptance on privacy issues Strength of user verification/authentication process is key to establishing credibility of the service

Value Proposition Definition

A private and secure web page for every postal address, which registered users can access to view mail or upload and distribute content - targeting B2C & B2B flows - bulk senders Enables controlled communication with unknown receivers Potential to minimise spam and enable items normally sent as physical mail to be sent as rich digital content

message within a closed system that is tied to physical addresses. This offers greater reliability and stronger verification than email Identifying recipient value is key to driving take-up as this is a network effect platform that requires a critical

mass of registered users who need to be convinced to change existing embedded practices


© IPC, 2010

Zumbox: Core Service Attributes

Feature Description

PhysicalAddress

Identifiers

Every physical address is mirrored with a Zumbox, using the same national addressing standards as the electronic point of delivery reference In the US, logically, possible addresses defined by Zip4 databases Address authenticity checked via Address Doctor for confidence about accuracyNot an individual lifetime address, but specific to length of time at a given address

ZumboxMessagingPlatform

Core principle is that system mirrors paper mail process from induction, integration to back end and delivery, but with enhanced functionality in the message

Developer API Partner

Program

Zumbox API Partner Program (ZAPP)Enables developers to automate the process of delivering content by integrating applications & business

workflow with ZumboxEnables senders to introduce rich features into contentFacilitates development of applications that enhance the utility & value of Zumbox platform


© IPC, 2010

Zumbox: Sender and Receiver Attributes

Feature Sender Attributes

Registered User

Document Messaging

Service

Receive mail only from registered Zumbox addressesUsers register online at their Zumbox street address to be able to receive Zumbox mailRecipients only receive messages from registered users or bulk sendersMessages have to be in an uploaded document – consequently this requires preparation & content valueMail in non-activated accounts is deleted after 3 months – easily customised

Message Formats

Statements/bills/policy renewal information is sent electronically to Zumbox in a format that replicates physical statement (with ability to include rich digital content)System is configured to push mail so that all mail which is sent physically is also sent to Zumbox

Receiver Controls

Receiver has control over mail through opt-out buttons (e.g. can block certain mailers, move others to paperless only) In activated accounts, receivers control archive features - facility to archive key household data securely online

Receiver Attributes

Restricted Messaging

Service

Zumbox registers interested businesses, charities & government organisationsRegistration process verifies identity of organisation & physical locationRegistered users able to send limited amount of Zumbox mail Individuals/households/SMEs currently able to send 50 free messages/documents per month (e.g. 50 messages to 1

address or 1 message to 50 addresses)Subsequent mail charged on pre-payment basis via PayPal

Message Formats

Zumbox mailing interface enables registered sender organisations to use same data sources as current physical mailing (e.g. Word, Adobe, HTML, Flash & typical desktop publishing formats)Developers are able to integrate applications & workflow processes into Zumbox platform

Sender Controls

Bulk mailers send all their messages to all Zumbox accounts as well as in a paper format as core to platform configurationValue in that there is content in a user’s box on activationPricing model which reflects cost saving & campaign feedback value to large sendersUsers able to specify or upload address lists by mailing list, radius, post code or building

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The system has clearly defined sender and receiver attributes. The key challenge is whetherthese can be turn into sufficiently strong value propositions to change existing behaviour


© IPC, 2010

Zumbox: General User Receiver Features

Feature Description

Registration

Users go to Zumbox web site, enter their name & physical address & complete a registration formA letter is sent to the address with the Zumbox PIN

for that user to access the address’s unique web pageAuthentication is not of the individual, but of the

individual’s relationship to an address

Activation

User logs on to Zumbox web site, enters name & address, followed by PINMail box is activated by users registering their name

& address confirmed by PIN sent through mail on Zumbox web siteOnce account activated, user is required to change

the PIN for their preferred password

Log-In Type in name & street address on the home page, followed by password

Sub Accounts

Option to create individual mailboxes within same household – mail is then automatically separated

Notification Alerts to designated email address when mail received (SMS under development)

Help Self serve help function covering FAQs, tutorials & sender/recipient best practice

Message Creation

Upload a document (e.g. Word/PDF) & specify the street address of the recipient. The mail is sent electronically via Zumbox using secure FTP

Message Limits

Individuals/households/SMEs currently able to send 50 free mails per monthSubsequent mail charged on pre-payment basis via

PayPal

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Feature Description

Message Presentation

Receiving mail is free for all users and is accessible anywhere Users see mail as envelopes on the screen,

with message as a replica of the printed page from physical mailMessages presented into one of 3 boxes –

transactional, offers and content

User PreferenceControls

Once account activated, option buttons to designate preferences by individual sender –go paperless/opt out/block/view details/ print/downloadOption buttons to open/flag/print/discard mail

- data captured for sender analytics

Archive

Messages in unregistered accounts are removed after 3 months For registered users there is no limit to the

time messages can be storedUser ability to organise mail into 3 core

archive folders – Transactional Mail, Special Offers, Media MailSearch function

Change of Address

Register new Zumbox account at new address using same initial registration processOnce activated, all mail & settings are

transferred to the new account with old account now available for next occupierAll mail senders notified of new details


© IPC, 2010

Zumbox: Transactional Bulk Mailer Features

Feature Description

Registration Bulk mailers are registered once Zumbox has authorised them to join the systemUser interface tailored to senders in a separate log-in zone

Message Creation

Zumbox Content Wizard simplifies process, containing option buttons and tools that support multiple content formatsOption buttons to specify recipient profile for each content format prior to submitting existing or enhanced content file format

to Zumbox for distribution

MessageDelivery

For statements, invoices, purchase orders etc in PDF format, a data file is transferred to Zumbox via secure FTP, with corresponding address file In the US, electronic print run is sent to Zumbox, which then files messages in mailboxes for 3 months, pending consumers

activating their accounts

Print DriverAny file from any computer program that can be printed can be sent via the Zumbox Printer DriverSends mail directly from accounting software packages (e.g. QuickBooks, Peachtree, Microsoft Dynamics Great Plain)

including bills, statements, purchase orders

CustomisedMailing Lists

Service allows for mail to be sent to a single address or defined by post code, county, constituency etc

Flexible Delivery

Mail is delivered either instantly or to date/time specifications

PaymentPay now button to direct recipient to sender web site to complete payment process using sender’s existing payment system

(card-based/PayPal)Payment functionality can be integrated into the message as either micro EBPP or hyperlink

DataAnalytics & Reporting

Enables geo-targeting & customer list customisation Claim world class data analytics capabilities & easy to integrate with third-party web analytics applications, such as Google

Analytics, Omniture Site Catalyst & Coremetrics Know when mail has been viewed, printed & discardedEnables sender to know which households or businesses have read a documentCustomer reports of key mailing performance (20 standard reports) & additional specifications can be integrated

Developer API Program

Zumbox API Partner Programme to enable bulk mailers to send mail directly from internal software programs Zumbox API provides a set of tools to integrate proprietary & internal software directly with Zumbox Implementation services available


© IPC, 2010

Zumbox: Marketing & Advertising Bulk Mailer Features

Feature Description

Registration As per Transactional Bulk Mailer Features

Message Creation

Sender submits existing or enhanced content (catalogue, flyer, coupon, circular etc) to Zumbox specifying mailing list or geographic area for targeting (building/ post code/radius/constituency etc) Zumbox Content Wizard as per Transactional Bulk Mailer Features

Multimedia Content

Any content that can be printed can also be sent via ZumboxSends interactive email, including full HTML & rich mediaUses standard HTML embed codes to support audio, video, Flash & real time interactivity (e.g. Catalogues, product

videos, surveys, games, reply, comments) to enhance mailingDirects traffic to designated web sites

MessageDelivery

As per Transactional Bulk Mailer Features

Print Driver As per Transactional Bulk Mailer Features

CustomisedMailing Lists

Recipients can be specified using database files & mailing lists Service allows for mail to be sent to a single address, a mailing list, or a geographic region

Flexible Delivery Mail is delivered either instantly or to date/time specifications

Payment Buy now button to direct recipient to sender web site to complete payment process using sender’s existing payment system (card-based/PayPal)

Data Analytics & Reporting

As per Transactional Bulk Mailer Features Enables geo-targeting & customer list customisation Know when mail has been viewed, printed & discardedEnables mailer to know which households have printed a promotional couponCustom reports of key mailing performance metrics are available

Developer API As per Transactional Bulk Mailer Features

Direct MailSend list can be created from 3 sources – own accounts, third party address list & Zumbox address optionsMail delivered to special offer folderUse Zumbox & sender’s analytical tools


© IPC, 2010

Zumbox Technical Features: Key Themes

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Design broadly conforms to other e-box solutions & current best practice architecture. The system is reported to be robust but based on stress testing suggests the need for further examination

Themes Comments

System Architecture &

Capacity

Distributed architecture, clustered & cloud compliant, hosted through AmazonModel should create low cost & flexible capacity producing low unit transactional costs - needs

benchmarking

Software Environment

Built on open source, no tier one suppliers, mainly own codeDocumentation - use Internal Wiki & test dataA number of additional features are being planned (mobile permission, upload etc)

Administration & Reporting

Tools developed appear to have high user functionality Customer support function Tier 2 & 3 provided through call centre . Tier 1 is currently configured to be

supported through online user tools

Customisation

The system has 3 customisation methodologiesSkinning to support look & feelAdministration tools which can turn on modify functionality & system rules - relatively simpleCode change

System Security

Designed to be compliant with requirements of external bodies in US health & financial service sectorsFollows comparable rules to postal systemsHas passed USA accreditation tests & penetration audits

Authentication

Technical control through Zumbox archive databases appears compliant with market normsAuthentication - primarily based on relationship to street address (follows mail models) Lighter than postal modelsAuthenticated users creates closed system


© IPC, 2010

Zumbox: Security Features (1)

Feature Description

Identification & Authorisation

All mail senders & recipients have their identity verified by Zumbox prior to account activation Short registration form to complete, following initial name & address data input, to apply for full access to

Zumbox Security code mailed, via the national postal operator within 3-5 days of completion of registration formOn receipt of security code, user logs on to Zumbox & enters code to register their address & gain access to

additional features, such as confidential mail & ability to send mailUser has ability to change password after initial security code log inMaximum of 4 incorrect log-in attempts permitted until account is locked out System displays date & time of last successful log-in

Non-Repudiation

System has capability to record securely data related to the receipt of specific information from a user or another system & link that received information with the originator, including date & time of specific actions using Verisign PKI Capability to monitor recipient action with each mail items (open/print/discard buttons), as well as click

through activity from embedded content

Confidentiality Data protected from unauthorised disclosure whilst stored or during transmission through use of certificate based system supporting X509 standard algorithms

Data & System Integrity

SSL 128 bit encryption for data transmissionSSL security certificate issued by Verisign (leading trusted provider of internet infrastructure services)Secure FTP option to transfer your mail content and list of mail recipients to ZumboxTo send or receive mail users must interact directly with the Zumbox platform Industry standard secure FTP with 128-bit encryptionSensitive information in databases, including usernames & passwords, is stored in a 256-bit encrypted formatSecurity scans & penetration test series conducted daily/ weekly/quarterlySecurity team monitors Zumbox systems on a 24/7 routineAccess to cardholder data restricted by business need-to-know principle & physical access also restrictedAssign a unique ID to each person with computer access

Data Management

System capability to overwrite memory & storage, rendering the data unrecoverable to prevent disclosure when discarded by recipient or on account closure


© IPC, 2010

Zumbox: Security Features (2)

Feature Description

Audit

Security infrastructure is regularly reviewed, audited & examined by a third-party Level 1 Service Provider that specialises in security processes & technologiesSystem maintains an audit log for establishing an audit trail on security breaches & user activity

Authentication

Centrally controlled & managed by Zumbox, which approves & qualifies all senders, as well as monitors volumes & service quality closed systemAuthentication data stored as encrypted hash algorithm

Security Administration

All creation, installation & operation of system software & data is controlled by the system administrator who controls the functional integrity of the platform System administration functions reserved for specified role & staffMonitor in real time the activities of any logged on user or input device from network interfaces with

ability to disconnect if required System administrator has capability to create, retrieve, update or delete all security related attributes

of users, interfaces, software & data elements Access to network resources & user data is tracked & monitored Security systems & processes are regularly tested Anti-virus software, secure systems, applications & firewall configuration maintained & regularly

updated

Guidance Documents Information security policy document & User Guide maintained & reviewed during regular security

audits

Industry Security Compliance

Compliant with a global payment card standard, plus US financial services & healthcare sector security standards- Certified PCI-DSS Compliant (Payment Card Industry Data Security Standard)- HIPAA Compliant (Health Insurance Portability & Accountability Act)- BITS Compliant (Banking Industry Technology Secretariat)


© IPC, 2010

Zumbox: Summary of Current Position

61

Zumbox is in its infancy in establishing a service position in the US market. The strength of the solution has generated media interest, although the design features have yet to be significantly tested by high volume live useage

Comment

Status

Zumbox was originally conceived to create a paperless service business in the US marketThe service has only been actively marketed since Autumn 2009 & current market penetration is limited to

selected beta pilot in New Lennox, Chicago (10,000 people – up to 24% penetration in trial period), with a soft launch planned for wider Chicago in June 2010 Zumbox currently developed platform but developing commercial position and model

Market Position

Zumbox appears to be re-defining its strategic position as a result of its initial marketing effortsCore focus is to be a provider of the software solution & partner with businesses that have existing market

positions, which allows them to develop the product as an operational service In US seeking revenue share/discount partnerships with mailers, aggregators & influencers to bring in mail

senders; media owners to drive subscriptions in the household sector & City Authorities to create credibility Internationally seeking relationships and partnerships

Marketing Strategy

Transactional mail is the critical driver to drive/attract household activation - key targets are utilities, financial services players & Local Authorities Look to focus on mailing houses/intermediaries to leverage relationshipsRecognise benefits of co-promotionSeek to find high visibility brand mailers to support with coordinated launchFor direct marketing applications, recognition that system functionality creates significant attraction for

senders but needs to be carefully rolled out to retain active receiversPricing model is an effective basis to work on


© IPC, 2010

Digital Street Address: Pricing Opportunities & Principles

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Pricing strategy is likely to be based on a revenue share model with bulk senders and content partners. This minimises up-front expenditure for senders and drives activity within the service by making the start-up economics attractive compared to existing alternatives

Comment

Sender Pays Model

Pricing to deter mass spam abuse and police mailer integrity on special offers Item based pricing model, typically 20-30% of current physical price, but could also be by data volumeModel is inclusive of data analytics reports Probably only still valid in markets where physical world content based pricing still exists Pricing categories for transactional mail segmented by function – e.g. Delivery, mail view, go paperless

Pay Per Click Model

Specifically applicable to marketing promotions & special offers Likely to be attractive to hyper-local marketing segment ROI per response, based on a tiered model based on value of customer interaction from view through to purchase, inclusive

of data analytics reports

Customer ActivityModel

Most suited to DM & catalogue servicesOperates on model that reflects defined actions - whether item opened, subsequent actions (deleted etc) & permission

categories Each action has a fixed list charge to the sender, bundled with data analytics reports

Advertising Supported

Model

Specific types of media content delivered free, but with embedded advertising revenue share with content provider (potentially tailored by post code)Google Ads model with side bar advertising based on existing AdSense/AdWord fee model within user screen view

Subscription Model

Charge for archive service based on functionality Creation of tiered value subscription model for set service/content bundles

Data Analytics Service

Sale of consolidated customer data/usage patterns/trends analysis in fixed price bundles Strong demand from marketers for customer intelligence & user metrics


© IPC, 2010

UPU Dot.Post Initiative

Development Update Comment

The Universal Postal Union (UPU) and the Internet Corporation for Assigned Names and Numbers (ICANN) have signed the contract that grants the UPU managing authority over the top-level domain name .post (dot.post) of which the UPU will be the guardian

The domain will be user for developing e-commerce &facilitating international trade, facilitate e-identification, linking electronic addresses to physical postal ones to serve as legal proof of an individual’s identity

The domain name could eventually act as a bridge between national governments for the transmission & cognition of official documents

The underlying driver behind the initiative is to extend the universal postal service and make the post a multi-channel service provider, enabling posts to reach customers anytime/anywhere

The UPU is now identifying an operator to set up the domain registry, as well as a number of ICANN-accredited registrars to sell the .post domains. The UPU is also applying to the Internet Assigned Numbers Authority (IANA) to have the .post domain registered in the Internet Root, enabling it to be operational & recognized by the Internet

The initiative has been in development within the UPU foralmost 5 years

There are ongoing funding issues & internal debates

The broad principle is that each national post would be able to develop services within this domain environment

Perceived advantage that tighter control of registrations enables greater security

Potential for posts to develop addresses for every citizen under this concept linked to physical address, which would be unique

Advantages may be more marketing than technical & could be linked to the idea of the digital USO

Potential to be enabling infrastructure or platform for eBox type services

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The .post domain is expected to be operational by mid-2010. The UPU will develop, implementand monitor governance rules for the domain & manage the attribution of domain names,which will be available to postal sector stakeholders who meet strict eligibility criteria.


© IPC, 2010




4. Business Model and Market Development - Personal Identity


6. Summary

Content


© IPC, 2010

eBox Issues for Posts: Summary

65

Strategic Issues• Core – Country Issues

• Digital infrastructure• Consumer adoption behaviours• Address databases and address change

procedures• Data confidentiality laws• Strength and trends in online marketing• Strength of mail media intermediaries• Direct and indirect digital competition alternatives

• Strategic Attractiveness• New market• Net impact

• New revenues• Additional substitution effect

• Implementation complexity• Alternative strategies

• Do not compete in this space• Alternative models

• Closed, authenticated, based on certificated life time identity

• Closed, authenticated, based on life time identity

• Digital Street Address• Security on open system• Swiss Box model

Commercial Issues• Mail Senders

• Incentives for adoption • Simplicity of technical interfaces• Sponsoring launch consortium• Buy in by government/local government

• Active sponsorship• Relation to banking sector• Relation to utility in-house portals

• Receivers• Clarity of value proposition• Consumer and mail segments and incentives

• Social groups and behaviours• Recruitment costs and maintenance• Additional services based on ASP subscriptions

• Adoption• Pricing model

• Physical parity• Discount• Click through

• Marketing strategy• Aggressive• Passive
