Nov 8, 2012
When it announced its third quarter earnings last week, Pitney Bowes said that it was deferring availability of its highly-anticipated Volly secure digital delivery service until 2013. Pitney Bowes originally told investors, analysts, employees, and partners that the service would be launched in the “second half of 2011.” In its earnings report, Pitney Bowes noted that it:
“has decided to add to and enhance its technology to provide additional capabilities that will improve the onboarding process for billers. This will result in improving the scalability of the service and facilitating biller density.”
There are two potential reasons for this. Either Pitney Bowes has lost focus on its U.S. launch while trying to license its platform internationally with partners like Australia Post Digital MailBox, or they have reached a point where they are too caught up in perfection to launch before the service is fine-tuned and enough brands have signed on.
Here’s a summary of the last two years of announcements from Pitney Bowes and its partners (click on the image to access a larger version).
I reached out to Pitney Bowes for additional comments on the decision to push availability to 2013. Here’s a statement from Chuck Cordray, President of Volly:
“We’ve said for a while that density in the mailbox is the most critical factor, and while we’ve made a lot of progress, with 60 large service bureaus and mailers signed, we want to be further along before launching. We’ve also announced several partnerships over the last several months that expand the access points for Volly. Over the coming months, we will do more to increase the density through signing service bureaus and brands, and creating even more access points to make it easier for companies to connect with Volly.”
I don’t think that focusing on signing more service bureaus is the right approach, unless it is to onboard an interested brand. Strategically, Pitney Bowes has already done a good job signing up third-party mailers. They cited 60 alliances that represent 6,500 brands and companies that send over 5 billion mail pieces annually. That sounds great for marketing purposes, but it doesn’t mean that those brands are interested in using the channel—especially when there are no consumers using the service today. The focus should be on signing the brands, but Volly is a tough sell when the service isn’t available. Even Broadridge Financial Solutions (Pitney Bowes’ first strategic alliance for its Volly service) took 22 months from signing to announce the first brands to indicate support—Morgan Stanley Wealth Management and UBS Financial Services. In fact, Broadridge dedicated program slots during multiple customer events in 2011 in an effort to help introduce the concept of the digital mailbox services channel to their customers.
This challenge is also not unique to Volly. The need for market education remains substantial. Competitors Digital Postal Mail (Powered by Zumbox), doxo, and Manilla have announced fewer than 20 combined brands who have agreed to deliver content via their services. These competitors have also established partnerships with large third-party mailers, but not at the same scale as Pitney Bowes has done with Volly. While third-party mailer partnerships are nice, these services will eventually need to be profitable. Due to the early stage of the market today, none of them are. To be profitable, they need to attract the brands; to attract the brands, they need to have the brands’ customers; Volly has none of the brands’ customers.
I understand that critical mass is important for the masses to embrace a digital mailbox service, our research supports it. That said, InfoTrends research also shows that 19% of consumers were interested in these services if they could access some bills and statements, in conjunction with other content (e.g., other types of customer communications or special offers). I think it’s time for Pitney Bowes to embrace an agile software development approach to their service and launch a public beta.
I don’t know what I would do in Chuck Cordray’s position, but one thing should be made clear—consumers don’t know that Volly exists, so they don’t care that its launch is delayed. The challenge is that there is surely pressure from investors, analysts, partners, and Pitney Bowes executives to get the service launched. Knowing Chuck’sÂ background, my guess is that he’s making the decision based on what’s right for the consumer and was not able to get enough brands signed in 2012 to justify moving forward.
When I weigh all of the factors, I think the best strategy would be to quietly launch a public beta now and save the marketing dollars for when early users have helped work out any remaining kinks. Internal testing can only take you so far.
Associate Director, Document Outsourcing
Since completion of our landmark study, The Emergence of Digital Mailbox Services, InfoTrends continues to track, present on, and consult for the digital mailbox services market in addition to our broader tracking of the customer communications delivery and payment markets via studies like our recently-announced The Future of Multi-channel Transactional Communications.
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