The future of business communication is multi-channel various media outlets will be used by businesses to communicate with customers and partners. Mail will have a definite place in that future. Yet with mail, as with other media, as soon as a new technology arrives, the world seems all too quick to predict the demise of all the preceding ones.

Predictions of a new medium completely eliminating the old one have reverberated throughout history: radio would destroy newspapers; television would eradicate radio; the telephone would eliminate mail; microfiche would make paper obsolete; video recorders and cable television would supplant cinema. The advent of the PC in the 70s and the Internet in the 90s brought new predictions: email would make physical mail obsolete, and Internet advertising would wipe out all other media. In reality, all "doomed" media have persisted. In particular, paper-based communications have thrived rather than declined. As Niels Bohr, the Nobel Prize physicist once put it, "It is difficult to make predictions, especially about the future."

We have conducted an extensive study of the changes taking place in the industry with our project, "Electronic Substitution for Mail: Models and Results, Myths and Reality" (see PostInsight.com). Our research shows that mail not only has a future, but there are also many untapped opportunities to grow mail, such as for customer acquisition, building customer loyalty and retention, cross-selling and low-cost package delivery for burgeoning Internet sales.

The Mailstream Is Complex

Why has mail defied the dire predictions of decline since the mid 1970s? Perhaps the simplest answer is that mail is much more complex than commonly assumed. Mail is not a single, monolithic product with uniform characteristics that can be easily supplanted. Instead, mail serves a very diverse mix of needs, especially for businesses.

Consider this: the final steps that generate a piece of mail are intertwined with complex upstream business processes that often involve several parties inside and outside the organization. Email, like the telephone, does not automatically integrate with such processes by simply offering a faster delivery mechanism for messages. Thus, many people often equate the total value of mail only with its delivery speed when comparing it to email. Instead, mail's value derives from its complex interaction with other established business processes and its acceptance by consumers.

Email and Mail More Companions than Rivals

Email is with us everywhere, every day. Email messages now outpace mail by 33 to one in the US and 23 to one in Europe. Since every business and virtually every economically active household use email, shouldn't all mail have been displaced already?

Businesses are finding that customers are inundated with email and are loathe to accept more transactions and promotions in their inboxes. Thus, businesses are sticking

with the mail channel because it is less intrusive than email and telemarketing. Even in years when total mail declined in the US, B2C mail grew.

Evidence is strong that email is most valued for only some applications that go through the mail. Email is, thus, a niche application, much like express shipments do not compete with regular mail and are an entirely different product. Instant messaging is now threatening email, but it will not impact mail.

What about the Internet's impact on mail? Contrary to popular belief, Internet users receive more mail than non-Internet users and the difference between the two groups is growing. Thus, the claim that a wired household is ripe for substitution is unfounded. Wired households include attractive consumers who will continue to receive mail along with other media from businesses eager to get a greater share of their wallets.

The Statement Is Still in the Mail

For over a decade, analysts projected that electronic bill presentment and payment (EBPP) would destroy mail volumes. But recently, a new reality has set in.

Some 34 billion bills and statements are mailed annually in the US, with eight billion sent to businesses and 26 billion sent to consumers. Only 1.5 billion are presented electronically, and some are duplicates of mailed paper copies. EBPP has not made the inroads predicted in the press, and analysts have now revised their bullish views and project declining adoption rates for EBPP. The reality is that even in 2000 to 2003 when total mail volume fell in the US, bills and statements grew over three percent annually, and six percent to 11% annually for banks, telcos, utilities, insurance and credit cards.

One analyst projects a 79% growth in US households using EBPP in five years. But when the growth in households is considered, and even if all adopters convert all their bills and statements to electronic receipt, total mail volumes would decline only 0.33% per year hardly a cause for alarm.

The Generational Effect

Past predictions of an imminent mail decline due to the "generational effect" have not materialized. Consider economically active young adults today (18-24 age group) who were raised with PCs in primary school and the Internet in secondary school. These young heads of household can hardly be considered old guard yet they are receiving mail with patterns similar to past generations.

It turns out that as people move from one age group (or life stage) to another, they behave the same as prior generations. As young people mature, marry, have children and establish households, they find their mailboxes just as full as those of their parents and will largely accept the same presentment habits.

How can this possibly be true? The facts above are undeniable. Perhaps society carries a "perceptual headwind" based on observations of young people interacting with · technology. The public assumes that use of technology to send messages should translate into businesses not wanting to use the mail channel to reach us. Yet businesses, which originate 90% of all mail received in households, do not yet consider an individual's technological adroitness in deciding how to target them. Young people can no more stop their mail from coming than they can control radio advertising or the billboards they pass along the road.

The Internet as a Driver of Mail

The Internet provides a powerful new medium for marketers. Yet, in spite of inflated initial expectations, online advertising is not eliminating all other forms. Still on-

line advertising is the fastest growing medium, now growing more slowly than TV in its early days and commands just a few percentage points of total advertising spend. Web-based media will settle into the media mix as a complement rather than as pure substitute to other media, including direct mail, print and broadcast.

Direct mail has held its share of advertising spend in recent years because it is effective, not intrusive and not easily suppressed by the recipient. Customers are more inclined to do business with companies that send them targeted mail. In the meantime, legislation of the "Do Not Call/Do Not Email" type has impacted both email and telemarketing.

Variable digital on-demand printing or the rise of color at a reasonable cost is facilitating increased personalization and customization. This will result in more valuable direct mailpieces. And the simultaneous use of color, personalization and customization can result in 15 times the lift of traditional direct mail.

The Internet has become a powerful ally of mail order firms. Consumers who receive catalogs spend more time on the seller's website, place more orders and spend more. Thus, more parcels will be sent through the mail. And even Internet "pure plays" are using mail and catalogs to attract customers to their sites.

The function and purpose of mail will continue to evolve with each new technology. Mail will remain a valuable B2C communication channel. It will continue to find new niches for which it is the most effective medium, either standalone or in combination with the new technologies in today's multi-channel world. 

Luis A. Jimenez is Sr. Vice President and Chief Strategy Officer for Pitney Bowes. Jimenez leads the corporate strategy function for the firm in the changing world of digital technologies and electronic communications and commerce. For more information, visit www.pb.com.