Separating Roles of the USPS

A recent story by the BBC on mail delivery in Afghanistan highlights one of the most important roles of the Postal Service, maintaining and standardizing the nation’s system of addresses and postal codes.  Afghanistan has neither a standardized system of address nor postal codes.  In fact, in many parts of the country, there are no street names, let alone street names at all.

Postal Service as a Platform for Commerce

The story about the Afghan Postal Service, provides an illustration of the challenge of communications in the 17th and 18th century.   Door-to-door delivery cannot be performed unless it is relatively inexpensive to find the door where the delivery is to be made.   The standardization of addresses and creation of numerical codes defining discrete geographic areas in the 20th century significantly aided the economic growth of the United States in the 1960′s forward.

Logistics and Distribution

The creation of zip-codes simplified the process of optimizing the nation’s supply chains.   Developing the optimal locations of plants and warehouses and minimizing the transportation between these locations depends on the existence of a simple, numerical representation of the locations involved.  Similarly, optimizing the routing of delivery vehicles, whether for the delivery of bread to supermarkets, beer to bars and restaurants, or packages to homes and businesses rely on the system of zip codes.   Delivery is further simplified by the use of standardized address systems that make it easier to know where 123 Main Street is relative to 256 Main street. (Usually a block a way and on the opposite side of the street.

The existence of zip-codes and standard addresses made home delivery of parcels much easier.   The development of the great Catalog stores of the early 20th century (i.e. Sears, Montgomery Wards), modern catalog merchants (i.e. LL Bean, Lands End), TV shopping channels, and web-based retailers all require the inexpensive delivery services that zip-codes and standardized addresses provide.

Marketing and Merchandising

Standardized addresses and zip-codes significantly lowered the cost of targeted marketing and targeted merchandising.

Targeted marketing really starts with direct mail.  Direct mail is cost-effective because standardized addresses and numerical codes for addresses allow for lower cost delivery of hard-copy communications that make mail cost-effective for everything from charitable solicitations to pizza coupons.

Standardized addresses and zipcodes have a role in marketing beyond mail as they are critical for creating relevant advertising on the web and on mobile devices.   Knowing where a person lives significantly improves the placement of relevant advertisements on web pages and mobile devices.  Even Facebook allows marketers to target by zip-codes.

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