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Zumbox delivers digital mail to physical addresses and provides a viable alternative to the good ol’ U.S. Postal Service. It saves trees, saves money, and reduces emissions. It’s also more secure.
Start-up company Zumbox entered its public beta this week, just in time for Christmas. According to the company, “Zumbox is a paperless postal service that enables consumers and businesses to send and receive postal mail online. With Zumbox, mail is delivered electronically, from street address to street address, allowing any digital format to be mailed. By eliminating the paper, printing and logistics associated with traditional postal systems, Zumbox offers businesses a cost-effective and sustainable alternative to the U.S. Postal Service.”
We’ve actually known about Zumbox for some time, having heard about it through colleagues. We checked out the private beta and got the pitch from the founders. TechCrunch was one of the first to write about the public beta, which opened yesterday, but the piece, which focused entirely on security concerns, missed two of the fundamental value propositions: saving trees and saving money.
Zumbox provides an alternative to both physical mail and email. Like the Postal Service, it’s a closed system. You have to sign up to send and receive “mail” within the system. This mail can take pretty much any form: letters, bills, menus, catalogs, magazines, and all manner of direct marketing junk mail. Zumbox has mapped out more than 150 million U.S. street addresses for businesses and consumers alike. If you live or work somewhere in the U.S., there’s a 99% chance that you have a Zumbox. It just needs to be activated. Unlike email, Zumbox verifies the identities of everyone in the system. When you sign up for a Zumbox based on your street address, you receive a PIN in the mail (to your physical mailbox) that activates your Zumbox, at which point you can send and receive mail from it. Because you officially own it.
Your Zumbox exists online or “in the cloud” as one might say. It’s accessed through your browser, but it’s tied to your street address. All of the mail sent and received is digital. Which means no trees, no logistics, no waste, and no transportation emissions. The potential impact is pretty significant.
Each year, more than 200 billion pieces of mail are delivered through the U.S. Postal Service. This consumes approximately 150 million trees…or one for every address in the Zumbox database. And this is just one aspect of its environmental impact.
Zumbox produced a white paper entitled “What’s the Real Cost of the 42-Cent Stamp?” The premise is that most of the actual costs of mailing a letter are not reflected in that 42 cents. Those other costs are known as externalities. We’ve written often about the external costs of fossil fuels, such as the health effects of pollution and the national security implications of relying on hostile foreign sources of energy. Just as these are not priced into a gallon of gasoline, the social and environmental impacts of snail mail are not priced into postage rates. Which means we all pay them in other ways.
The white paper, which we’ll hopefully make available in a digital form, details the “hidden impacts associated with paper mail across the spectrum. These include environmental costs associated with paper production and printing, with transportation and logistics, and with disposal.” In other words, forestry, pulping and paper manufacturing (water/air pollution), printing (toxic inks), logistics (greenhouse gas emissions), the waste stream (landfills/recycling), and social costs e.g. filling your mailbox with unwanted and even offensive junk mail. None of this is covered by the stamp, but it has to be reconciled somehow. (Not to mention the fact that the U.S. Postal Service lost $5.1 billion last year.)
Zumbox addresses these issues in ways that email cannot. Email is largely a complement to paper mail, just as it’s also a complement to the telephone. Zumbox is a viable alternative to paper mail and the Postal Service itself. It provides all of the same functionality and utility (and then some) for everyone who uses the existing system i.e. businesses, consumers, direct marketers, etc.
In addition to the externalities, though, there are tremendous hard costs associated with paper mail, especially when you operate on a scale like the major banks, utilities, and telecoms. It’s estimated that these companies spend about $1 per statement, which means a cost of $12 per customer per year. Citigroup claims to have 200 million customer accounts. Even if only a fraction of those are in the U.S., the potential savings will easily run into the tens of millions of dollars annually. With Zumbox, businesses are charged just two cents per mailing for “postage”, and the statements themselves are (of course) digital. The costs there are negligible.
TechCrunch expressed concerns about security. “[W]hy would anyone trust their personal mail, which often includes sensitive information, with a young company they’ve never heard of? The company goes to great lengths to explain the service is secure, and how they’re compliant with the security standards of the financial, healthcare, and banking industries, but that remains a significant hurdle.”
While this is a legitimate concern, there are also security benefits. Paper mail is one of the leading sources of identity theft, and while paperless statements via email addresses this concern, we also know how fragile that system can be. Case in point: when hackers gained access to Governor Palin’s email account during the election. The verification process with Zumbox addresses these vulnerabilities and appears to be at least as secure as the existing paper mail system, which isn’t entirely secure to begin with. Our mail sits unprotected in our mailbox for hours before we retrieve it each day.
Finally, there is the issue of direct marketing junk mail. There are several pay services that promise to put an end to it for you. We’ve tried several with zero success. And even if these companies are successful in removing your name from these lists, you’re back on there the next time you buy something and will have to repeat the process. Zumbox doesn’t promise to end paper junk mail entirely, but you do have control over who sends it to your Zumbox. If you want to continue receiving the Victoria’s Secret catalog or those Bed Bath and Beyond coupons, you can (assuming those companies sign up with Zumbox). Otherwise, you can block them. Direct marketers that choose to use Zumbox have the potential to gain competitive advantage through better targeting and an ability to identify customers who actually want to receive their offers. After all, it only costs two cents to send each piece. It’s a more efficient, cost-effective, environmentally friendly, and customer friendly way to market through direct mail.
Nevertheless, Zumbox does face significant hurdles in terms of adoption. Many things have to happen simultaneously in order to be successful. Companies and consumers need to sign up more or less in equilibrium in order for the system to function. There is also competition from Earth Class Mail; however, we fail to see how scanning and shredding paper mail does anything to address the environmental or cost concerns of paper mail.
12 responses so far ↓
1 Ari Herzog // Dec 24, 2008 at 8:40 pm
Huh?
I read the above, I read the Zumbox FAQ, and I read all of the TechCrunch comments.
I don’t understand.
If I sign up online, the company sends me a PIN (which assumes nobody, as one TC commenter noted, would wait til I go on vacation, sign up “for” me, and steal my PIN) and then all my snail mail gets redirected to Zumbox which opens my envelopes, scans everything, then reproduces the envelopes and content as digital mail on a website?
What am I missing?
2 allison // Dec 24, 2008 at 11:02 pm
Link to the white paper:
http://www.scribd.com/doc/9405157/Zumbox-White-Paper-Whats-the-real-cost-of-42-cent-stamp
3 Big Marketing For You » Blog Archive » Zumbox is the Paperless Mail Alternative for Businesses and … // Dec 25, 2008 at 12:40 am
[...] unknown wrote an interesting post today onZumbox is the Paperless Mail Alternative for Businesses and …Here’s a quick excerptThis mail can take pretty much any form: letters, bills, menus, catalogs, magazines, and all manner of direct marketing junk mail. Zumbox has mapped out more than 150 million U.S. street addresses for businesses and consumers alike. … [...]
4 Kenn Krain // Dec 25, 2008 at 1:32 am
I’m sorry, this is the dumbest idea i’ve ever heard. I’m mean ever. Worse than the sock puppet. No real mail, as in bank statements or health or insurance or any kind of serious “first class” mail is ever going to be sent to something called “zumbox” by any real companies. All that will ever be sent to idiots dumb enough to sign up for this service will be junk mail. Why would anyone ever sign up for it? These guys will fizzle out as soon as their investors see the first $3M go to out the window on a dumbass idea.
5 M_Bakker // Dec 26, 2008 at 11:16 am
“Max,” what about doing your own skeptical research and reporting on the actual ecological benefits that one can expect from this marketing scam called Zumbox?
It’s the old 80/20 rule, if not 95/5. Look in your own mailbox. The vast majority of transactional mailers are major corporations that have real IT departments and have to meet real regulatory compliance. They’re not going to opt to insert their privacy-sensitive billing records into ultra-low-security zumbox accounts when they have their own secure electronic billing infrastructures already in place that comply with all the regulatory requirements. Zumbox doesn’t even claim that their system is compliant with a single one of these regulatory *requirements* – they’re not even consciously aware of them, it appears. If all you care about is junk mail and you don’t truly intend to get financial billers then why bother to build expensive data centers and pay for expensive compliance programs?
Customers who won’t opt in for electronic billing because they prefer paper are not going to opt for Zumbox over their own bank’s or cable company’s electronic options. It’s simply preposterous to think that Zumbox is going to change consumer behavior.
All that means that the only “mailers” that may augment their paper mailings (but not likely stop their paper mailings because, as you point out, they still pull economically) are direct marketers, who don’t have to comply with significant regulatory compliance like billers do. Zumbox does not have a *single* major bank or utility company or any major 1st class mailer using their system… why should any consumer sign up for an account to receive only spam??? Their IT sophistication is obviously very low to not even understand how difficult it is to get any bank to push privacy-sensitive information into any other company’s computer system, much less an entertainment media-oriented startup with only $3M of funding. Get real, Max. You really think your bank is going to give you the option of using your Zumbox account to get their bank statements? As Seth and Amy would say, “REALLY?!”
This company is treating privacy and regulatory compliance like a joke. Neither the founders or the investors in Zumbox did any sort of due diligence of what real mailers will require – trust me, this just happens to be the field I work in. They are representing ecological benefits when none will transpire if no major mailers shift to using their system – and that’s just not going to happen; doing so borders on fraud if not just simply false advertising. Some people call this “greenwashing.” This company isn’t even ready to prepare to get ready for prime time… they seem utterly clueless about privacy laws, SAS70, Sarbanes-Oxley, GLB, and a raft of other regulatory requirements that would need to be met before any major corporation would ever use their system for transaction mail, legal correspondence, tax, insurance or any of the things that we as consumers would consider “important mail.” You shouldn’t fool yourself – or your blog readers – to think that you’re helping the ecology much.
[Excerpted from my response to you on TechCrunch.]
6 Max Gladwell // Dec 26, 2008 at 2:43 pm
M_Bakker: It appears you know a lot more about Zumbox than we do. Considering the passion with which you’re tearing down the concept, both here and on TechCrunch, it leads us to believe that you have an axe to grind or some other vested interest in seeing Zumbox fail.
We have no interest either way. We know a couple people who are involved with the company, which we stated in the post. And we have an appreciation for any entrepreneurial venture that marries technology with sustainability. Not to mention a private alternative to a grossly inefficient and wasteful government monopoly like the USPS.
There has to be a better way. Zumbox may not be it. That remains to be seen. But it may get people and the government thinking about ways to waste fewer trees and taxpayer dollars on an antiquated system.
7 Max Gladwell // Dec 26, 2008 at 3:08 pm
Ari: There’s no scanning or paper involved with Zumbox whatsoever, and it has no impact on your current USPS paper mail. No forwarding of any sort as far as we can tell.
If you and a friend sign up for your Zumboxes, you can send digital letters to one another like email, only it’s tied to your physical address. Not too much value there. But if you bank with Wells Fargo and IF Wells Fargo starts to use the service, you can opt to receive your statements in your Zumbox as opposed to paper or electronic billing.
E-billing is OK but it has its drawbacks. You get notified by email, but you basically have to manage a separate mailbox for each bill e.g. each bank, utility, telecom, cable co., etc. You have to login to each to actually get your e-statement. At least that’s been our experience. We have it down to a system, but it’s far from ideal.
This article in GreenBiz has some great info about the problem: http://www.greenbiz.com/feature/2008/10/20/e-billing-most-overlooked-green-practice. Though Con Edison has been actively marketing and encouraging its customers to go paperless, less than 5% of its 3M customers have adopted it over the past two years. We’ve heard from other big companies about this issue, and adoption is the biggest hurdle. It’s just not easy enough to go paperless.
If the major catalog and direct marketing companies start to use Zumbox, you should be able to sign up there, as well…and hopefully opt out of getting the paper versions. So if they are going to send you paper junk mail anyway, you may as well opt to get it digitally. And then, theoretically, you should be able to block receipt of it altogether.
Either way, it’s clearly not as wasteful to get your magazines, catalogs, and junk mail digitally.
8 AvangionQ // Dec 26, 2008 at 7:39 pm
Interesting thought on the death of paper wasting spam mail … I can think of a much easier way to kill spam mail — create a paper tax, then create tax exceptions for books, educational uses and not-for-profit businesses …
9 econewswatcher // Dec 26, 2008 at 8:01 pm
Gee, this is really a wonderful alternative to email, wait…no its email? Great “duh” concept. Perfect for Junk mailers to wash their lists and go “green.” Whatever…. but for the tech guy, its a a very lame start up team. They better have a damn lot of money….I would bet on almost ANYone pulling this off over this rag tag team of wannabes. A music retailer at the helm… hmmm, that is great evidence of vision.
10 Paul Smith // Dec 27, 2008 at 3:05 pm
I’m a pretty smart person, and a big supporter of the greening of business and life, but I have to agree with Ari, the idea is not clearly presented (at least for me) leading to more “huh?!”s then “aha!”s.
This is indeed a good conversation starter/continuer on alternative ways to handle our currently paper based communications. And yet it depends so much on people/businesses shifting to a very different way of doing what at the moment is a simple, ingrained, habitual part of their day do day lives. Zumbox feels more “Come over here and things will be better” rather than “Let’s work with what you’ve got, shifting it in a more positive direction.” I think that change happens easier, faster when it’s done from a vantage point of the customer, rather then from an already there, come to where we are point of view.
11 Johna // May 17, 2009 at 2:37 am
Hey, I use a similar service to Earth Class when I travel, http://www.privatebox.co.nz They seem to do a very good job!
12 Max Gladwell Founder Joins Zumbox, the Paperless Postal System | Max Gladwell // Sep 21, 2009 at 8:06 pm
[...] covered Zumbox several times since the site went live in late December of last year. The so-called Paperless Postal System was featured in our posts on [...]
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