Like other state-owned mail services, Swiss Post is under pressure from private-sector competition and the internet, but it is not running scared. The firm is transforming itself into a media and technology brand.
Even in an era of shrinking print circulation figures, the newspapers that dropped into five Zürich neighbourhoods for six months last year represented an impressive new low: “the publication for one”. Each issue of PersonalNews greeted its reader personally (“Guten Morgen Herr Graf”) and offered an individually tailored mash-up of the day’s stories.
At last there was a newspaper for the reader who demanded business coverage from The International Herald Tribune, local news from Luzerner Nachrichten, football match reports from Die Welt, and comics from The Denver Post, all in the same package.
For several years, the small Bavarian start-up Syntops had scouted for possible partners along the newspaper supply chain – publishers, printing companies, distributors – who would be willing to invest in the untested model and technology of PersonalNews. The firm’s eventual collaborator, and the one that ran the Zürich trial programme, turned out to be an unlikely media pioneer: state-owned mail monopoly Swiss Post.
“We were quite surprised because we hadn’t found anyone who was willing to invest money in a project where you wouldn’t really have the proof of technology,” says Syntops CEO Gregor Dorsch. “Especially knowing other postal services, the post is not really perceived as a very innovative company.”
Facing diminishing demand for its core service, Swiss Post has emerged as a model for state-owned utilities looking to remain relevant. It is reimagining itself as a global media and technology company, both competing and collaborating with some of Switzerland’s largest publishers, banks and tech start-ups. Swiss Post executives see themselves on unique turf at the intersection of data networks and the old-fashioned letter routes, with the ability to carve out an unrivalled position in the digital age. “We believe we are in the communication business, not just in the physical letter-mail business,” says executive vice president Frank Marthaler. “The internet is a fantastic place, and we want to work with the internet and not against the internet.”
Swiss Post was created in 1997, when the government split the postal and telecom functions from the country’s PTT utility. Nine years later, the Swiss parliament abolished the company’s parcel monopoly, and is now considering a bill that would do the same in the domestic letter business. Yet instead of fearing private-sector competition, Swiss Post is moving into new spheres.
Last year, Swiss newspaper publisher Tamedia, which owns Der Bund among others, faced with a decline in its subscriber base, scrapped its early-morning delivery operation and outsourced it to the Post. “Swiss Post has the possibility – and most importantly the know-how to operate these early-delivery operations more efficiently than we do,” says Tamedia spokesman Christoph Zimmer. Meanwhile, Syntops is still assessing the results of its PersonalNews trial, with no immediate plans for a wide release of the print service, but is unveiling a digital, €1 per day version of the product.
“In Europe, as the posts become liberalised, they’re looking at the world a little differently,” says Steve Isaac, vice president of Earth Class Mail, a Seattle-based mail outsourcing firm which has sought partnerships with postal companies worldwide. “It’s opened up a review of how they do business, and other options and avenues that may be available.” Swiss Post has a licence with Earth Class Mail for use of a proprietary software platform that it markets to individual and corporate customers as Swiss Post Box.
Swiss Post has held on to its most visible, high-overhead infrastructure: a chain of high-street retail outlets, a retail-banking arm, expensive workforce, and the nation’s largest public-transport network, consisting mostly of post buses in rural Switzerland. But in 2002, Post executives embarked on a plan they called “Reengineering Mail”, to consolidate the firm’s 18 sorting facilities nationwide into three major centres and six sub-offices. Inside, they developed state-of-the-art printing facilities, allowing the Post to offer integrated mailing operations for companies which still rely on paper correspondence.
Today, all statements and bills for Swisscom and Orange telephone customers in Switzerland originate on Post printers. The Post is looking next at developing similar services tailored for governments and health providers. “If you take just two days a month of letter-mail in these two industries, it’s massive. If you compare the range of digitisation to other companies, they are lagging behind,” Marthaler says. “It’s an immense market, and it needs a trusted partner in this environment.”
At the same time, Swiss Post has invested in scanning technology that could allow customers to receive their entire mail delivery – from postcards to shopping catalogues – in digital form only.
For Zürich Financial Services, Swiss Post has created a hybrid digital-paper mailroom for corporate operations in six countries. “It is the hub where physical and electronic information come together,” says Marthaler. “In general, we want to give consumers the choice of getting their information either classically, with a physical letter, or electronically.”
Swiss Post has upended its culture to encourage such experimentation. Last spring, the Post promoted a former engineer, Michel Kunz, to serve as CEO; now nearly all of the company’s senior management have an information-technology background. One Post employee is permanently assigned to the Swiss Federal Institute of Technology in Lausanne, with the goal of discovering new products and private-sector collaborators.
In addition, the firm encourages innovation with a year-round “Postidea” scheme, which allows employees to present ideas to improve procedures, while there is also an annual contest to develop pioneering projects with a prize of Sfr 3,000 (€2,000). One project developed internally has made it to market: a thumb-sized disk drive called SwissStick, designed to serve as “a secure office in your pocket”, as Marthaler puts it.
The idea is that a user can insert the device into any computer around the world and safely access a Swiss Post Box account and other password-encrypted information online, without fear of leaving personal data behind. It was developed by SwissSign, a data-security firm which the Post acquired as a four-year-old company in 2005. Since then, the Post has allowed the 25-person firm to function as an autonomous unit, under its existing management structure and a streamlined decision-making process.
Despite a domestic mandate, Swiss Post is not shy about looking across borders for business, which executives consider a necessary strategy, given the company’s limited geographical market. The SwissStick is sold internationally, while Swiss Post Box services are offered in four neighbouring countries, Italy, France, Germany and Austria. “Now we are not growing in Switzerland. We are growing abroad,” Post spokesman Mariano Masserini says. “The expansion possibilities in Switzerland are not there.”
Most unusually, Swiss Post is marketing many of its services – domestically and abroad – under its corporate name. It is hard to imagine a customer who has grown up using Japan Post or Royal Mail or the United States Postal Service choosing to buy sensitive computer hardware or a data-security system or a bespoke newspaper from their national postal service.
“Not every postal company has the possibility to go in this direction because brand recognition, brand value, is really key – in particular, with ‘Swiss’ in the brand,” says Marthaler, citing the country’s reputation for efficiency, service culture and bank secrecy. “There is still very solid recognition globally for being trusted.”
19.00 Deadline for readers to pick up their sections for the following day’s paper. Readers can change their mix daily.
23.00 Syntops computers process incoming data from publications worldwide. If a paper still hasn’t gone to press at that hour – like most in the Americas – it won’t show up in PersonalNews for another day.
23:30 Printing begins at a Swiss Post plant outside Zürich.
02:30 Printing concludes, post-press process begins. Each copy needs to be matched to a specific customer, so papers are kept in order as they are folded and stacked.
03:00 First papers enter Swiss Post trucks for delivery by 07:00 across six Zürich neighbourhoods.
As more consumers watch, read and listen to headlines on various digital devices, out goes the cachet of your chosen news brand being your most important accessory. With so many commuters hidden behind iPhones and BlackBerrys it’s difficult to tell who’s reading what and therefore who to sit beside. Is the fetching lady in the trim coat from Kitsuné reading Le Monde or The New York Post? Is the dashing gentleman reading The Sun or il Sole 24 Ore? For our morning commute we’d like to see a little electric Swiss Post scooter pull up at 06.00 and deliver a custom daily bulletin that mixed all the subjects we’re keen on combined with all the surprise that a good daily journal’s supposed to deliver.
20% Die Zeit for the quality of writing and depth of reporting
15% The New York Times for international coverage
20% The Financial Times for opinion and a global view
5% The NZZ for its quirkiness and serious tone
5% The Sydney Morning Herald for its property coverage
10% Il Sole 24 Ore for its command of European business coverage
15% The Independent in its original form and spirit
10% Dagens Nyheter for its culture coverage
The internet is a fantastic place. We want to work with the internet and not against it We are growing abroad. The expansion possibilities in Switzerland are just not there