Confidential/Internal Use Only Marketing Mail 2012 Holiday Mobile Shopping Promotion & Mobile Commerce & Personalization Promotion Update USPS and PrimeNet September 7, 2012

Confidential/Internal Use Only 2  PRC Approved August 7th  Start RegistrationSeptember 15  Promotion Start Date November 7  Promotion End DateNovember 21  Fulfillment PeriodNov 9 – Dec 31  Rebate Claim Due DateFebruary 15, Holiday Mobile Shopping Promotion Program Dates

Confidential/Internal Use Only Holiday Mobile Shopping Promotion Program Goals Encourage innovation Generate awareness of how an integrated direct mail campaign can increase response rates Highlight and accelerate best practices in integrating mobile commerce and direct mail Acquire new customers Drive long-term product value for direct mail Receive greater visibility for Postal Service shipping options Encourage mailers to use Priority Mail as a fulfillment option

Confidential/Internal Use Only Holiday Mobile Shopping Promotion  Smartphone growth  100 million in 2012, 200 million by 2016  Double-digit growth next 4 years  Mobile internet usage increasing 75% by 2016  Mobile sales growth  Second fastest growing mobile activity  From 5.5% of e-commerce sales 2010 to 11% in 2011  Prediction: Within 5 years, 50% of U.S. shoppers will shop on mobile devices eMarketer2012 Mobile Commerce — growth comScore 2012 MarketingProfs 2012 ABI Research 2010

Confidential/Internal Use Only 5  Short-term promotion to drive the Holiday Shopping Season (Post Election), building a link between mail and mobile  Timing: November 7-21, 2012 Leading up to “Black Friday”/’Small Business Saturday”/ “Cyber Monday”  Background:  Explosive growth of smart phone users: 100 m users in 2012 and forecasted to double by 2016  64% of owners now use their phones to shop online Adoption and frequency will increase as: Mobile functionality improves Online retail shopping sites are mobile enabled  How It Works: Two Opportunities to Save 1.Retailer receives 2% discount on First Class and Standard Mail  Key requirement: mobile barcode enables mobile shopping  Items are purchased from the Smart Phone 2.If retailer uses Priority Mail w/Del Con for delivery of merchandise, they may receive 1% discount on Mail Step 3: Step 1: Step 2: Program Overview 2012 Holiday Mobile Shopping Promotion

Confidential/Internal Use Only 6 Provides business mailers with an upfront two percent postage discount on Standard Mail® and First-Class Mail® letters, flats and cards (presort and automation) that include a mobile barcode or print/mobile technology Mobile barcode that can be read or scanned by a mobile device and leads the recipient to a mobile optimized shopping website The technology must lead the recipient to a webpage that allows the recipient to purchase an advertised product on the mobile device Sale of services DOES NOT qualify for the promotion Mailers may also qualify for an additional one percent rebate on the postage of their qualifying mailings if a portion of their orders are fulfilled via Priority Mail® Del Con between November 9, 2012 and December 31, Program Description 2012 Holiday Mobile Shopping Promotion

Confidential/Internal Use Only 7  Up front 2% discount on Standard Mail and First-Class Mail® pieces that include a two dimensional barcode that can be read or scanned by a mobile smart phone and/or linked to a personalized URL.  An additional 1% rebate (on mail) is available if the Priority Mail Del Con shipment threshold of 0.5% of the mailing is met  Direct Mail piece must contain the following:  Mobile barcode that is two-dimensional and readable by a smartphone.  Mobile barcode must link to a mobile optimized website that allows the user to purchase a product Program Requirements 2012 Holiday Mobile Shopping Promotion

Confidential/Internal Use Only 8  Must use eDoc (mail.dat, mail.xml and Postal Wizard)  Postage paid using a Permit Imprint, Meter or Precancelled Stamps permit  Advance registration required (potential to re-enroll current participants)  Mailer agrees to participate in a survey  Promotion must be claimed in electronic postage statement submissions  All mailpieces in a mailing statement must meet program parameters  IMb barcodes required for any pieces claiming automation discounts (no POSTnet barcodes) Additional Program Requirements 2012 Holiday Mobile Shopping Promotion

Confidential/Internal Use Only 9 Financial Transaction Requirements Must be able to complete the purchase through  Electronic payment method (credit, debit or prepaid card) via mobile internet browser  Through a person-to-person payment method (ex. PayPal) via mobile internet browser  An order placed on the mobile device through the internet where the customer is invoiced at a later date (presumably upon delivery)  An order placed on the mobile device through an internet browser where charge is added to a recurring bill Definition of Product  Defined as a tangible and physical item that can be purchased and shipped via a shipping solution, example Priority Mail w/Del Con  Products do not have to be shipped using the USPS, but the customer will not be eligible for the additional 1% rebate without meeting the 0.5% threshold  Product may have an intangible service component, but sale of a service alone will not qualify  Product in exchange for a donation does not qualify  If a product can only be shipped to another business location (e.g. online ordering for in-store pick-up), the mailing will not qualify Program Requirements

Confidential/Internal Use Only 10 Fulfillment Rebate Fulfillment Period: November 9, December 31, 2012 Rebate Claim Period: January 1, February 15, 2013 Rebate Amount: 1% of discounted postage Fulfillment Threshold: 0.5% of discounted volume Priority Mail Fulfillment Rebate  Mailer must send Priority Mail Del Con packages with a unique trackable barcode during the fulfillment period.  To claim the rebate, mailers must demonstrate that during the Fulfillment Period, the number of Priority Mail Del Con packages delivered to customers exceeded 0.5 % threshold

Confidential/Internal Use Only 11 Sample Rebate Calculation Program Period - Discounted Mail volume100,000 pieces Total postage prior to discount$21,000 2% Discount Applied$420 Total Postage after Discount applied$20,580 Fulfillment Threshold - 0.5% of Discounted Mail volume 500 packages Actual number of packages fulfilled via Priority Mail with Delivery Confirmation (11/9 – 12/31) 1,225 Additional rebate earned$210 If the mailer sent less than 500 packages via Priority Mail with Delivery Confirmation during the Fulfillment Period, they would not be eligible for the additional 1% discount.

Confidential/Internal Use Only 12 Mailpiece Example Barcodes next to each clothing item Scan with smartphone Mobile optimized checkout page to enter payment info and finalize purchases Scan Here Directional Copy

Confidential/Internal Use Only 13 A: Yes.  Mobile-friendly means that the webpage is formatted to fit within a smartphone screen (and thereby avoids the need to reduce text size or scroll horizontally to view the entire page).  Mobile optimized is a different version of the webpage that is designed specifically for small smartphone screens. Mobile optimized sites have:  more compact layout  less copy  Fewer/smaller images  streamlined navigation Mobile-Friendly vs. Mobile-Optimized Q: Is there a difference? Mobile-friendly sites do not qualify for the promotion discount. In order to qualify for the promotion the website must be redesigned for mobile viewing. If the website is merely shrunk to fit a smartphone screen, but other changes have not been made, it will not qualify for the discount.

Confidential/Internal Use Only Google shows 57% of users won’t recommend a business if it has a poorly designed mobile site, while 40% will turn to a competitor’s site after having a bad mobile experience. DMNews.com, “Pinpointing Mobile Search,” July 2012 Importance of Mobile-Optimization

Confidential/Internal Use Only 15  Program Office contact:  Program Requirements & Documents  Articles and link to registration:  PostalOne Help Desk: (800) or More Information

Confidential/Internal Use Only 16 Mobile Promotions July-Aug 2011July-Aug 2012Nov Mobile Barcode Promotion 2012 Mobile Commerce and Personalization Promotion 2012 Holiday Mobile Shopping Promotion (PRC approved) 2013 Promotional Calendar (Several promotions under consideration) Encouraged first use of mobile barcodes Increased barcode use from 1-2% to 34% STD Mail (2B pcs) and 5% FCM (188M pcs) Mobile barcode or PURL linked to mobile-optimized purchasing site As of 8/13/12: – 24,400 mailings – 2B mailpieces – 93% STD Mail volume (93%) Mobile Promotions