1. | 1 USPS as a Retailer

2. | 2 Retail is Everywhere  58 million retail establishments worldwide account for $8 trillion in sales  Retail is the second-largest industry in the U.S. in number of establishments and number of employees  The U.S. Retail industry generates $3.8 trillion in sales annually, approximately $11,690 per capita

3. | 3 Is USPS A Retailer?

4. | 4 RetailerSales (in billions)Retail Outlets 1 Wal-Mart Stores $348.656,779 2 Home Depot $90.842,147 5 Target Corp. $59.491,487 6 Sears Holdings $53.013,835 8 Lowe’s $46.931,375 9 CVS $43.816,202 11 Best Buy$35.931,170 13 Federated Dept Stores $26.971,360 17 J.C. Penney$19.901,033 18 Staples$18.201,900 20 TJX$17.402,466 Source: National Retail Federation STORES magazine Top 100 Retailers, July 2007 TOP U.S. RETAILERS

5. | 5 RetailerSales (in billions)Retail Stores 1 Wal-Mart Stores $348.656,779 2 Home Depot $90.842,147 5 Target Corp. $59.491,487 6 Sears Holdings $53.013,835 8 Lowe’s $46.931,375 9 CVS $43.816,202 11 Best Buy$35.931,170 13 Federated Dept Stores $26.971,360 17 J.C. Penney$19.901,033 18 Staples$18.201,900 20 TJX$17.402,466 Source: National Retail Federation STORES magazine Top 100 Retailers, July 2007 USPS is a Top-20 Retailer 19 United States Postal Service $17.80 >32,000

6. | 6 The Power of Postal Service Retail  Retail units – more than 32,000  Contract Postal Units – 4,300  Retail counters – 75,000  Retail transactions per day (top 5 products) – over 2.8 million  Customers per day – 9 million  Small business customer – 15x/month, 74% walk- in revenue, avg. transaction = $16.00  Residential customer – 9x/month, 27% of walk-in revenue, avg. transaction = $5.30

7. | 7 What’s Happening in US Retail? 1. Consolidation

8. | 8 USA China US Retail Market Increasingly Saturated

9. | 9 Category Breadth Category Depth Deep Shallow Narrow Wide Consolidation Driving Differentiation EASE Convenience EFFICIENCY One-stop-stock-up-shop Lifestyle Editor ENTICE Source: Management Ventures Product knowledge and service EXPERTISE

10. | 10 What’s Happening in US Retail? 2. Offline Going Online

11. | 11 Multi-Channel Retail  Online and offline are not different channels for different customer groups  Multi-channel shoppers are high-value customers:  Worth 3-5 times more than single-channel customers  Have higher expenditures  More profitable  More loyal  97% want a consistent shopping experience across all channels¹ 1. Source Jupiter Research in eMarketer, March 2006

12. | 12 Top Retail Web Sites, Ranked by Dollars Spent 2006 Holiday Season to Date (Nov. 1 – Dec. 8) 2006 Sales Rank Growth Rate Rank Retail Site 16 Amazon.com 210 Dell.com 37 Yahoo.com 43 Walmart.com 58 JCPenney.com 62 Ticketmaster.com 79 Apple.com 85 VictoriasSecret.com 91 BestBuy.com 104 Circuitcity.com Multi-Channel Retailers Winning Source: eMarketing, Spring 2007

13. | 13 +144% +63% +144% +63% Online Sales in Holiday Season ($Billions) $7.4 $4.9 $12.0 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 20032006 Multi Channel Pure Online 145% Growth 62% Growth Multi-Channel Retailers Winning Source: eMarketing, Spring 2007

14. | 14 Post Office Consignment Stamps at ATMs Vending APC Stamps by Mail USPS.com Package Pickup CPU Call Center Approved Shipper Is USPS a Multi- Channel Retailer?

15. | 15 What’s Happening in US Retail? 3. Multiple Formats

16. | 16  US Retailers Going Multi- Format include:  Wal-Mart  Staples  OfficeMax  Home Depot (Yardbirds)  FedEx Kinko’s  Developing smaller, more urban-friendly footprints to expand openings.  Targeting different stores to different demographics:  Wal-Mart  Starbucks  Best Buy

17. | 17 Is USPS a Multi-Format Retailer?  Store segmentation  Residential and Small business promotional menuboards differ Residential Office Menuboard Small Business Office Menuboard

18. | 18 What’s Happening in US Retail? 4. Digital

19. | 19

20. | 20 Buc-ee’s Gas Stations/Convenience Stores

21. | 21 Digital Shopping Cart

22. | 22 Bloomingdales’ Networked Digital Mirror

23. | 23 I can push pages to your screen and mark it up to highlight product features Face-to-face live expert video kiosks at the consumer point of decision

24. | 24  Automated Postal Center  Quick, easy, convenient way to conduct business  Enhancements under consideration  Digital Signage  Tested in 23 post offices  Will be used in Retail Learning Lab Postal Digital Efforts

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26. | 26 What’s Happening in US Retail? 5. Blurring

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29. | 29 Is USPS Blurring Retail?  Exploring APCs in non-traditional outlets (Albertsons) blurring the line further between retail and postal  Offering a broader array of categories in Retail Learning Lab:  Printing/Copying  Office Supplies  WiFi  Conference room  Seminars

30. | 30 What’s Happening in US Retail? 6. Private Label

31. | 31  Shipping and Delivery Retailers  FedEx: Office supplies, furniture, facility supplies, technology accessories  UPS: Financial services, business services, supply chain services, health insurance, retirement plans  Office Supply Companies  Staples: Computer repair and wireless network installation  OfficeMax: Café, WiFi, magazine library, after- hours networking events, how-to seminars (e.g. print on demand, marketing your business, digital photo printing)

32. | 32 ReadyPost Shipping Supplies  Branded product line  Category management  Increased profit margin

33. | 33 USPS: A Retailer at the Leading Edge  Multi-channel  Multi-format  Digital  Blurring Retail  Private Label

34. | 34 Here’s the Challenge  Managing Trends  Competition  New law  Entrepreneurial spirit

35. | 35 Have Questions After the Conference? Send them to us! uspsretail@usps.gov