The percent migrating [to e-billing] is surprisingly low.

Our latest trend report, on “The Future of Correspondence,” assesses the enduring role of physical mail in the digital era. One trend we identify is the Fusion of the Digital and Physical—that is, mapping digital elements onto the physical and vice versa. During our research, we spoke to Evan Baehr, co-founder of Outbox, a hybrid-mail service that securely intercepts and digitizes physical mail, allowing subscribers to read, tag and permanently store it digitally. A fan of wax seals and handwritten thank-you notes, Baehr previously worked on the Facebook platform and for PayPal co-founder Peter Thiel, served in the White House and the U.S. House of Representatives, and graduated from Princeton, Yale and Harvard Business School.

What role does physical mail continue to play in the digital era?

There’s different economics and psychologies around the senders and receivers of different mail streams. Bills and statements are interesting in that the senders want to be out of the mailbox. They hate having to do it. It’s roughly 70 cents per bill print and post, and if you look at a company like Verizon, they have 300 million unique accounts in North America, and I think Verizon’s data is about 18 percent of their recipients receive bills in some sort of e-bill presentment generally over email. The percent migrating [to e-billing] is surprisingly low.

Of bills received in the print form, 40 percent actually send a physical check back in the mail, which is pretty stunning. But what it means is there’s a huge portion of people who receive something printed and then they act on digitally. About 87 percent of all mail is consumed and managed by female heads of households. You generally can picture her desk, which is some sort of filing system for paper artifacts, which then inform what she does digitally. [The process] is opening bills, notating them somehow and then acting on them at certain times of the month digitally.

The interesting element of e-bill and statement presentment is the UI and UX: The user experience has led people to fail to adopt or is not driving people to adopt e-bill presentment. Even American Express, which does one of the more elegant bill presentments, from the time you receive an email that your bill is available, you are seven clicks and a login and password away from getting the full PDF version of your bill—as opposed to something arriving at your house. So the user experience pretty much sucks.

What is it about the user experience of physical mail that people like?

One of the interesting things we learned a lot about is actually watching how people use these physical artifacts as a form of task management. So just like you would have a starred system or a priority inbox in your email, people use the physical bills as artifacts or reminders.

It’s very interesting to watch how catalogs are usually perused—they’re held with the left thumb and they’re perused basically backwards. Women do really interesting things with artifacts, like ripping out pages, putting those in folders, dog-earing the corners of pages, writing on them to say “for Christmas gift list,” things like that. The tablet, even with the iPad, has not created a suitable alternative experience to lead people to give up that wonderful medium that is paper, which is this incredible malleable, richly visual, interactive piece of material that in a lot of ways the iPad can’t really compete with.

Our research indicates that people view some forms of correspondence as more meaningful than others. Why do you think this is?

Personal mail is only about 3.5 percent of all mail that people receive. These are the most interesting pieces of the mail stream. It’s the piece of the mail stream that people like the most, they’re most excited about it, but also lament the demise of it.

One experiment we did was we tried to understand why things like handwritten thank-you notes are so interesting and meaningful to people. We took the same message [a thank-you for a dinner party] and tried communicating it across different media, going from the most primitive to the richest. The most primitive would be some sort of plain text, so you could begin with a Twitter DM or a text message. So you have this continuum of about 10 different communication media, all with the same message from the same person, and we learned that the overall variation of the importance, the significance and meaning that was communicated across different forms varied a lot.

The high-end, the handwritten one, communicated dramatically more about the intentionality, the purposefulness, the time taken to do it. You pick up really interesting things around communication that’s embedded in things like handwriting, the flourishes of the salutation or that you chose to use a date. Then you get into things like the selection of the stationery or the paper or the ink color or the use of the stamp or return address, does the envelope have a lining—all these things that we never really thought about that we realized actually explain part of the meaning ascribed to and the excitement people have about receiving personal physical mail.

Digitization seems somewhat inevitable. What do you think deserves to stay in print, and what is best received digitally?

[When] people think about what ought to be digitized, they say things like bills and statements. And then they say, “personal stuff, I love getting my Christmas cards, putting them on my refrigerator, so please keep those in the physical.” We’ve actually started thinking about things that currently reside in the realm of the digital that could be better consumed in the realm of the print. One thing we’ve experimented with a bit is, if our users are Facebook-connected, can we find the most engaged-with photograph they were tagged in or they posted in the previous week or month and then print that on recycled paper as a poster and then they request a mail packet. We deliver them this physical artifact of something from their digital realm.

You’ve probably seen the BERG Little Printer—it’s a tiny little thermal printer. What’s interesting is, if you give permission, then people can tweet you and it will print out the tweet automatically. It’s like a fax machine, so it’s really kind of silly. But there are little things out there around, How do we substantiate in a physical form some vestige, some moment of interactivity that we had in the digital realm?

As we think about that mix of the digital versus the print, the interesting thing about print is that it has the obvious property of physicality, but in our minds it instantiates and gives significance to something visual, like a picture or something in prose form, to something that happens in the digital world.

Our long-term vision for Outbox is that most of the interactivity you’d have with the content, most of the content itself, would be purely digital across all your devices. You’d be able to pay and read bills, interact with commerce—whether it’s coupons, deals or catalogs—manage what brands you’re interacting with, and then weekly you’d get this packet, and it would be basically a packet of joy and it would be things originated by hand. It could be a handwritten note that maybe originally came through the postal mail, and it could be things from your digital life that we think are interesting in a way that it made sense to print it.

And what about the junk mail category?

Most people call it junk mail because it’s not targeted. However, if you give someone a daily deal or a coupon or a discount or something at a brand or a retail store they’ve been before that they’re interested in, it’s delightful, and they’d love to find more ways to get that. Many of our consumers sign up for us so they can unsubscribe junk mail—it’s really that they want to unsubscribe from brands they don’t care about. They actually demonstrate an interest in saying “Hey, there are brands I really care about, there are catalogs I’d love to get—how can we do that?”

There are some people who are just militant or Puritans—“Get me out of all commercial mail”—but it’s pretty rare. People like engaging with print content. The problem is that rarely is it engaging because it’s not targeted.

Many [brands] have built custom iPad apps. Others participate in Zinio or some of the other catalog rollups; many are partnered with Google Catalogs. We’ve talked to a number of people at Condé Nast and other places, and what we’ve found is that engagement in these apps is terrible. You could say maybe it’s because the app is bad, but there are some pretty remarkable ones out there. The Williams-Sonoma one is great: It has videos and all sorts of interesting content.

[However], what we hear from the brands and what we’ve found from interviewing our own customers is that a woman on a Thursday is going to go to her mailbox. She’s not going to go to her app store to see if there’s a new version of the Williams-Sonoma catalog available for download—so it becomes a real problem of discovery. And what we find so interesting about the mailbox is that 96 percent of people check their mail every single day, and it’s a communication channel that through habituation people are expecting both personal content, solicited commercial content like a magazine and unsolicited commercial content as well. That norm or habituation is very interesting, because it’s so different from other digital channels that come to mind.

How does email compare to real-world mail?

The early days of email, before spam filters were particularly effective, was really a sender’s marketplace. Gmail and spam folders and other things have really democratized it in a way that have given receivers total control or a lot of control over their inbox. If you’re a relatively active user of email, you can basically guarantee that you don’t get any unsolicited content.

With postal mail, you’re happy to open random things from brands you’ve never even heard of at rates that are dramatically higher than what you see over email. So the key thing for postal mail versus digital channels is discovery. The open rate is essentially 100 percent on catalogs, because you at least look at the thing if you’re sorting through it to dump in your bin. The other piece on why catalogs will have a challenge going into digital is that you have the user experience angle, which bears out in a few different ways.

How are people integrating Outbox into their daily lives and what opportunities does this behavior provide to brands?

There are two times when people are consuming mail through Outbox. One is the end-of-day habituated routine of like, “I wonder what I got in the mail today.” That is a time of sorting and browsing and consuming. It is not a time of processing, so in the evenings, browsing, sorting, putting into stacks to deal with later. It’s often during the daytime or on the weekends when there’s a time of taking action on those items, which almost always require a laptop or a desktop. Doing transactional stuff on the iPad or mobile devices is really low, we’ve found.

What that means, as you think about the format, is to think about the device and the posture and the situation of the consumer. So, end of day, most people have been in front of a computer all day, so one of the last things they want to do is sit at a desk—maybe they don’t even have a desk in their house, so they’re on the couch, they’re in a relaxed posture, the TV’s on and they’re using a mobile device or possibly a tablet—in that situation, it’s paper every single time. It’s interesting to think about digital saturation from people’s workdays and how that can be complemented or minimized by consuming the paper content after work.

We actually take the direct marketing channel into the home and become the only way that brands can engage physically in houses unless [customers] do something like FedEx or UPS or something. We’re testing ad units where the ad unit could be the size of a tablet screen and it could essentially look like six dresses from Anthropologie targeting a woman who, because we have her credit card purchases, we know she shops at Anthropologie. And then the engagement on the ad unit is actually “Send me this catalog,” so we can create ad units that have a digital and a physical layer to it also.

Another area we’ve experimented with is in sample fulfillment. We’ve experimented with that in the area of cosmetics, for example, so the ad unit can be the features of a beautiful set of lips about new lip gloss or something, and then the engagement with the ad unit is, “I’d love a sample of this.” We’re trying to think about how brands think across the print and the digital. One thing we’ve learned that seems surprising is that brands find it very difficult to match their online customer with their print customer, and so something we have the benefit of doing is merging the digital and the physical person in one and having this platform where we initially engage them digitally but then can also engage them physically.