• on Nov 25th, 2013 in Pricing & Rates | 1 comment

    Imitation is the sincerest form of flattery, they say. Maybe so. It’s just not usually FedEx that is doing the imitating or the flattering. But with its new “simple and predictable” flat rate shipping option, FedEx seems to be trying to look like the U.S. Postal Service in one particular way.

    The FedEx One Rate bears more than passing resemblance to the popular Priority Mail Flat Rate, suggesting FedEx is shifting strategy to become more aggressive in the light-weight retail package segment it once largely ceded to the Postal Service.

    And yet, the products aren’t identical. For one thing, FedEx One Rate isn’t quite as simple as Priority Mail Flat Rate. Unlike Priority Mail Flat Rate, One Rate has weight limits: 10 lbs. for an envelope and 50 lbs. for a parcel. It also charges based on distance across three zones of travel. Your package is going through more than one zone? You’re paying more.

    Then again, FedEx One Rate comes with free packaging, like Priority Mail, and FedEx is waiving some – but not all – associated surcharges, like residential and fuel surcharges. Customers who find that surcharges add significantly to the shipping cost will likely smile.

    All in all, customers should be well-served by having another retail shipping option this holiday season. The National Retail Federation expects retail sales in November and December will rise 3.9 percent over last year to $602 million - $738 per shopper – and some of those purchases will certainly be gift-wrapped and put in a shipping box.

    While the FedEx product appears less simple, it could have other features that customers might prefer. A customer might find the hours at a nearby FedEx Kinko’s more convenient than the local Post Office. And, FedEx’s enduring image as a reliable shipper might make FedEx One Rate more appealing to some. Still, others might prefer the simplicity and certainty of the Priority Mail Flat Rate, with its one-price-goes-anywhere approach. Too early to tell.

    But maybe you can give us an idea:

    • What are your holiday shipping plans this year?
    • Do you plan to use one of these simplified packaging products?
    • Does convenience outweigh simplicity? Or vice versa?
    • What other retail package services would you like to see? 
  • on Nov 18th, 2013 in Ideas Worth Exploring | 1 comment

    The generation known as Digital Natives – born and raised in the age of the Internet – are said to live much of their lives online in one way or another. Indeed, while use of email is hardly exclusive to their demographic, it’s no coincidence that their rise has corresponded with the decline of mail volume.

    Now that Digital Natives account for the largest segment of the American population and are growing more influential every year in their buying power, it’s more important than ever to ensure the U.S. Postal Service is engaging this group. But do Digital Natives currently see any value in the mail?

    Surprisingly, yes. In our recently released white paper, Enhancing Mail for Digital Natives, we found Digital Natives have an abiding interest in the mail. In fact, Digital Natives check their mailboxes daily. They’re mainly interested in packages – things bought online, of course – but they also like regular mailpieces, especially those that integrate some type of digital technology, like augmented reality. Digital Natives said that if regular mail ever disappeared they would be unhappy for a variety of reasons - citing everything from no more handwritten notes to postal employees who would be out of a job.

    The white paper analyzes results from Digital Native focus groups recently convened specifically to assess current uses and perceptions of the mail. And some of those results are interesting, to say the least:

    • Digital Natives feel an emotional attachment to mail that they don’t feel with digital communications.
    • Digital Natives still appreciate receiving certain types of physical mail that are useful, such as coupons, and are more likely to use them when the hard copy coupon can be uploaded and used through a smartphone.
    • Their anticipation of packages leads them not only to check their mail daily but also look at mail they might otherwise ignore.
    • Digital natives still look at catalogs, but catalogs are more likely to lead to a purchase if they can be scanned by mobile phones or tablets.

    The paper details these and other findings that could help both the Postal Service and mailers develop strategies for making mail even more appealing to Digital Natives, and thus continue to meet current and future public needs.

    Do you agree with the findings of the focus groups, especially if you consider yourself a Digital Native? Let us know what you think. 

  • on Nov 13th, 2013 in Delivery & Collection | 6 comments

    This week the Postal Service announced plans to move into one of the few remaining frontiers of package delivery – Sundays.

    Under a new negotiated service agreement approved by the Postal Regulatory Commission, e-tailing giant Amazon.com will use the Postal Service’s Parcel Select service to ship everything from clothing to garden tools on Sundays. The program is running now in the New York and Los Angeles metropolitan areas, with a rollout planned in 2014 in Dallas, Houston, New Orleans, and Phoenix, to name a few.

    Sunday delivery isn’t exactly new. The Postal Service delivers 7 days a week using the premium Priority Mail Express product. So, what’s really new is the low cost of the service – making it a solid option for consumers.

    Utilizing the Postal Service’s ubiquitous delivery network Amazon.com is able to keep its costs down and, for example, give its Amazon Prime members who get unlimited, free two-day shipping the flexibility to get packages on Sundays.

    The Postal Service faces stiff competition as it seeks to grow its package business and take advantage of the explosion in e-commerce. But it has seen significant gains in its parcel sector through innovations such as flat rate Priority Mail packaging.

    With this latest move, the Postal Service is looking to strengthen its market position in business-to-consumer shipping and to further distinguish itself from its main competitors – FedEx and UPS.

    What do you think of the Amazon.com partnership? Do you foresee operational, staffing or other problems for the Postal Service as it ramps up for Sunday deliveries? Will this be a net financial win for the Postal Service and its customers? 

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