• on Jun 29th, 2015 in Ideas Worth Exploring | 2 comments

    You know you’ve made it when your company name becomes a verb. That’s where Uber is right now – as in, I’m going to Uber over – following in the footsteps of other companies-as-verbs, such as FedEx and Xerox.

    Uber, the technology company that matches car service to rider, has successfully disrupted the entrenched taxi industry. And now pundits are wondering what might be next for the successful upstart. Recent news articles in Marketwatch and Forbes say it could be the package delivery industry.

    The Forbes opinion piece lays out an intriguing scenario: “Imagine you’re about to leave your office for the day and your phone vibrates with a text from Uber: ‘Your next door neighbor Stella has ordered a dozen cupcakes from the Courageous Cupcakes shop next to your office. Would you mind dropping them off at her house? We’ll credit your account $7.50.’” The author goes on to suggest this type of transaction could be repeated millions of times a day and for any and all types of purchases/goods – the hardware store, the automotive store, the department store, and so on.

    The Forbes piece then asks, “Imagine what would happen if a large ecommerce company used local distribution coupled with Uber rather than centralized distribution and FedEx?”

    Imagine indeed. It’s certainly intriguing and altogether feasible. But Uber, and companies based on a similar model, first have to address some issues that could hinder long-term success. First is a tightening labor market. As the economy expands and better-paying jobs are created, Uber may find it hard to staff drivers. And courts are likely to consider cases asking whether drivers are employees or independent contractors. Also, Uber will have to do a better job addressing passenger privacy and safety concerns. Recent press reports suggest female passengers, in particular, are uncomfortable with Uber having so much information about them.

    Even if this Uber scenario is just a notion, it reminds us that package delivery has become an attractive and competitive business. As consumers do more of their shopping online, everything from groceries to pharmaceuticals to clothing is being delivered to homes and businesses. Traditional package delivery companies find themselves competing with new entrants such as Deliv (sometimes called the Uber of the retail world) and Postmates, a company that operates a network of local couriers. And, don’t take your eye off Amazon.com. It is reportedly testing an Uber-like app that would let it use regular people to deliver packages.

    So, does Uber-like delivery sound like a feasible idea? What impact do you think the service could have on traditional delivery companies? As a consumer, do you see benefits from this service? How else could sellers and traditional package delivery companies serve the growing consumer demands of same day and even same hour delivery?

  • on Jun 22nd, 2015 in Mail Processing & Transportation | 7 comments

    Undeliverable as addressed (UAA) mail is a clunky name for a big problem: Mail not reaching its intended recipient because the address is incorrect, incomplete, or illegible. UAA mail is costly to both the Postal Service and its customers – about $1.5 billion a year for the Postal Service and $20 billion for the mailing industry, according to a report we issued last month.

    But the costs of UAA go beyond just returning, destroying, or forwarding undeliverable mail. For mailers, there are direct costs, such as printing and postage, and indirect costs, such as lost opportunities. A direct mailer has no chance for a sale if the piece never reaches the customer. And an undeliverable invoice either slows down cash flow or, if the piece never reaches its intended recipient, results in no payment at all, as Pitney Bowes notes in a white paper. Furthermore, a company’s customer service costs can jump if irate customers call after getting a late fee for a bill delayed by an incorrect or incomplete address.

    Then there is what some mailers call a customer relationship management (CRM) cost. Address software provider Melissa Data explains, “CRM costs reflect the damage to customer relationships that result from failed communication.” The CRM cost of UAA mail can be calculated a few ways, but the simplest might be to determine the customer’s annual value (say he or she spends $600 a year on a cable bill) and divide it by the customer’s expected response rate (for this cable company let’s say 5 percent). In this case, the CRM cost of a UAA mailpiece is $30.

    Despite concerted efforts by the Postal Service and mailers to reduce UAA mail, it actually increased by 2.1 percent to a total of 6.6 billion pieces from fiscal years 2011 to 2014, our report notes. We found the Postal Service’s strategies to reduce UAA have been ineffective because of how complex the address verification process is and because mailers have to abide by conflicting laws and regulations. For example, companies in the financial and insurance industries are legally required to send mail to the last known address even if Postal Service systems indicate a change of address has been submitted.

    Still, we expect certain Postal Service programs to help. The Postal Service has made it easier for recipients to change addresses online. And on the business mailer side, the Seamless Acceptance program, which relies on electronic documentation, should help by providing greater visibility into data associated with each mailpiece. The data will let the Postal Service associate UAA mail with the sender and provide opportunities to craft entirely new solutions to ensure address standards are met.

    How does UAA mail affect your operations? What other ways could the Postal Service and industry reduce UAA mail? How do you price the lost opportunity of undeliverable mail?

  • on Jun 15th, 2015 in Ideas Worth Exploring | 0 comments

    Talk about getting inside the customer’s head. That’s what we did – quite literally – in our most recent research and resulting white paper, Enhancing the Value of Mail: The Human Response. The insights should help companies better understand the effectiveness of physical advertising mail, particularly as compared to digital ad mail.

    We partnered with Temple University’s Center for Neural Decision Making to study people’s responses to physical and digital media in the consumer buying process, including memory of products advertised and intent to purchase. But instead of just using surveys, which rely on people’s stated or conscious preferences, we also monitored people’s bodies and brains to understand their subconscious response. Known as neuromarketing, this rigorous scientific method uses technologies like eye tracking, heart-rate measurement, and MRIs to measure a person’s subconscious responses to various stimuli, often revealing preferences people don’t even know they have.

    The results could help companies improve their marketing strategies and also help the U.S. Postal Service better understand the effectiveness of ad mail, one of its most profitable products. Ad mail accounted for over $20 billion — or 31 percent of total revenue — in fiscal year 2014.

    Our study builds on work done by the U.K.’s Royal Mail that showed physical media generates greater activity in certain parts of the brain than digital media. Our study revealed some distinct neurological and physiological responses to digital and physical media, including:

    • People have a stronger emotional response to physical ads and remember them quicker.
    • People process digital ad content quicker, suggesting digital ads can deliver a message more efficiently.
    • Physical ads take longer to get one’s attention at first, but have a longer lasting impact for easy recall when making a decision to buy.

    Each medium has advantages that advertisers could tap for different campaigns. But we see this as the beginning of possible additional neuromarketing research into how companies should use digital and physical advertising together.

    Do you think you respond differently to digital ads than you do to physical ads? How can companies improve marketing strategies given how consumers respond to ads in different media formats? What lessons might there be in all this information for the Postal Service?

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