1998 Direct Marketer of the Year - Jay Walker
The Execution. For any lesser salesman than Jay Walker the obstacles for such a scheme would be insurmountable. FedEx was a far more expensive service than UPS, which which meant a a radical pricing shift; further, UPS had 90 percent of the consumer delivery business. It would take a lot of money to put in the new system.
Walker wheedled his way onto the FedEx corporate jet on a flight from Memphis to Seattle where he found himself alone with CEO Jim Barksdale (now CEO of Netscape). He introduced himself to Barksdale and told him that he had an idea that would not only revolutionize Federal Express from top to bottom, but kick UPS squarely in the butt. "If you can kick UPS's butt," Barksdale is reported to have said, "tell me what you have."
Walker spilled 250 consumer catalogs all over the floor of the small jet to illustrate that the catalog industry was huge and then handed out a ream of spreadsheets to show him the business plan. After four hours, Barksdale was convinced that he could leverage a business on top of the catalog business without owning a single catalog or inventorying a single SKU; FedEx gave Jay $10 million to get started.
What happened. Federal Express service is now the staple of just about every catalog and represents $400 million additional annual revenue to the company. December is the biggest shipping month for Federal Express and December 23rd is the busiest day. "Because of what happened, UPS started advertising its brand on TV," Walker crowed. "It was unbelievable!"
Two Hiccups and a Wash
During this period, Walker dreamed up three more startups:
•Hiccup #1: A tie-in with CompuCard (now Cendant) whereby catalog buyers would get free $50 gift certificates for their favorite catalog every time they bought an airline ticket through CUC's TravelersAdvantage. The mailing completely failed; the business flopped.