USPS Q&A: What Does the Future Hold?
Direct marketers want to know what the U.S. Postal Service plans to do to survive and, hopefully, to thrive in an environment that's increasingly more supportive of its package delivery services than its traditional workhorse, First Class mail.
So Target Marketing interviewed USPS Sales VP Cliff Rucker. He answered all but one question on Tuesday, and delayed answering "Will you raise rates on last-mile services for FedEx and UPS?" until an undisclosed later date.
Delaying the answer to that question falls in line with a Sept. 23 tweet from @DeadTreeEdition, "If you're budgeting postal rates for 2015, get out the Ouija board." The tweet leads readers to a Sept. 22 Dead Tree Edition blog post titled "Postal Rates in 2015 Could Rise or Fall—or Do Both."
So far, FedEx appears to be the only major player in the package delivery space to announce a rate change for 2015. FedEx will increase rates by 4.9 percent on Jan. 5. UPS, which may also raise its rates at the beginning of the year, had no announcements listed on its site. Earlier this year, however, UPS did say new dimensional charges will hit on New Year's Day.
Links are included in the article below, where applicable, to address Rucker's comments about, for instance, Sunday delivery. USPS is partnering with Amazon for many of its new initiatives, including Sunday and daily grocery deliveries. His comment about mobile delivery devices meshes with how USPS carriers are using a postal service iPhone app to track AmazonFresh deliveries in the test city, San Francisco.
Target Marketing: What are your plans, going forward, to preserve USPS competitiveness?
Cliff Rucker: The Postal Service is currently enabling a smarter delivery system through technology investments that include geo-fencing—creating a digital address—for every delivery location in America, and providing letter carriers with greatly enhanced mobile delivery devices. These investments provide better delivery accuracy and visibility, and enable enhanced product and delivery offerings—such as package redirect, improved tracking and text alerts.
TM: How will you optimize for the draw-down in First Class mail and the increase in package delivery?
CR: With all of the changes occurring in the way people communicate, mail is proving to be an especially resilient marketing channel. Its value to America's businesses is increasing due to better data and technology integration.
When you combine these important technology-driven changes with the strength we're starting to see in the economy, there are a lot of reasons to be optimistic about mail's role in America's marketing mix.
- Businesses and marketers are using data to make mail pieces more personally relevant to the recipient through precise targeting.
- Utilizing digital-enhanced mail to make the medium more actionable and engaging.
- Leveraging variable data printing technology to make mail more creative and personal.
- Adopting near-field technology (NFC) as a way to increase customer engagement with mail. With smartphones increasingly offering NFC capabilities, I think we'll start to see this technology become 'THE' way customers use mail to engage with a digital portal.
We're improving how we leverage data and technology—all providing a wider array of products for many customers, prompting them to take a fresh look at the postal service.
TM: How do you plan to grow the package business?
CR: We're seeing momentum in our package business. We expect this business to grow as Sunday delivery becomes essential for anyone trying to develop their e-commerce business. That's been a very positive initiative for us, but we're growing other parts of the package business, as well.
TM: What will you do about the public perception that it's FedEx and UPS that deliver quickly, when it's really you doing it for them? (If you're successful in changing public perception, won't that draw a lot more commerce back to you?)
CR: The postal service can and does compete with the private sector—such as FedEx and UPS—and it collaborates with it, too.
UPS and FedEx pay the postal service to deliver more than 470 million of their ground packages to residences, taking advantage of the postal service's expansive delivery network. The postal service pays UPS and FedEx for air transportation, taking advantage of their comprehensive air networks.
TM: What else do you have to say about USPS initiatives?
CR: We're actively improving the way we serve our customers and the American public. To meet the evolving expectations of a changing world, the postal service is advancing numerous product and service innovations, empowering its workforce and delivery platform, and working with Congress to gain a more adaptable business model that will enable it to compete for customers and better serve the public far into the future.
Did Rucker clear up marketers' questions about the future of the USPS?
Please respond in the comments section below.