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EcommerceBytes-NewsFlash, Number 2978 - January 14, 2013 - ISSN 1539-5065    4 of 6

USPS Adding Retailers to Same Day Delivery Trial

By Kenneth Corbin
EcommerceBytes.com
January 14, 2013




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The U.S. Postal Service is poised to add new retailers to an early-stage pilot program offering same-day delivery services to online and in-store shoppers.

The Metro Post service, which debuted in a very soft roll-out the Monday before Christmas with a single retailer - 1-800-FLOWERS.com - on board, will soon add as many as nine new merchants in a program that could eventually offer an enticing delivery option for scores of online sellers while opening a new line of revenue for the cash-strapped Postal Service.

"I would expect that in the next days to weeks - but not months - that we'll be bringing on board additional retailers," USPS spokesman John Friess said.

At the outset, the Metro Post trial is limited to San Francisco, and available only to a select group of large retailers with stores both in that city and other major metropolitan areas around the country. But eventually, if the pilot program proves successful, small sellers who operate on ecommerce marketplaces could participate in the same-day delivery service.

"Our hope is that this platform will set up nicely for those retailers that are seeking out those participating ecommerce platforms," Friess said. "We definitely don't want to exclude anyone."

For the one-year trial program, regulators authorized the Postal Service to partner with as many as 10 national retailers with stores in San Francisco and other markets. The Postal Service set 2 p.m. as a cut-off for purchases eligible for same-day delivery, promising arrival between 4 p.m. and 8 p.m. that evening.

The Postal Service is hardly the first outfit to venture into same-day delivery, what many see as the next frontier in ecommerce. "It is what's next," Friess said.

But the Postal Service, with an unrivaled distribution network, is positioning its service as a more consumer-friendly offering than what many retailers can provide on their own.

"We're not alone trying out a same-day delivery, but a lot of those other platforms have very early cut-off times," Friess said. "That's our goal. The advantage we have of offering that is primarily our network. We're already an elite transportation company."

Amazon, for instance, has rolled out a same-day delivery service in 10 metropolitan areas, but the latest cutoff is 12 p.m., in its home market of Seattle. In other markets, the cutoff times range from 7:30 a.m. to 11 a.m.

For small, online-only sellers, ecommerce marketplaces such as Amazon will be key to their ability to take advantage of Metro Post, should the Postal Service expand the program.

To guarantee delivery in such a short window, the Postal Service needs to ensure that it has quick access to the merchandise, meaning that the retailer must have a physical presence within the market. Like 1-800-FLOWERS.com, the other retailers with which the Postal Service is in late-stage negotiations to bring into the Metro Post trial have stores both in San Francisco and other major metropolitan markets where the program could eventually expand, as well an online store.

So at the outset, the Postal Service is only partnering with large retailers for Metro Post as it works through the proof-of-concept. But if the service shows promise, the Postal Service envisions expanding to include fulfillment centers where small sellers who work with ecommerce platforms might warehouse their inventory. In that scenario, if a customer entered a shipping ZIP code where Metro Post was available, the same-day delivery would appear as a shipping option upon checkout.

Friess declined to address pricing for the service, saying only that Metro Post is "priced competitively." The Postal Service bills its retail partners, who then determine how much to charge customers for same-day delivery.

For the one-year trial, the Postal Service is limited to a total of 200 parcels a day among all participating retailers, though it could ask its regulator, the Postal Regulatory Commission, for permission to expand beyond that mark. The Postal Service would also likely notify the commission if it intends to move the Metro Post program to other markets outside of San Francisco.

USPS officials are currently evaluating other markets, though Friess stressed that the agency is focused on adding new retailers and working out the kinks of the program in San Francisco in the near term. Though he declined to name the markets that are under active consideration, he emphasized that the Postal Service is only considering major urban centers for its same-day delivery service.

"You could probably guess it would be Los Angeles before it was Burbank, it would be New York before it was Scranton," Friess said. "For Metro Post to be an effective revenue model, we'll be focused on large, dense cities for this offering."

About the author:

Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects since 2007, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here.

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