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EcommerceBytes-NewsFlash, Number 3302 - April 15, 2014 - ISSN 1539-5065    2 of 5

USPS Plans to Open Hubs to Retailers Competing with Amazon

By Kenneth Corbin
EcommerceBytes.com
April 15, 2014




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In 2020, when your supplies of milk and butter start to run low, your refrigerator will know to send out a call to the grocery store and, later that day, the Postal Service will show up at your door with fresh provisions.

Sound far-fetched? Not to Nagisa Manabe.

Manabe, the chief marketing and sales officer with the USPS, offered a preview of an array of initiatives that the agency is working on to improve and expand its services through the use of technology, tapping into unused infrastructure and by forging new partnerships.

Appropriately, Manabe was speaking in future tense in a presentation here at PostalVision 2020, a conference focused on imagining how the Postal Service can reinvent itself in the face of dramatic shifts in consumer behavior.

At the moment, Manabe said that the agency is actively looking for ways to build new business lines around what not long ago might have been considered science fiction.

"We are not that far from the point where the refrigerator will simply be able to reorder for you," she said. "You will see us looking to collaborate with grocery chains across the country. We'd like to experiment with grocery delivery, so that's one of the areas where we're looking in earnest."

Similarly, the Postal Service sees enormous opportunities in the increasingly connected world to bolster its advertising offerings. Manabe is looking to tap what in tech circles has become known as big data - the accumulation of massive stores of individual data points that, when mined and analyzed, can yield valuable new insights.

In the case of the Postal Service, it's looking to tap into datasets mapping consumer behavior that retailers could use to hone their marketing strategies. She described the scenario of a woman in the market for a new car, but on the fence about whether to go with the responsible sedan or the sporty coupe. She visits two dealerships and takes both cars for a test drive, but still can't make up her mind.

And there is the marketing opportunity.

"We're at the point where, all too soon ... we're going to know exactly that she was shopping at two different car dealers looking at cars, and both of those car dealers should be mailing her communication about that vehicle, right? And we're there now, folks. I mean, you all know this. There are dozens of folks out there who are supplying that kind of information. If we're not testing and exploring some of that together, we should," Manabe said.

"As we know more and more about how consumers are traveling around and making their decisions, it behooves us to get involved and actually send them information to actually close the deal," she added. "For me, it's all about speed and accuracy of the mail."

Speed also figures to play an increasing role in the Postal Service's plans for packages as it grapples with a model for same-day ordering and delivery. The Postal Service shuttered its same-day experiment in San Francisco owing to what Manabe acknowledged was a poor understanding of the consumer demands of that market. In the time since, the Postal Service has moved that trial east to the Big Apple, a market that appears to be showing more of an appetite for the immediacy of same-day delivery.

"We shut that one down because I think that there was a little bit of lack of clarity in terms of who the customer base was going to be in San Fran," Manabe said. "But we've now opened up that same type of test in New York and are seeing much better results there."

But many shoppers won't be willing to pay a premium for that delivery schedule, where an item ordered in the morning shows up later that day. For those consumers, "same-day" is equivalent to overnight or next-day, where items ordered at, say, 11 p.m. arrive the next day, according to Manabe

"When I say same-day, I mean it from a consumer perspective," she said. "That's really where we've been spending our time, is working on encouraging folks that are shipping to get the packages into us in a form that we can actually then get them out with the next-day carrier delivery. It's obviously the least expensive way for us to deliver your packages."

The Postal Service has other innovations in mind to support the ecommerce segment.

Manabe described the agency's vision for "forward distribution centers," a plan to offer retailers access to unused areas within USPS distribution facilities, making it easier to deliver merchandise in short windows, not unlike Amazon's strategy of opening up new outbound hubs all around the country.

Additionally, Manabe said that the Postal Service is working to make it easier to process returns of orders placed online. That starts with the shipping labels, which Manabe says should be reconfigured within the next few months to include return freight that could be activated when a customer needed to send back an order.

"Let's face it. The more we order, the more we need to return," she said. "It should probably be a round-trip label, so that's what we're working on right now."

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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