From e-commerce to drones, USPS looks for competitive edge

The U.S. Postal Service has always been known for its mail service, but in recent years it has grown in new ways to survive. First was its package service. More recently, it was integrating e-commerce and shipping.

USPS has done that by becoming competitive with other shippers. “We have some distinctive advantages in the marketplace,” said Jim Cochrane, Chief Marketing and Sales Officer for the postal service on week three of Agency of the Month, featuring the U.S. Postal Service for the month of July. “We go everywhere — we knock on 153 million doors every day to deliver the mail.”

While Cochrane admitted his competitors, FedEx and UPS, are very strong in the business-to-business delivery world, he said USPS has a lock on residential delivery. “We travel four million miles and knock on 140 million doors every day. We can deliver there with more efficiency, and in fact, they use us for delivery there hundreds of millions times a year,” he said.

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So where do marketing and sales come into play, when your mandate is delivering the mail? “We are doing video, we run commercials on television, and we place magazine ads,” Cochrane said. “And we are very bullish on our direct mail advertising because the close-rate on that is improving all the time,” he said.

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Cochrane also said, like any other large company, the digital world has become a mainstay of the USPS marketing strategy. “We have a digital component to our advertising; we use SEO (Search Engine Optimization) to improve our chances for internet searches, we are doing social media,” he said.

Integrating traditional media with digital media has become increasingly important to the USPS. “The ads we’re running now are about e-commerce and we stake the claim that we are the largest e-commerce delivery company in the US, and that we support e-commerce in many ways from Amazon.com to the small eBay traders. They are all important to us, and as we say in our tag-line … ’Our business is your business.’”

For Cochrane, the marketing effort goes hand-in-hand with the sales effort. He said USPS employs just under a thousand people working with its large commercial customers. “Whether it’s on the mail side or shipping side, we have a large force working with them, showing them the advantages of direct mail in customer acquisition and customer retention. They are (also) out there selling priority mail as an e-commerce solution,” Cochrane added.

Cochrane said the growth in e-commerce has been a tough place for the traditional delivery companies to make gains. “E-commerce growth is a real headwind for some of the other carriers in terms of the efficiencies involved. The deliveries per mile, and deliveries per stop are important metrics,” he said. “But for us, adding some packages to our mail deliveries makes us a little more efficient. It’s core to who we are.”

What has really changed the delivery market in recent years, according to Cochrane, is Amazon.com, both in terms of customer expectations and customer experience.

He related this personal experience: “I was driving one day and stopped at a red light on the highway and I took a look at my phone and saw I had a message from Amazon with a ‘deal of the day.’ I clicked on it, bought it and put the phone down, waiting for the light to change. As I moved on I had an epiphany that I had just shopped at a red light. That is what Amazon has done to e-commerce in this country.”

More so, Cochrane said Amazon has changed the expectations of delivery time. “When I first got involved in the shipping business, 7-10 days was the norm. Today it’s one-to-two days,” he said.

Cochrane noted that e-commerce has also served businesses by cutting expenses. “You used to receive a catalog in the mail,” he said. “Now you get a snippet of what’s available through the mail, and an invitation to find out more on their website.“ But there is a digital-to-physical component as well. “If you abandon a shopping cart online, don’t be surprised if you get a postcard in a few days with an offer on what you abandoned,” Cochrane said.

What about new technologies? Cochrane said the USPS is always looking at new technology, including vehicles of the future. “You can’t talk about the replacement of vehicles without talking about the potential of autonomous and some driver-assisted technologies,” he said.

And when Amazon announced plans for drone delivery, is that something USPS was considering? “The [Federal Aviation Administration] recently came out with some regulations that put a little damper on the talk of drones,” Cochrane said. But if drones do become a possibility,  Cochrane said that would be a possibility. “We take mules to the bottom of the Grand Canyon to deliver the mail, so maybe drones would be a better solution.”