Merchants prepare for possible postal cuts

Share this content:
Postmaster General Jack Potter pushes five-day USPS delivery
Postmaster General Jack Potter pushes five-day USPS delivery

Catalogers and multichannel retailers are beginning to plan their responses to the US Postal Service's possible move to a five-day home delivery schedule. Many companies are determining how to deliver time-sensitive offers to consumers despite the possibility of having one less day per week to do so, according to industry experts.

"Meeting in-home dates is our biggest concern right now," said Joseph Schick, director of postal affairs at printer and service provider Quad/Graphics. "If you have to maintain schedules, it means someone may have to utilize more equipment to get it done faster, and that could lead to moving someone or something to a different plant."

"From a general perspective, every time the Postal Service makes big changes, there are certain things that fall in our laps that cause us to incur costs and manage differently to meet customer requirements," he added. The USPS declined to comment for this story.

Hamilton Davison, president and executive director of the American Catalog Mailers Association, said many of his constituents are only in the preliminary stages of planning for five-day delivery. Maintaining home delivery deadlines is a top priority for those planning ahead, he explained.

"The people that I talk to are paying attention to in-home dates. If you are a multichannel, integrated marketer, you probably have promotional campaigns spanning multiple media, and you want the catalog to arrive at the same time that other promotions are occurring," he said, adding that catalogers have reported delays in home delivery in the past year. "The five-day delivery schedule has the potential to put more pressure on in-home dates. "If you miss a day, you're not just missing a day; you're possibly missing out until Monday."

Multichannel retailers and marketers have months to consider tactics to get offers and catalogs to consumers on time. The Postal Regulatory Commission (PRC), the body that oversees aspects of the Postal Service, has set a timeline for reviewing five-day delivery that could result in a decision by October. Even if the PRC gives its blessing to five-day delivery, the schedule change has many detractors in Congress and the two major postal employee unions.

Jane Glazer, president and founder of QCI Direct, a multi-title catalog and e-commerce company, said she's taking a wait-and-see approach. She added that the service change could pose significant challenges for retailers' shipping operations, as well.

"The Postal Service delivered on Saturdays, and that was one of the advantages of using it. Now they might take away that advantage, and so I have to think twice about how I'm going to ship to my customers if that's the case," she said. "In this day and age of everyone wanting to get things fast, everything is going to take longer."

The service reduction is part of the USPS' 10-year plan to restore financial stability at the agency, which ran a net loss of $3.8 billion last fiscal year. The USPS revised the delivery plan in February to keep post offices open on Saturdays, but to eliminate home delivery and some processing. The agency revised the plan after nearly 40 meetings with stakeholder groups, according to USPS officials. Ruth Goldway, the chairman of the PRC, has told members of Congress they should fix the postal service's retiree health benefit payment system before implementing five-day delivery.

Jerry Cerasale, SVP of government affairs at the Direct Marketing Association, said merchants with time-sensitive sales offers would also have to adjust to a service reduction.

"Grocery and retail stores send our their fliers so consumers receive them on Saturdays, so people will look at the mail, go to the store and go grocery shopping," he said. "They have to think about what the reaction will be if they are delivered on Friday, instead of Saturday, so they are starting to do some tests to see what is the reaction by the consumer."

Sign up to our newsletters

Company of the Week

PAN Communications is an award-winning integrated marketing and public relations agency for B2B technology and healthcare brands. PAN's data-driven approach allows the firm to specialize in public relations, social media, content and influencer marketing, and data and analytics. PAN partners with brands to create unique, integrated campaigns that captivate audiences.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above