Even though the internet and email have been viewed as enemies of traditional mail, parcel growth continues to rise as a result of the digital lifestyle. As people get busier and grow more comfortable with not only online shopping but mobile online shopping, the number of online retailers delivering physical goods via parcel services continues to rise.
Most retailers want to replicate the physical aspect of shopping and simulate the entire retail experience through the internet. That means that products must be delivered promptly and in experience-worthy packaging, and the parcel industry is benefitting immensely from this trend towards digital commerce.
First Class Revenues Have Reached Rock Bottom
USPS management believes that First Class mail revenues have bottomed out after dropping from a peak of 103 billion in 2001 to 64 billion pieces in 2014 according to an OIG study. This decline is primarily attributable to the internet’s ability to replace the majority of simple mail correspondence. Everything from marketing fliers to bills, legal documents to letters have been replaced by digital equivalents, which has reduced First Class mail to a novelty and a delivery method for basic physical goods that cannot or should not be transmitted electronically (yet). Many industry insiders believe that, after the recent and unprecedented reduction in stamp cost, First Class mail has finally leveled out.
A closer look reveals that many geographic areas have kept their volumes steady over the years. Improving the onboarding of customers, providing incentives through hybrid digital technologies, streamlining and simplifying the customer experience, and focusing on consumer experience are all strategies that can help the Post Office stabilize the core business.
View the Video: How to Stabilize Core Postal Business and Focus on Parcel Growth
Presenter: Tariq Mirza, EVP of Postal Logistics Consulting
Mail Moment is Incomplete Without Flats (Magazines)
In the present commercial mailing ecosystem, flats (magazines) play a critical role. The Periodicals and Standard Class Flats do create an emotional context for the consumers even in today’s digital-centric world. There is something about holding a catalog on clothing or reading a well-designed magazine on sports, politics, or fishing that still resonates with consumers. While the cost of 2 pass and processing Flats is high, Standard Class survived the digital transformation from 1998 through 2013, demonstrating a mere 2% decline. Besides the letter and First Class strategy to stabilize core business through incentives and hybrid digital solutions that increase the ROI, Posts need a Flats strategy. A Flats strategy can be focused on both cost avoidance by utilizing barcode technologies such as Intelligent Mail (IMb®) technology to figure out exact costs per piece in several ways—per plant, per Delivery Unit, per type of entry—and by giving incentives for Catalogs like USPS has been doing and through hybrid digital solutions that enhance the consumer experience for Flats.
Parcel Growth and Revenues
The real shipping growth continues to be in parcels. More retailers are shifting more of their businesses online, and with that trend comes not only a more base demand for parcel delivery but a wider array of shipping options and services.
Organizations can utilize different shippers to deliver a wide variety of services from next day delivery to same-day delivery, Sunday delivery to subscription models, each with its own benefits and optimizations. Each carrier has its own set of optimal parameters from flat rate boxes to bulk incentives which ultimately dictate how organizations should select which carrier to use for a given shipment.
Amazon and other large shippers now offer subscription models where they acquire shipping and handling charges on a monthly basis through guaranteed sales and revenue, which allows them to transfer the efficiency and business benefits downstream to the carrier and consumer. These optimizations are clear and consistent, but there are plenty of more subtle ways to optimize parcel shipping and growth.
Optimizing Parcel Costs and Logistics
Most e-commerce organizations repeatedly ship identical or similar merchandise. With the array of carriers, they can choose from, identifying the most cost-effective and efficient option can feel daunting. By tracking and analyzing rates and experiences across the board, brands can optimize their carrier selections based on any number of criteria.
For example, an eBay power seller who specializes in smartphones may notice that when customers select second-day delivery, one carrier is markedly better at making rapid deliveries at a lower cost, while another is much more cost-effective for standard shipping. Because the seller uses the same packaging for every item, it is clear that these differences are a result of different carriers’ respective specialties, not the item in question. These differences may be subtle and require advanced shipping logistics tools to identify, but every organization with a large e-commerce operation understands the value of maximizing efficiencies of recurring costs.
USPS Intelligent Package barcode (IMpb®) technology platform has enabled a new stream of products and services for the USPS customers, enabling meaningful Big Data that allows the USPS to compete with commercial delivery organizations with speed and cost avoidance enabled by Big Data analytics and decision analysis. Parcel Select is a great example of such a transformative offering from the USPS.
Big Data Makes Small Changes for Big Savings
Every retailer possesses its own set of specialized requirements and logistical concerns, which means that efficiencies can only be achieved through advanced analytics. The parcel industry continues to grow, and businesses are in a powerful position to leverage the competition between carriers to realize savings on every shipment they make.
Postal Big Data is of little value unless you know how to use it—and that’s where the experts at Assurety can help your business. Assurety Consulting and Solutions has over a decade of consulting and custom software development experience within the Postal Logistics industry. Assurety has helped Posts and commercial mailers cut costs across the delivery channels for over thirteen years. Hybrid Digital and Big Data solutions can cut millions of dollars in monthly costs for Posts and delivery organizations and Assurety can help lead the way to improved balance sheets.