I am lucky to be experienced enough to remember the �milkman.� Today, I can still recall the feeling of excitement that would rush through me when my mother would yell out �the milkman is here!� I would drop whatever I was doing, usually pretending to clean my room, and rush out to the porch to see the lactose luxuries he left in the milk box. By the time I had finished grade school, the milkman was only a memory, and the milk box had become a planter. From then on, I would only run out to the porch for reconnaissance missions at report card time. As the years passed, I have grown to look at the postal carrier as both the bearer of good things and bad things from holiday cards and gifts to bills and report cards. However, with the number of good things increasing, the postal carrier is quickly becoming my family�s best friend. Why? It is simple. E-commerce has enhanced our per-ception of the postal carrier like so many other facets of our lives.
In the Garden of Good, Not Evil
Look at another historically negative perception, �junk mail� or what the USPS affectionately classifies as �ad mail.� The confluence of database technology, one-to-one marketing and the Internet has spawned the most targeted and directed ad mail campaigns ever created. This actually makes me look forward to the mail I receive each day because they are advertisements on products and services I have actually requested. If I have seen a product or service on the Internet or the television and have requested product literature, I not only want it, but I want it now! With targeted ad mail, the amount of �junk mail� is decreasing, resulting in a change of its perception. Another major change in the mailing arena is electronic/Internet bill presentment and payment. I, like more and more people each day, now pay most bills electronically. Therefore, instead of bills, I primarily receive notice of payments, if anything at all. Through this change to electronic bill payment, the volume of mail processed daily will continue to decrease. The rumor mill has it that Internet bill presentment and payment and the decline in ad mail will be the downfall of the U.S. Postal Service. Even the USPS estimates the loss of several billion dollars due to these influences. However, what it loses in revenue from these mail streams, it could more than make up in home delivery. The added benefit will be the perception of good and not evil � when the postman rings. No organization in the world is more suited to take advantage of e-commerce and the home delivery opportunities that it represents than the U.S. Postal Service. When the content of my mailbox becomes 80% to 90% of what I requested, the mailman will be more like the milkman of the new �MAILennium.�
Facing the Challenges
This euphoric vision is not without challenges. We need to read between the lines and discover the key levers that must be put in motion in order to bring this opportunity to implementation. In this article, we will discuss the important issues facing suppliers and customers, making up the e-commerce value chain. We will also examine this value chain from the U.S. Postal Service perspective: What are the concerns and apprehensions of these constituents? What are the logistics, the technology and the systems required for implementation? Where are the benefits derived? How does each element play in the game? When are we going to see this take effect? What are its repercussions? Why will this work? And finally, who will benefit and why?
Suppliers in a Perfect World
In a perfect world, a supplier would deliver 100% of its shipments on time, to the correct client, 100% of the time. The shipments would include the correct contents 100% of the time. The client would be 100% satisfied and in return, would reorder from the supplier 100% of the time. So much for theoretics! In fact, it can be assumed that any one of these elements can be more realistically placed at 66%. At any given time, about one-third of the shipments do not get to the desired recipient, one-third of the time shipments are delayed and one-third of the time clients are dissatisfied. These effects are caused by many circumstances.
Incorrect address information is one of the primary reasons for lost or delayed mail. In fact, some research shows up to one-third of all First Class mail is addressed in such a way that it might not be delivered. Although a great portion of this �undeliverable mail� is still delivered, it most likely will be delayed. A major waste in today�s e-commerce value chain is �undeliverable mail� due to incorrect address information. Today, it is often too expensive to return and re-inventory merchandise. So, some companies actually donate or waste product rather than pay for the reverse logistics. One of the important levers that needs to be enhanced is address verification and ZIP code correction.
Suppliers are constantly striving to achieve greater levels of customer satisfaction, and that requires timely delivery. Whatever the delivery expectation � next day, four days or 10 days � it must be met. It can be very time consuming and costly to prepare shipments in order to take advantage of delivery improvement processes. Space, hardware, personnel, transportation and their associated costs can be overwhelming concerns. The ability to overcome these obstacles is another lever that needs to be moved in order to facilitate rapid and horizontal adoption.
The next lever that needs to be pushed is content assurance. The supplier needs to have more quality checks throughout the process to assure correct content. If customers receive incorrect merchandise, they could become dissatisfied ex-customers. Through the proper information-capturing processes, this can easily be improved.
The last important lever that needs to be moved, from the supplier�s point of view, is tracking delivery, in which delays and problem areas can be identified. The cost of lost opportunity for not meeting timely delivery is of even greater concern, for example, in industries such as financial services where millions of investment dollars hang in the balance.
All of these concerns need to be addressed as well as measured and communicated to the customer. The communication needs to take place in a real-time logistical and customer data-tracking environment. This information can even be integrated into the supplier�s call center management system to close the information and distribution knowledge loop.
Customers Want Choices
As a customer, I want options. Customers want timely delivery with superior quality and accuracy at the best price. They may choose next-day service knowing they have to pay extra, or they might want the lowest cost, understanding the delivery period is longer. On the other hand, they might want something in between � how about the familiarities of First Class mail with next-day tracking, at a cost less than First Class. Importantly, once customers� expectations are set, the supplier needs to meet those expectations. Of course, if the package arrives with the incorrect merchandise, consider this a lost opportunity for the supplier to have met customer requirements. Customers also want the ability to call or go to a Web site and inquire about individual packages. Finally, customers want a convenient return procedure if the need arises.
USPS Has Elements for Success
The important levers for the U.S. Postal Service to continually improve the quality of its service, increase revenue and maintain competitiveness include automation, specialization and differentiation. These are not entirely different objectives from any healthy, growing organization. The difference is in the sheer size and magnitude of the operation. It is one thing to track millions of packages a day � it is far different to track billions. Delivering �perfect mail� as far into the postal mail stream as possible with full automation compatibility is the only way this can be accomplished. Through the workshare concept, the U.S. Postal Service allows expertise to be rapidly assimilated into its process. Finally, the focal point of its detractors, the size of the Postal Service, is also its number one asset. The U.S. Postal Service is ubiquitous. It has spent over 100 years and billions of dollars perfecting �home delivery� � the USPS delivers to every address, everyday.
Partnering for Expedited Delivery
Companies such as SmartMail are envisioned, designed and managed to move the above mentioned levers. Created by industry consultants from both the shipping and mailing industries, financed by innovative world-class investors and managed by an experienced aggressive team, SmartMail delivers this e-commerce promise. Traditionally, the Postal Service picks up, sorts, ships and delivers. Through a strategic partnership with the U.S. Postal Service, SmartMail takes care of the first three steps and allows the Postal Service to do what it does best � deliver to every home, every business day.
James H. Reed is executive vice president of Sales & Marketing with SmartMail LLC. For more information, please visit www.smartmailservices.com.