UPS stuck its toe into the direct marketing industry on September 28, beginning a test of its insert marketing service in five US metropolitan areas. Industry executives reacted to the program by saying that they do not feel threatened by the move, but are hopeful that UPS’s brand cachet creates opportunities for them.
The Direct to Door service runs until October 2 and includes offers from brands such as Bed Bath & Beyond, Men’s Warehouse and Zappos.com in boxes delivered with, but separate from, customer orders. Brands using the program did not respond to calls for comment. UPS is delivering the packs, which contain about 12 offers apiece, to customers in select ZIP codes in Chicago, Dallas-Ft. Worth, Miami, Phoenix and Washington, DC.
Lisa Lynn, director of marketing and communications at UPS, said that the test program is “a very natural extension of what we do every day.”
“One thing that we have heard from consumers was that the delivery of packages in the box, rather than in an envelope, means they will open it,” she said.
Lynn explained, however, that the program is “not intended to replace direct mail.”
“There is still a very clear marketplace for direct mail, but this is intended to be a direct channel for the retailer to reach the consumer,” she said. “We feel that we have an opportunity based on personalized delivery by the UPS driver. The fact that this is arriving with a purchase should secure a much higher response rate than other media.”
Asked if he considered a permanent version of the program a threat, Jim Zuckermandel, president and CEO of Zed Marketing Group, said that the pilot is “good for all of us that are in the area already.”
“I think that a potential player with as big a name as UPS just adds credibility, and so it’s like an endorsement if you will to this media,” he said, “and it will potentially get more of a spotlight on it and get viewed as more mainstream than it’s ever been.”
Lynn said that part of UPS’ strategy is to take advantage of the personal connection consumers have with the company’s drivers. Customers’ responses to receiving unsolicited offers from a trusted person will in part determine the program’s success, said Charles Teller, EVP at ParadyszMatera.
“Certainly Big Brown has this element of wetting the anticipatory reflexes of a customer. Everybody gets excited when that truck shows up at the door,” he said. “But at the same time, we are talking about an unsolicited offer arriving with someone who is a friend of yours.”
UPS also has access to consumers’ purchasing history that other marketers do not. The program could be successful if UPS uses that data effectively, noted Rob Stanton, VP of business development at Stanton Direct Marketing.
“There is a lot of information there that the marketer wouldn’t really have, that is based on history and also accurate and timely,” he said. “And I don’t know if they have any place to use that information or if it would be easy for them to splice and dice, but they could have a pretty good snapshot, like a credit card company, of buying habits.”
Industry experts who were interviewed all said that insert marketers are not yet in danger of overburdening consumers with offers. However, Stanton said that UPS could face a potential conflict if a consumer receives a package from one company and an offer from one of its competitors in the same delivery.
“A company could see its relationship strained if they were using UPS to send a package and saw that a competitor was working with one of their partners,” he said.
