UPS Aims to Strengthen Retailer Relationships as Amazon Looms
As Amazon builds its own shipping fleet, retailers now have 43 million reasons to stick with UPS.
In April 2018, UPS Launched My Choice Deals, a Groupon-like service, that gives its 43 million My Choice App users access to exclusive deals from UPS business customers like Macy’s and Goodyear.
Stu Marcus, UPS vice president of customer technology marketing, told Reuters, “If you are receiving something from Macy’s you’ll have an additional deal from Macy’s right there in your alert.”
This news arrived not long after shares of UPS and FedEx fell in February upon reports that Amazon is launching a business delivery service. Shipping with Amazon (SWA) is testing in Los Angeles and will pick up packages from business customers and deliver them.
For Amazon, shipping costs are a $21 billion-line item, according to the company’s 2017 10-K filing with the Securities and Exchange Commission. And, once a product is in the hands of a third party, Amazon loses control over the customer experience (a challenge not foreign to any business that ships with UPS or FedEx). This was problematic in the 2013 holiday season when third-party services missed deliveries.
The UPS My Choice Deals program appears to mark the first time the world’s largest package deliverer is hoping to cash in on shippers’ products directly, according to Reuters.
It is unclear how much UPS will make from product commissions. But, for a $66 billion company in an increasingly competitive shipping environment, that’s not the only goal.
“These are active customers receiving deliveries, so the customers who signed up for My Choice have already proven they are willing to receive goods and they are willing to order online,” Marcus said. “It is a very active group of customers that shippers want to be engaged with.”
Amazon to Customers: That’s One Return Too Many
The Wall Street Journal reports that Amazon banned shoppers for making too many returns. Given no warning, shoppers found themselves locked out.
Retailers are realizing the toll returns take on the bottom line. A medium-sized company can lose $200,000 in profit every week because of returns spurred by free shipping promotions.
— VeriShip (@VeriShip) June 4, 2018
In an email to RetailDive, an Amazon spokesperson said, “We want everyone to be able to use Amazon, but there are rare occasions where someone abuses our service over an extended period of time. We never take these decisions lightly, but with over 300 million customers around the world, we take action when appropriate to protect the experience for all our customers.”
But, what does it mean for a consumer when the world’s largest retailer has banned you? As Amazon continues to shut down main street businesses, buy up grocery stores, and involve itself in healthcare, it could mean removal from entire marketplaces.
FedEx Bets Blockchain Could Transform Logistics Industry
Blockchain is an encrypted digital ledger that anyone can update, but no one can delete. It’s best known for the technology behind Bitcoin and other cryptocurrencies.
FedEx is betting Blockchain will create a transparent, secure, and streamlined logistics industry.
FedEx is a founding member of Blockchain in Transportation Alliance (BiTA). In an interview with FreightWaves, Dale Chrystie, vice president of strategic planning, said BiTA will develop common standards around blockchain technology in the transportation industry. “We continually try to enhance the customer’s experience, and blockchain is tied to that. We try to make it easy for our customers to do business with us. Since the technology is around making data more secure and transparent, we see that it holds a lot of promise.”
FedEx has motivation to usher in the blockchain era to the logistics industry. In 2017, a European branch of its subsidiary, TNT, was victim to a high profile cyber-attack that cost FedEx $300 million in lost earnings.
In speaking with FreightWaves, Kevin Humphries, senior vice president of IT at FedEx Services, said, “the nature of the distributed ledger and having common definitions & standards is something that is applicable from origin to destination in the supply chain. So, we are pretty hopeful that blockchain will have many use cases,” adds Humphries.
FedEx will develop pilot programs that test and harness blockchain’s potential.