Postal Service Delivers Bad News to Retailers
Retailers count on the U.S. Postal Service (USPS) to make deliveries in all kinds of conditions and on most days of the week. But that’s about to change with the announcement this week that the USPS was looking to reduce billions of dollars in operating costs by closing offices and making changes in its delivery practices.
"The biggest challenge retailers will face will be the end to next day delivery service as well as the likely end of Saturday deliveries. In the past, retailers have relied on Saturday delivery service to get new items in their stores for the following week and catalogs to their customers," Kathy Doyle Thomas, chairman of the board for the Retail Advertising and Marketing Association (RAMA) and executive vice president of Half Price Books, told RetailWire.
One of the retailers likely to be affected by changes at the USPS is Netflix.
Tony Wible, an analyst at Janney Capital Markets, told Forbes that despite the company’s move into streaming videos, "The DVD business is the one that is actually driving profits."
Changes at the USPS will create challenges for many others, as well.
"The reality is shopping habits have changed over the last few years, with consumers doing more online research and getting the best prices through retail websites. Because of that, we as retailers have to constantly reinvent ourselves to adapt to the market, often doing more with less resources," said Ms. Doyle Thomas. "Retailers will need to plan in advance for their direct mail pieces. Consumers will receive more mail during the week, so it will be important to make sure to time the mailing correctly and make the creative stand out."
- Postal Service Progresses With Operational Efficiencies – U.S. Postal Service
- Netflix Prepared for Post Office Slowdown – Forbes
Discussion Questions: How do you think changes at the United States Postal Service will affect retailers most? What can retailers do to compensate?