Will becoming a UPS pickup/drop off point drive craft sales at Michaels?

Discussion
Photo: Michaels
Oct 10, 2019
George Anderson

Michaels is looking to give consumers more reasons to visit its stores beyond a steady stream of coupon deals on arts and craft supplies. The retailer announced that consumers can have packages shipped to them via UPS at more than 1,100 of the chain’s stores. They can also ship packages from the same locations.

The retailer’s decision to open UPS Access Point locations in its stores is all about “providing value” and “added convenience” to its shoppers, said Matthew Rubin, Michaels senior vice president of business development and growth, in a statement. 

“Whether picking up a package from one of our stores, dropping off a pre-labeled return package or shipping off the latest fine art, DIY projects — or anything else you’d like to ship — directly from your favorite Michaels location, we’re here for you every step of the way,” said Mr. Rubin.

Michaels’ deal with UPS follows other third-party pickup/drop-off arrangements at Kohl’s, Walgreens and other retailers.

Kohl’s has credited its deal with Amazon.com with helping to drive increased traffic and sales at its stores. Michelle Gass, Kohl’s CEO, has said about 80 percent of those who drop off Amazon packages go on to shop in the chain’s stores on the same visit.

Walgreens has partnered with UPS rival Fedex for more than two years, offering customers the ability to pick up and drop off packages chainwide.

DISCUSSION QUESTIONS: What are the keys for retailers looking to make third party pickup/drop off deals work? Do you expect Michaels’ UPS Access Point deal to benefit the retailer’s business?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Kohl’s is having luck with Amazon returns, why would Michaels UPS' drop off be any different? Crafters sell/share their creations, which means they need to be shipped."
"Traffic. The target for the third-party pickup/drop off is to increase people coming into the store."
"I wonder what this will do to The UPS Store franchise..."

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19 Comments on "Will becoming a UPS pickup/drop off point drive craft sales at Michaels?"


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Shep Hyken
BrainTrust

Retailers are looking for more ways to bring customers into their stores. If setting up a UPS Access Point brings customers in, then it’s a win.

Bob Amster
BrainTrust

The key is the same as it is in the case of Amazon and Kohl’s. The increased traffic and the consequent incremental sales to those customers that came in to use the service. It could very well work. It could also prove too expensive to run.

Dave Bruno
BrainTrust

Giving people a reason to come to your stores is never a bad thing, in my opinion. And while I don’t think UPS Access Points will drive significant impulse sales (crafting is not typically an impulse business) when people stop in for the UPS services, if Michaels is smart they will employ very savvy visual merchandising and promotional strategies designed not only to make the most of that store visit but to entice people back when they have time to shop and explore all that Michaels has to offer.

Ben Ball
BrainTrust

Handling UPS/FedEx packages is rapidly on its way to becoming part of the base-level services retailers have to offer. Unless the shipping companies voluntarily limit the number of retailers they accept into their program within a geography, the differentiation of offering one of the services for a retailer will rapidly disappear. And I can’t think of a reason for the shipping companies to do that. I wonder what this will do to The UPS Store franchise however.

Georganne Bender
BrainTrust

Indie retailers who have in-store post offices or pack and ship areas say it has improved their sales. Kohl’s is having luck with Amazon returns, why would Michaels UPS’ drop off be any different? Crafters sell/share their creations, which means they need to be shipped.

Michaels has done a great job lately with up front displays and promo aisles. I see more impulse purchases in its future.

Bill Hanifin
BrainTrust

If you agree that a key point of leverage for brick-and-mortar retailers is their ability to deliver high-touch services and create experiences in-store, then Michaels’ deal with UPS makes sense.

My bet is that the pickup/drop-off arrangement will source new customers coming into Michaels stores who in the process will discover the Michaels brand. For existing customers, they will enjoy the ability to get what they need to complete a project and mail it from the same location. That spells convenience.

There may be some non-productive traffic in the store as result of the drop off point, but I believe it will be minimal and not a significant “con” when weighed against the “pros” of this agreement.

Neil Saunders
BrainTrust

This helps drive footfall and that can’t be a bad thing. But it’s not a silver bullet – especially now that more and more retailers seem to be adding this as a solution. Getting the core business to work is what counts and on that front Michaels, while in reasonable shape, still has more work to do.

Art Suriano
BrainTrust

I think having UPS Access Point locations in Michaels is a brilliant idea. Today retailers need to find new ways to get customers in stores, and when you add convenience you have a winner. Customers needing to ship or pick up a package via UPS can take advantage of the opportunity of doing it at Michaels. There will be times when the Michaels location will be closer and more convenient for the customer than the nearest UPS store. And for Michaels, it will get those customers in their store. While there they may browse and pick up an item on impulse. So this is a big win for Michaels, UPS and of course the customer. With the competition we have today, retailers need to be creative and find unique methods for increasing traffic and although having UPS Access Point locations in stores won’t be a game-changer, it certainly will add traffic which means added sales.

Mark Ryski
BrainTrust

Driving store traffic is important to creating sales opportunities and using stores for pickup/drop off is one way to get more people in the store, however, traffic does not equal sales – if retailers spent as much time on converting the traffic into sales as they do trying to just drive more traffic into their stores, they’d be even better off.

Harley Feldman
BrainTrust

Traffic. The target for the third-party pickup/drop off is to increase people coming into the store. The other measure will be, does the additional traffic increase sales? Michaels is betting both will occur, and they will be right.

Bethany Allee
BrainTrust

Having parcel click and collect in a retail footprint makes sense, because 70% of click and collect customers make additional purchases in stores. The current keys to this model are placement and training.

Placement – click and collect should be convenient for both usage and visibility, but not so convenient as to where shoppers aren’t driven into the store.

Training – Kohl’s struggled at first, because their staff needed training on how to use and how to communicate the Amazon process to shoppers. They quickly addressed this gap and it’s helped the in-store process.

Carol Spieckerman
BrainTrust

As pointed out in the article, Kohl’s claims that 80 percent of shoppers that drop off Amazon returns go on to buy more stuff (hence the chain-wide rollout of Kohl’s Amazon return program). Michaels isn’t exactly going out on a limb here and may even be more successful given UPS’ scope.

Heidi Sax
BrainTrust

Step 1: Lure shoppers into your store. Check. Step 2: Get them to buy your products. TBD.

To achieve Step 2, Michaels should: Focus on removing friction from the in-store experience by showcasing locally desirable products (a tall order), level up on display and promos, and find a way to get UPS users in and out quickly while also enticing them to stay in-store a little longer.

Richard J. George, Ph.D.
BrainTrust

Assuming the deals work financially for Michaels, the pickup/drop off option is a no-brainer. Anything that can attract new customers to your operations is a plus. In addition, it gives current customers another reason to visit Michaels. Kohl’s and Walgreens have both had success with such relationships. It’s similar to the no-fee ATM transactions available in Wawa convenience stores. Few people who enter the store with the goal of getting cash leave without spending something.

Gib Bassett
BrainTrust

Giving customers any reason to visit a store outside a crafting or making occasion is a great idea. The inverse of this news though may be just as interesting. UPS is doing this with as many retailers as possible to fend off Amazon’s delivery business. For that reason, retailers competing with Amazon have a vested interest in working with UPS.

Ed Rosenbaum
BrainTrust

Anytime a retailer can bring more potential customers in their store, it is a success. This is another example of a retailer thinking outside of their box. Way to go, Michaels!

Kenneth Leung
BrainTrust

Given the square footage of Michaels stores, a UPS Pickup/Drop off is an easy sell. As long as there is enough personnel to cover, especially around the holiday seasons, it reminds the customers of shipping options for gifts in the craft category with convenient shipping and pickup.

Kai Clarke
BrainTrust

The success of driving more business through their store by including a UPS pickup/drop-off point in each Michaels store will not mirror the success that Kohl’s has had when they joined with Amazon and UPS. It is the Amazon drop-off/pick-up partnership that really adds value and sustained time in the store for the increased customer traffic this brings in. You cannot confuse the massive Amazon numbers with the slight UPS numbers. The next quarter will really bear this out as Amazon drives even more year over year customers through Kohl’s stores.

Brian Cluster
BrainTrust

This was a smart move on the part of Michaels. As part of the first pack of retailers to add a shipping destination of the stores, they will likely receive a bump in traffic albeit less than an Amazon situation at Kohl’s. The key going forward is to have a dedicated team to monitor the progress, continue to learn and communicate their learnings across all stores.

wpDiscuz
Braintrust
"Kohl’s is having luck with Amazon returns, why would Michaels UPS' drop off be any different? Crafters sell/share their creations, which means they need to be shipped."
"Traffic. The target for the third-party pickup/drop off is to increase people coming into the store."
"I wonder what this will do to The UPS Store franchise..."

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