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Revenue Generation Opportunity

Pacific Area Focus Group. Revenue Generation Opportunity. 1. Growing Direct Mail – The Challenge. Today’s Challenge Keeping mail relevant in an online world. 2. Growing Direct Mail – The Challenge. Relevant USPS Solutions for Today’s Challenge.

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Revenue Generation Opportunity

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  1. Pacific Area Focus Group Revenue Generation Opportunity 1

  2. Growing Direct Mail – The Challenge Today’s Challenge Keeping mail relevant in an online world 2

  3. Growing Direct Mail – The Challenge Relevant USPS Solutions for Today’s Challenge • Mobile Technology – Scan codes on direct mail • Data Breach – Communicating during crisis • Political Mail – Campaign and fundraise using mail • Affordable Care Act – Communicate requirements • Every Door Direct Mail – Affordable, local targeting 3

  4. Growing Direct Mail – The Challenge Direct Mail is Relevant! Studies have shown that using direct mail and email in integrated campaigns creates synergies that boost response over using either medium alone. One study showed that using direct mail with email increased response by nearly 30% over direct mail alone. 4

  5. Mobile Commerce • Online sales grew over 26% over 2012 • Mobile commerce sales increased 68% in 2013 to nearly $42 billion • 1/3 of all online sales are made on mobile devices • By 2017, 77% of digital buyers in the US will purchase via smartphone or tablet Source: IBM, Dec. 2013 Source: eMarketer, Sept. 2013 Source: IBM, Dec. 2013 Source: eMarketer, Apr. 2013 5

  6. Mobile Commerce Mobile Technology Helping Drive Long-Term Value • Smartphones and tablets interact with the printed page • Catalog becomes “catalyst” for mobile commence • Catalog integration with technology increases: • Relevance • Effectiveness • Convenience • Responsiveness • Engagement NFC Mobile Barcode Image Recognition Augmented Reality 6

  7. Addressing the Challenge • Political Mail Strategy – Mail drives online and offline donations and provides confidential message to voters - Pacific Area $5.7M in new revenue from political mail YTD 7

  8. Addressing the Challenge Affordable Care Act – Pacific Area – $9.3M in new revenue YTD At a Glance: The Law and the Mail Opportunity Uninsured or Individuals Individuals Individuals individuals that already with planning long - buy their own term care Insured Medicare insurance 8

  9. Addressing the Challenge Every Door Direct Mail – Demographic data enhancement – more targetable and relevantPacific Area sold 331 sales; $14M in new revenue from Every Door Direct Mail sales YTD 9

  10. Promoting First-Class Mail 10

  11. Revenue Growth Opportunity Opportunity in Packages Building a World Class Package Platform 11

  12. E-Commerce Continues to Grow Rapidly Need market share NOW grow with hyper-growth of market 12

  13. The Future of Packages • As ecommerce grows, expectations are being redefined • Free shipping is the new consumer expectation • Faster shipping at the lowest cost is the retailer expectation (Transit times for ground have reduced to 2 to 3 days) • Customers desire later entry times, faster delivery, and delivery on the first attempt • Same-Day and Next-Day delivery are the new frontier 13

  14. USPS Growth Strategy • Our package growth efforts are focused on leveraging the strength of our network to market needs and wants • Meet rising customer expectations in package service and innovation in a rapidly evolving e-commerce world • Capitalize on the power of the mail, package delivery and returns combination • Build a World Class Package Platform 14

  15. Major FY 2014 Initiative Building a World Class Package Platform Objective Build a World Class Package Platform by building a parcel processing and delivery network that supports package growth, weekend and same day delivery, and enhances the customer experience. ELT Sponsor – Megan Brennan Initiative Lead – Dave Williams Gary Reblin Roadmap Roadmap Owner Roadmap Roadmap Owner Improve Customer Pickup 6 Kelly Sigmon Integrated Package Network Plan Dave Williams 1 experience Simplified onboarding & Flexible 7 Pritha Mehra Product Development Plan 2 Brent Raney / Payment Solutions Giselle Valera 3 8 Customer Development Plan Cliff Rucker Package Delivery Optimization Ed Phelan Plan Next Generation Equipment Mike Amato 100% Package Visibility Robert Cintron 4 9 International Package Processing 5 Plan

  16. Build a World Class Package Platform • Price • Service • Information • Payment • Acceptance • Network Processing • Network Transportation • Intelligent Delivery • Improved Delivery Experience • Grow the business • Build a network to meet delivery expectations while handling growth • Innovate and improve delivery • Improve customer experience 16

  17. Requirements to Compete Building a World Class Package Platform Build a World Class Package Platform by building a parcel processing and delivery network that supports package growth, weekend and same day delivery, and enhances the customer experience. • World-class service performance • World-class scanning performance • Forward-looking workforce structure 17

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