How UPS Is Transforming Its Business

By Bob Johns, associate editor

I recently listened to a great conversation on NPR with Ursula Burns, CEO of Xerox, about the need for companies to transform or be stuck. Xerox has gone from a company that originally aimed to automate the work process, to one that now offer services that streamline the business process as well. Companies that traditionally played in one vertical or technology are transforming into full-service entities that provide multiple solutions in hardware, software, and consulting.

This is definitely the case with UPS, as I discovered while speaking with David Sisco, director of retail and consumer goods at UPS. “UPS recently commissioned a survey through comScore to give a view of perceptions on consumer experience from purchase through post-delivery, and how logistics and UPS play a role,” Sisco said. The results of this survey are helping UPS show companies where they can improve service and grow sales. This consultative approach is a little different than what retailers traditionally expected from logistics providers who generally just sold services that were fairly cookie-cutter.

Although Sisco found that consumers were generally satisfied, there were several areas for improvement that UPS identified as. For example, the company took a closer look at how retailers offer free shipping services. “We saw that a lot of consumers understand there is going to be a threshold to meet to qualify for free shipping,” Sisco noted. There is no one-size-fits-all scenario when it comes to shipping. Some customers are willing to pay for quicker shipping, while others would prefer a range of delivery date options.  Consumers are beginning to seek out exact delivery dates to plan accordingly. UPS found that there are a significant amount of abandoned online carts due to delivery dates. Many of these people are seeking exact delivery dates rather than “two to three days” or “not to exceed five days.”

As UPS has grown its consultative approach to fulfillment, it has added solutions that enable retailers to better manage inventory and direct-to-consumer deliveries. These enhancements are especially helpful when it comes to returns management —one of the lowest-rated categories in the survey. Returns are a pain for consumers, and making the process easier can ensure that even though product is being returned, the customer can still end up with a positive experience. Offering a seamless process to handle the return is essential, and UPS works individually with retailers to implement their own returns strategy in an effective and cost-conscious manner. “UPS even offers options where the consumer can put the return in a mailbox, take it to the post office, give it to a UPS driver, take it to a UPS store, or take it to any retailer that UPS partners with to accept packages,” Sisco said. As retailers strive to engage the mobile consumer, offering more choices and remaining flexible becomes even more important.

With the sheer amount of volume UPS ships, as a fulfillment consultant, the company is able to see trends in retail shipping across channels that retailers may not see. Helping these retailers identify what the consumer is looking for in shipping, and enabling that to be accomplished cost effectively, is key to UPS’ growth and transformation over the past few years.