In a first for a package delivery company, United Parcel Service is giving away samples from major brands to its customers. The company is piloting a program in Chicago, Dallas-Ft. Worth, Miami, Phoenix and Washington, D.C., in which people who get UPS' Direct-to-Door home delivery also get offers and samples from a roster of brands. It is expected to go nationwide in 2010.
The offers will be packaged in a custom-designed "UPS Direct-to-Door Pak" -- white with an image of a UPS delivery van -- and delivered to residents in the test ZIP codes who are receiving a small package shipment that day. Each Direct-to-Door Pak can contain approximately 12 offers and samples from UPS customers.
Brands participating in the program include Williams Sonoma, Bed Bath & Beyond, FTD.com, Pottery Barn, The Finish Line, Sephora, West Elm and Zappos.com.
A spokesperson for UPS tells Marketing Daily that about 12 brands are involved now. "We are asking brands to put in discrete offers you wouldn't get with other marketing channels," she says. Zappos.com, for instance, is giving recipients an invite to its VIP club, whose members get free shipping, among other perks.
The company is not promoting the program at this point, per the spokesperson. "Right now, there's no advertising in place, but we actually will be getting metrics from feedback and talking to customers. Like any pilot, we have to go through evaluation."
The samples will come in a separate, uniquely designed pack. The spokesperson says UPS developed the idea after doing focus-group research on direct-mail marketing that suggested people are too inundated with offers to notice them.
The focus group attendees said they would feel differently about it if a sample package were delivered by hand by a familiar person. "They trust a familiar face, the UPS driver, and they are more likely to accept something from them that's a surprise or gift."
"As marketing channels evolve and consumer choices increase, we need new touchpoints to connect with customers," said Pat Connolly, executive vice president and chief marketing officer, Williams Sonoma, in a statement. "With a UPS Direct-to-Door delivery, we're reaching an active consumer, an important factor for increased response rates."
Do we know if the selection of offers will be customized for each individual customer - or will every customer in a given geography get the same set of offers and samples?
I ask because while the article suggests that the offers will "not being available through other channels", the Zappos.com offer example (invitation to join its VIP club), is something that has already been extended to anyone who is a customer of Zappos. Will the process treat existing customers of a brand any differently than consumers in general?
I would think that to customize the offers to each person receiving a delivery that specific day in the selected zip code would be extremely difficult. When a package car is loaded, it's loaded the night before, which would require scanning the address, matching with the delivery history and then choosing the offer package from one of several options or creating or handling fulfillment on the spot. Now, clearly, I am not on that end of operations so I could very well be overlooking something significant or be unaware of a great tool or process that makes the customization extremely simple. Perhaps if Zappos offers the VIP program to current custmers through its website only and this is the first time that they have made this offer available to someone beyond the web, it's technically not available through other channels.
April - I agree the logistics would likely make customer packages cost prohibitive. I raised the question because the UPS concept sounds like it could have some potential IF the clients can really place viable samples in the box, and IF the offers are truly unique. Calling the Zappos VIP program a unique offer just sounded like a bit of a stretch knowing that it's already been extended to millions of their customers. (And does offering VIP status to everybody devalue what has seemed like a nice perk for existing customers up til now?)
I think this program will have quite a bit of fall-out for UPS. UPS does not have the specific right to give my customer a PAK of competitor promotions. I own that customer's address. They are going to that household because I paid them to deliver my package to that address. They are not delivering indiscriminantly to addresses, but to hotline buyers. No wonder Mr.Connolly is so psyched about this. UPS has crossed the line.
This is a great approach UPS is taking. Special offers, loyalty programs, and percent off discounts are offers that show some of the highest redemption rates. By promoting this new Direct-to-Door-Pak in a few major cities, UPS can track successes and identify which promotions should be implemented later on. Another benefit to this promotion is that buyer power can be reduced and switching costs increased for participating brands.