Tag Archives: UPS

Culture, Economics, Marketing

Along The Amazon: The Real Invasion

The Brown Marmorated Stink Bug: perennial invader.

For the two previous summers, our community has been infiltrated by legions of quietly intrusive stinkbugs.  They seemed to magically appear, just out of the corner of our eyes, posing on a wall or lampshade.  

Amazon Prime van passes the broken shell of a Macy’s store.

Little did we know that these were just the first wave, doing reconnaissance for the main invasion: Amazon. Now, virtually on every street, at every corner, we catch a glimpse of an Amazon delivery truck slipping in and out of view.

Amazon first broke into our consciousness in 1995 with a simple concept: a place to buy books online.  Their ads claimed access to all of the world’s contemporary literature available, and their warehouse was in outer space, “The World’s Biggest Bookstore”.  We might have listened.

Today Amazon is the world’s second largest company, by market capitalization, following Microsoft, and just ahead of Apple.  It has the world’s second largest retail sales volume, following Walmart.  

Barbarians at the gate: Amazon vans use shuttered Macy’s parking lot in Northbrook, IL.

It has up-ended the retail business model.  In 1997 3% of its sales were attributed to third party sellers.  Today, 58% of its sales come from third party.    In response, 2019 saw the closing of 9,300 big brand retail stores in the U.S.  The shift will continue.

The most physical sense of Amazon’s presence is its growing fleet of delivery vans.  In 2019, Fedex and UPS and the United States Postal Service delivered approximately 13.9 billion parcels in the United States.    But on its own, Amazon dropped 2.5 billion pieces at our doors.  According to Morgan Stanley, that will increase to 6.2 billion in the next 3 years.

The Amazon convoy. Dispatched regularly in 10-15 vehicle sorties on Butterfield Road.

I remark on these stats primarily because we watch the daily procession of Amazon trucks that travel Butterfield Highway, between Libertyville and Mundelein. The company has leased space to stage its fleet in an available lot on Technology Way on Libertyville’s west side.   There, independent owners and employees are regularly dispatched in squads of 10-15 vehicles at a time to head south to Allanson Road in Mundelein where they will pick up their allotted parcels for delivery.  The system is efficient, and it is supported by a good road, courtesy of Lake County.

Staging area in west Libertyville.

Just over the Illinois/Wisconsin Line, there is a vast Amazon distribution center off of US Route 94.  It measures several football fields in size, plus parking lot.  Not coincidentally, directly across the highway sits an equally large U-Line facility that makes shipping boxes. One wonders if there is a tunnel.  According to Amazon’s 2018 statements, the company has 230 million square feet of fulfillment space.  Its premises house nearly 650,000 employees.  One might also wonder how many of those people used to work for Sears, Macy’s, Pier One Imports, Abercrombie & Fitch, Office Depot, Victoria’s Secret, The Gap, and Payless Shoes.

This is not a critique of Amazon in any way.  The company’s mission statement is in part to serve a “customer-centric obsession”.  To that end, it has grown from simply books to sales of more than 100 million items.  Its website lists not a few business diversifications, but a vast portfolio of divisions relating to fashion, video streaming, groceries, pharmaceuticals, publishing, music, movies, web services, home automation and home security.

We can mourn the loss of the local store, but we have gravitated toward a business model that for much of our wants and needs, is just plain easy.

I wish I could feel as good about the stink bugs. 

 

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direct mail, Marketing

How Naked Wines Grabbed Me Fast

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Shutterfly books enclosed, along with some very attractive package inserts.

Attending a direct marketing conference in 2012, a confederate sat across from me at dinner and said, “You know where the real money is? Package Inserts.”

Totally hooked on direct mail through the USPS, I had no idea what he was referring to.

He placed a finished lamb lollipop on his plate, wiped his hands, and drew on a full-bodied cabernet that we had supplied for his enjoyment.

The “PI Guy” went on to describe how he identified ripe consumer markets by the goods they received in their mail boxes and doorsteps.

“A mail order buyer spends $150 on cashmere sweaters and nightgowns from Lands End.   They are a perfect fit for an offer of another product worth $150, say, home furnishings or specialty foods.  You should try these stuffed mushroom caps; they’re exquisite.”

“Yeah, so the buyer…?”

He eyed a medley of greek olives hiding on his plate.  “Well, they clearly trust direct mail, and mail order, and they are willing to spend $150 with a complete stranger by all definitions.”

“You have a qualified, high spending prospect?” I suggested.

“Bing!   So I include a sales offer in those delivery packages from another marketer.  These are called package inserts.   And the buyers are highly responsive.”  The olives were popped into his mouth like Cheerios lining up for the bowl.

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My Mom’s book, a prized collection bound into print.

Fast forward to March 2015.   I had just finished designing a book displaying 100 images of my mother’s water colors.   I had sent the files to Shutterfly, and after some edits and second runs, had spent $500 on a number of beautiful editions of “Nancy Brown”.

When the books arrived on our doorstep, I was excited.  Opening the box, I set aside a handful of coupons to get at the books.   Later, as I was collecting all the packaging, I looked at the coupons– package inserts– to see an incredible bargain from a company called Naked Wines.

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A ridiculously attractive offer from Naked Wines, by way of Shutterfly.

Naked Wines included a $100 discount off a case of wine.   Shutterfly threw in another 25% if I acted fast on the offer.   Before I knew it, I had registered with Naked Wines, and ordered their starter case.  12 bottles, $75.

Naked Wines immediately sent me an email saying I had joined a select group of “Angels”.   More on that later.  The wine was promised to arrive soon.

Yesterday I found a giant box from Naked Wines on our doorstep.  As promised, 12 bottles were inside.

The power of package inserts can’t be denied.   They are meeting the buyer at the point of actual delivery, who is flushed with the excitement of their purchase.

Visualize the moment:  your shopper, opening a heavily branded container, sees the object of their desires and congratulates themselves for being an independent-thinking, smart spending, shop-at-home consumer.   Simultaneously, they flip through a set of offers targeted at their jugular: quality, self-indulging items that belong beside the initial purchase.

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Naked Wines delivers! 12 bottles, $75 bucks.

The Naked Wines delivery did not disappoint when it arrived.  12 bottles for $75 bucks…how could it?  But more about their deal another day.   The big winner was the package insert guy who tied Shutterfly and Naked Wines together to find me in a moment of oenological weakness.

This is a huge business opportunity.  And here’s why: between USPS, Fedex and UPS, Americans received over 7.3 billion packages last year.  That’s about 23 million flushed and excited customers opening their front doors every day to grasp their prize.

The enterprising marketer only needs to find those direct marketing companies who have some cross affinity, and make a deal to provide an inventory of package inserts for every carton that goes out the door.

From there, they wait for the orders to come in.

Thanks for reading!   I have to tell you about the Naked Wines deal.  A marketing achievement, and well packaged too.   But that will wait until next time.   First, I need to examine my purchase.

 

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