The threat of financial doomsday scenarios at the U.S. Postal Service is forcing retailers to prepare for a day when the U.S. Mail is a far smaller piece of their business plans. Despite the Postal Regulatory Commission having struck down the USPS’s recent attempt to raise rates beyond the rate of inflation, retailers and wholesalers are planning for possible future rate increases, a drop in home delivery to five days per week and fewer Post Office branches, along with the very real possibility that the USPS could run out of money in 2011, DM News says.
David Hay, VP of marketing at multichannel retailer Plow & Hearth, says the company is being proactive in its approach. “We are reappraising our reliance on catalogs as our main marketing vehicle, and we are developing a multi-year plan to reduce our spending on catalogs in relation to other media,” he tells DM News. “We see catalogs as still having relevance to our business, but being a smaller part of the mix than they are now. There are instances where catalogs will continue to be effective, but that proportion is growing smaller and smaller every day, and that’s a big driver for our move.”
The USPS is set to lose about $6 billion this year after losing $3.8 billion in 2009, and the Postal Service has proposed changes to its basic services, DM News reports. It attempted to enact a big price increase, and asked regulators and lawmakers for permission to move to a five day home delivery schedule, warning that the organization might not be able to meet its financial obligations for 2011.