Thursday, June 21, 2007

Transcript of BriefingsDirect Podcast on UPS's Wireless Tracking Solutions for Small Businesses

Edited transcript of BriefingsDirect[tm/sm] podcast with Dana Gardner, recorded April 27, 2007.

Listen to the podcast here. Podcast sponsor: UPS.

Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you're listening to a sponsored BriefingsDirect podcast. Today, a discussion about wireless tracking, about how a myriad of devices can be used almost anywhere to track packages and delivery -- be it for retail, ecommerce, or business to business.

We are going to be discussing this with an executive from UPS, as well as someone who uses wireless tracking regularly and is finding it has a positive impact on his business. I’d like to welcome to the show Jeff Reid, the Director of Customer Technology Marketing at UPS in Atlanta, Georgia. Welcome to the show, Jeff.

Jeff Reid: Thank you, Dana.

Gardner: We’re also talking with Robert Wolfe, the co-founder of Moosejaw in Madison Heights, Michigan. Welcome, Robert.

Robert Wolfe: Thank you.

Gardner: We want to find out more about the use of wireless tracking, why it’s important with today’s younger generation -- a more mobile technology-oriented generation -- and the benefits it brings from both a business and technological point-of-view. Let’s go first to Jeff. Tell us how long UPS has been offering this wireless tracking capability, and why did you take the plunge into it?

Reid: UPS has actually been in the wireless business since the early 1990s. We developed our first customer-facing technology in 1999 when we introduced wireless tracking. Today we’re up to four wireless services, including tracking. We also offer the ability to get time and transit information about a package that you’re about to ship. We can also rate a package through our wireless technologies.

Then finally if you need a spot to drop-off the package, you can do that with our drop-off locator.

Interestingly enough, wireless capabilities were introduced internally at UPS in the early 1990s, when we were one of first companies to actually cobble together more than 200 cellular phone providers so that we could provide cellular phone capabilities to our package-delivery vehicles. Our drivers could transmit the information about the delivery that they had just made through their hand-held computers.

So we’ve been in the wireless business for quite a while.

Gardner: Interesting. And now we can use a lot more devices than cell phones. When did you make a leap from a cell phone to the digital side of more of these devices?

Reid: Our wireless services began leveraging most digital devices beginning in 2001. In fact, any device that has short message service (SMS) capabilities or uses Wireless Application Protocol (WAP) capabilities can leverage our tracking services.

Gardner: And these same services are accessible through the World Wide Web as well?

Reid: That’s correct.

Gardner: What kind of information do you find that people are using this for mostly? Is it the same kind of information that you expected when you first got into it?

Reid: Our customers have become more mobile as their businesses have grown, and their lives converge with their day-to-day work activities. So we find a lot of customers are using our mobile capabilities to extend their flexibility and productivity outside of work.

Small businesses and individual users are the primary users of our wireless capabilities. So it is meeting our expectations of who would use the wireless capabilities. Yet it’s amazing how wireless services and our tracking information has made it even onto the golf course nowadays, where people are using it in all facets of their life -- to check on that birthday gift to all the way down to managing their global supply chain.

Gardner: I don’t know how it happened, but I think people just have less time these days than in the past. How about email? People seem to find an easy segue from using email for alerts, and then moving to SMS. Do you find that there is a mix being used?

Reid: Well, fortunately at UPS, we have a whole suite of visibility solutions. Primarily, the solution that customers use with email is our Quantum View[sm] capabilities. That’s where you can actually get proactive alerts about your shipment anywhere within the supply chain.

Customers also use email alerts so that when they do ship a package, they can go ahead and send emails to their customers letting them know that the package is on its way. They use Quantum View for that, as well. So between email and wireless, we certainly have a vast array of different services to provide proactive information in our customers’ supply chain.

Gardner: Is there something different about today’s workforce? I suppose more folks are digitally connected, regardless of where they are. We have the road warriors, but even high school kids -- many of who have their own cell phones -- are connected. Are you finding that companies are trying to reach these end-users, or is it more company-to-company? Tell us a little bit about the type of traffic or type of usage you’re finding.

Reid: The majority of the usage for wireless tracking comes from individuals in small businesses. But UPS had the forethought to think about who would be our future customer with wireless capabilities. And as you will learn from Moosejaw in a moment, a lot of the Generation X and Millennium Generation -- those born after 1982 -- have grown up with a cell phone and with the expectation of mobility as being part of your life.

In fact, I have a nephew who was using UPS wireless service just recently. He had a pair of "shades," as he calls them that were being delivered to his home but he was at his grandmother’s house. Yet he was using wireless tracking to figure when he could go home to get his new sunglasses.

That’s an example of where expectations have changed, there is no inhibition to using wireless capabilities with this younger generation. If you look at the U.S. penetration of cell phones, it's above 75 percent. That’s unfathomable considering that cell phones really just caught on in their early 1990s. So lots of different customers are using our capabilities, but mostly it’s focused on individuals and small business uses today.

Gardner: Right, so using wireless tracking certainly makes a great deal of sense for end-users. They can specifically get information on deliveries they’re expecting, and I suppose it is really important to get your shades on time. But what about the supply chain where time isn’t just convenience, time is actually money.

Companies are using this to compress their delivery times, therefore their product lifecycle times, and are therefore seeing cost savings.

Reid: And certainly at UPS we spent a lot of time thinking about customer supply chains and how we can improve capabilities around goods, funds, and information. We look at our wireless capabilities and its efficiency as the name of the game when it comes to mobile professionals, and such examples as service technicians.

Some of our customers have large-scale service engagements where they have delivery vans out making calls. They require that a part be at a house before they can actually fix an item that they are going to service. So these large companies leverage our wireless capabilities to track a package within the van, so that they can determine whether or not that call will be effective -- if the part has arrived or not. That’s an example of where efficiency throughout the supply chain is being introduced, and wireless tracking is certainly a large component of that efficiency equation.

Gardner: I suppose that that same value can be taken to a factory floor, or an agricultural environment -- out to the farm fields and away from any centralized location. You don’t need to be tethered to a desk and a personal computer.

Reid: That’s correct. Anywhere that your feet take you, wireless capabilities are available.

Gardner: Great, let’s go check out the real-world uses of this. Robert, tell us about Moosejaw, what is its mission, and what do you do there?

Wolfe: I describe us providing high-end outdoor equipment and apparel. Basically if you’re going skiing or backpacking, we’ll have what you want -- and it’s the best stuff. And we have sort of by accident ended up skewing to a very young demographic.

I started the company when I was 21, and had absolutely no clue what I was doing. So when customers would come in the store we were playing Nintendo or whiffle ball, and we asked them to join us. And that ended up turning into our marketing theory. So we really try to connect with the customer on a level that’s not just about the product. So last Saturday, in one of our stores, we had break-dancers for absolutely no reason whatsoever.

So far it seems to be working. We definitely have more high school and college students, not only as our customers but also as our staff. And that’s really how we ended up being so proactive about wireless technology. Because when I look around and see everyone at Moosejaw, they don’t even talk to the people three seats away from them -- they text them. And half of them don’t even use their computers anymore; they just use their mobile phones and personal digital assistants (PDAs).

When we began seeing that internally, we knew that we have to be first-to-market with all of that kind of wireless technology -- and UPS has helped a ton, and not only with traditional tracking. I call it "traditional" even though it’s still pretty new. UPS began helping us all the way to getting tracking numbers tested, which we just started very recently. And it’s already been hugely successful. And when I say, "hugely successful," we have had a lot of people sign up -- but more importantly, the people who have signed up have loved it. It is definitely the college students, and it sort of filled over from in the high schools.

Gardner: Explain to us about the testing. What does that all amount to?

Wolfe: So, instead of having to wait to get to your PC -- an extra half hour to find out where your order is -- it will go right to your phone. The sunglasses example was a pretty good one. Who wants to have to wait an extra hour to find out where their package is going to be?

It sounds funny. You really don’t need to find out where your stuff is at that very movement, but it’s just that the whole idea of being able to use your phone for everything -- our customers expect it. If we are not texting information to them, then we are yesterday’s news. We have to be able to embrace that kind of technology.

Gardner: The expectations now are much higher. Immediacy is really important. I suppose for high-end camping and mountaineering equipment, if you are going on a big trip that you have been planning, you might have just forgotten some last-minute thing, so you are going to order it up. And maybe you’ll intercept it halfway to your destination. And you will be able to know right along the way if that’s going to work for you. Is that a typical scenario for you?

Wolfe: You know, it certainly works in that scenario. But for us it’s really not so much about the practical use of the application as it is about being cool.

Gardner: It’s a lifestyle thing.

Wolfe: That’s exactly right. If it so happens that we sell products that our demographic loves -- and it wouldn’t really matter if that product were coffee mugs -- the fact that we are sending tracking information through a mobile phone is what’s important. Our customers are more likely to tell their friends that they just got their tracking number to their phone telling them when their new sunglasses are coming.

Gardner: Interesting. Tell us how about how you started getting involved with UPS in order to be so cool and be so appealing as a lifestyle to your users?

Wolfe: What happened with us is we started off -- and I am not exaggerating -- that when I would take an order from the Internet it would literally be me calling the phone company and saying, “Okay, I am going to be in our Grosse Point shop today, so point the 800-number to this phone. And I bring my laptop with me, and I bring the Visa machine with me. And then when I went home, I would call the phone company and say, “Okay, I am home now, you can point the 800-number back to my house.” When someone called Moosejaw at 2:00 in the morning, that was me in bed answering the phone, taking an order.

As we grew, we needed to be able to tie orders to tracking numbers. We used to literally have to go copy and paste them into our customers order history, so they could see it. And UPS more than any other company -- and UPS is a big company, so it’s still amazing to me that they can pull this off -- they really guided us through the entire system. That means tying our retail systems to their tracking system. And we talk to UPS, I would say, four times a week because they are so super proactive about helping us embrace what’s coming next.

So it actually went beyond the simply tying the systems together. They actually took us to other companies -- in other industries -- to help us set up a warehouse. It’s really amazing -- both the practical application and just the staff to make us look cool -- that UPS has been so engaged with us.

Gardner: Now, Jeff, that sounds like UPS has figured out that if you help small companies get started, and they grow, that they are going to stick with you. And that’s perhaps a very long-term relationship.

Reid: You are right. Certainly for UPS to scale services for a small company that’s working out of its garage -- all the way up to a multinational company -- it’s important for us to offer solutions that provide uniqueness and that allow our customers to develop a competitive advantage ... just as Moosejaw has done. So we are always on the table with solutions that are unique and are scalable, depending on a customer's size.

Gardner: I suppose it’s not just getting them while they are young, but being on the leading edge of what is expected, both in terms of trends and fashion -- as we have heard about with SMS. It’s quite popular. I have just started using SMS myself more and more. It is addictive, and it does make sense in a lot of ways.

For example, if you don’t need to make a full phone call, or you don’t want to go to email and have to fire-up your PC. Maybe you could explain to us a little bit more about what UPS is doing along these lines? Give us sort of tour of the waterfront now in terms of the services, and maybe even some hints of what’s to come?

Reid: Sure. When we think about global visibility, our job as a transportation and logistics provider is to make sure our customers are able to take advantage of flexibilities to manage their supply chain. Information many times is just as important as what is in the package.

So UPS has always been looking to innovate and bring new capabilities to our customers. And an example of that is our latest solution called Delivery Intercept, where our customers can use their wireless device, or go to www.ups.com, and track a package. At that point they can decide that, “Hey, my customer told me yesterday that they are not going to be at this location any longer, so I need to redirect that package." Or, "I sent the wrong thing, and I need to have it returned.”

With Delivery Intercept a customer can go to www.ups.com and reschedule that package to either be returned to them, or sent to an alternate location. That’s an example of innovation that we are first to market with, and we are always seeking to make sure that we provide productivity, capability for our customers, and increase their efficiency. The demand and interest is there for these services, as Moosejaw has indicated. So we will continue to innovate. That’s necessary.

Gardner: Being able to work that quickly in the field -- I guess you could call it exception management as an information technology term -- that requires a lot of heavy lifting on the back-end that people might not be aware of. Isn’t that right?

Reid: Yes, in order for us to engage a customer with Delivery Intercept, there is a lot of infrastructure that UPS has to have in place. And we spent many years integrating our systems so that we know where that package is at every step of the delivery process. Technology is what has allowed us to drive in that direction; so that we can take our internal technology that we have built and make it available for our customers; to develop value-added solutions for them.

Gardner: Interesting. How far can we scale on this? When I say "scale" I mean we can increase from small businesses to large businesses, but also how about in terms of geography. Is this something just in the United States and North America? What’s the global scale on this?

Reid: Well, if I have to focus only on wireless, UPS has global scale with our wireless capabilities. We have wireless capabilities in over nine Asia-Pacific countries. It’s available in 24 European countries. Of course it's here in the United States and Canada. It’s also available in five Middle East countries, and also in South Africa. So as long as you have a connection in any of those areas, UPS certainly has information that you can consume.

Gardner: Back to you, Robert, at Moosejaw. Are you guys doing international business, and if so, is this wireless tracking of interest there?

Wolfe: I haven’t checked yet, but I would be shocked if our international customers weren’t signing up for it.

Gardner: Which markets are you playing in globally?

Wolfe: Well, Canada. We ship a lot to Europe, a lot to the Far East. So I don’t have specific numbers on that, but we do pretty significant international business, it’s important to us.

One of the things that Jeff was talking about earlier, made me think of the following -- I was in a store the other day getting a new cell phone. The woman in line in front of me did not want to get texting because -- this is actually a true story, believe it or not -- she did not want her kid to have texting on the phone. I interrupted the conversation and basically told her that she was wasting her time, because the kid is going to use it anyway. And she would then have to pay some super-huge fee because she was not signed up for SMS. I told her to just get it. It’s not whether people are going to use it or not -- it’s going to happen. So, for us, we have to embrace that.

Gardner: When it comes to finding a business use for SMS text messaging, it seems a tracking number is perfect because it’s not a lot of visual real estate. It’s just a number. It’s all text. It doesn’t require a whole lot of rendering or anything, and it’s something that people can use personally and in business. I am surprised it hasn’t even been taken up as even further into the business supply chain.

Wolfe: Well, the way we talk about it internally is that we are trying to create the least amount of friction with the customer as possible. What can we do to make the shopping experience the best for the customer? If you give us your email address, you get the tracking number, but it can get lost in a spam filter. So to create the most positive experience, we get them that tracking number and in as many ways -- or the best ways -- as possible. That’s what we need to do as a business. We even are now allowing for people who opt-in to just get text messages.

And we've gone beyond just text messaging for tracking numbers. We are using our opt-in list for texting as a community-building activity. For example, last week one of the people on our marketing team went out with a new girl. They met at a coffee shop. And when he got back, he re-sent a text to our list saying something like, "I just went out with a girl, and I like her. When should I text her to see when she wants to go out again?"

So we texted that to our list, and -- I am not exaggerating -- I would say within a minute we had 40 replies, and they were hilarious. So we’re really trying to use the technology as a way to engage the customer -- not just on the product level with a coupon code -- but just to have as much fun as we possibly can.

Reid: I think that it’s important to note too that the wireless providers are doing their part by bringing down the cost of text messaging. Several years ago, every time you send a message it cost you a pretty penny. And today with bundling and the pricing schemes that they have in place it’s affordable for young users to use it, and for anyone to add this as part of your cellular plan. It’s making another channel to market for businesses like Moosejaw and UPS.

Gardner: It seems like you are able take essentially a customer service function and then extend it to create community dialogue and discussion between not only yourself and your customers, but among your customers.

Wolfe: Yeah, it’s really amazing. And you know what? I just thought when I was telling that story that the person at Moosejaw who went out with the girl, he didn’t say, “When should I call the girl next?” He said, “When should I text her?” I mean, calling wasn’t even an option. So, again, that’s just another example of the importance of wireless text technology. You are not even picking up the phone to call people anymore.

Gardner: Okay, so you are building your community, you are getting some social networking benefits. Do you see any other ways that you would like to use this in the future? Are there other aspects of either texting or these wireless-tracking procedures and benefits that you’d like to take to another level?

Wolfe: Yes, but I can't answer that question now because we use the word "experimenting," and that's really what it is for us. We’re tracking to see if things like a coupon code hit better than a text message about a date, and we’ll continue to try and figure that out. Also our website is now available via mobile phones. So, this is all very new to us.

The fact that people are getting personal digital assistants (PDAs) instead of cell phones means you can use more characters and texting makes more sense. So these are things that we’re just playing around with. The short answer is we’re not sure yet, but it is part of our weekly meeting to figure out what do we do next with texting, and what we can do next with mobile commerce. It’s definitely something that we will continue to play around with.

Gardner: Well, that certainly sounds like the buzzword for all of this -- mobile commerce. Let’s take it back to Jeff. Do you see this as a stepping-stone for UPS to get more involved with the mobile commerce?

Reid: Certainly at UPS we think about bringing new solutions and technologies to market. We want to focus on being where our customers are. So if our customers are in the wireless space, we want to make sure that UPS is right there with them. Anything that you can do at www.ups.com -- the ability to set your own workspace, for instance, we see wireless being the next step. So anytime a customer engages us through any channel, we want to make sure that we have similar capabilities across all the channels that we touch.

Gardner: All right, we’ve talked about a small company with Moosejaw -- and I don’t mean that in a bad way, being a small company -- I mean something smaller than a multinational corporation. But how do big companies get started with this? Is this something you can just go to a website for and sign–up? How does someone without a lot of experience in SMS get started?

Reid: All the information you need to get started with text messaging or wireless capabilities with UPS is available at www.ups.com. The easiest way to get there is to go to www.ups.com and use our search engine to type in "wireless services." And there you’ll see a plethora of information that describes exactly how to get started. It’s very easy ... how you do it, set it up to register your phone with us -- it's a 10-minute process -- and you are ready to go.

Gardner: All this really requires is your cell phone number, right?

Reid: That’s right.

Gardner: Very cool. Do you have any sense of how many of your users are involved with this now, or what the growth pattern is? Is this something that’s been taking-off lately -- or ramping up slowly over period of time? What’s the adoption trend like?

Reid: We’ve seen wireless services more adopted in the last two years than previously. In fact, if you just look at the wireless- or cellular-use patterns in the U.S., it’s more than grown by 50 percent this year alone. If you look at Europe, it grew 60 percent last year, and we're seeing similar patterns with our services -- that it’s growing exponentially each year.

Gardner: Very good. Well, we have been discussing the benefits of package tracking using mobile devices -- and I just want to be clear for our audience, this includes BlackBerries, PDAs and, I suppose, the new Apple iPhone when it's out. This isn’t limited to just cell phones, is that right?

Reid: That’s right, it’s any mobile device that you can connect to the Internet, including pagers, anything that you can text with you can use them to reach UPS wireless tracking.

Gardner: We have been talking about how to follow your packages, no matter where you are, without necessarily being involved with the personal computer or strapped down to your desk. We’ve heard from Moosejaw, a retailer of high-end hiking and mountaineering and camping equipment in Michigan, and its use of UPS wireless tracking.

I want to thank both of our participants. We’ve had Jeff Reid, the Director of Customer Technology Marketing at UPS. Thanks, Jeff.

Reid: Thank you.

Gardner: And Robert Wolfe, co-founder of Moosejaw. Thanks, Robert, for joining.

Wolfe: Thanks so much.

Gardner: This is Dana Gardner, principal analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect podcast. Thanks for joining.

Listen to the podcast here. Podcast sponsor: UPS.

Transcript of Dana Gardner’s BriefingsDirect podcast on UPS's wireless tracking capability. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.