UPS is much better suited from a pricing standpoint, but also from a consumer standpoint.
My experience is when moving online, they don't understand the detail and knowledge and discipline you must have across the entire spectrum of e-commerce. It is not a pretty sight the first couple of years. It's really a commitment. You have to have the patience and the dollars to wait it out.
Its a matter of money. Their site is very robust. It's a fascinating announcement. Making it prior to the Christmas season leads me to believe they're probably bleeding pretty badly.
It is representative of the industry at large. About 12-to-18 months ago, there was this common belief amongst retailers that in order to have longevity and a long-standing business, we all need to be considering multi-channel operations. This is what consumers are going to demand of us.
You're going to see many more partnerships, and for a number of different reasons. The underlying reason is that we're getting smarter and more competitive.
Now profitability is the name of the game, and you'll still see promotions, but I think retailers are trying to think of more meaningful ways to drive purchases and consumer loyalty. We won't see crazy promotions, but we will see the kinds of promotions you'd expect this time of year.
Right now, UPS is sort of the default choice. If someone comes up with the better mousetrap, then suddenly they won't be so satisfied with UPS. If USPS starts acting like an innovative business, then a lot of people would like to work with them. The Airborne thing also makes a lot of sense.
Our merging with the NRF is indicative of the times too. We actually were negotiating this agreement with NRF 12 to 18 months ago. We realized that the world was converging, and in order for Shop.org to remain powerful and lucrative, we were looking for a more traditional partner as well.
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