Wednesday, May 20, 2009

L.L. Bean Says Ye$ to Summer Sale

L.L. Bean expects to mail "at least ten million additional catalogs" this summer if the U.S. Postal Service's proposed "Summer Sale" is approved, a company official says.

"With more advance notice, this number would have certainly been higher," Steve Fuller, Chief Marketing Officer for Bean, wrote Tuesday in a letter to Dan Blair, chairman of the Postal Regulatory Commission. The letter was one of several that catalog and direct-mail companies have submitted to the PRC in support of the Summer Sale, with some agreeing that their participation would be limited by the short time frame to plan and execute the additional mailings.

"I want to assure you that L.L. Bean will do everything possible to maximize our mail volume during this period," Fuller wrote in praise of what he called a novel program. "Final volumes will depend on program details and L.L. Bean's inventory position."

The sale would provide postage rebates of 30% for Standard mail (such as direct mail, catalogs, and retail flyers) sent this summer by large mailers after their mail volume reaches a certain threshold. Each mailer's threshold is based on the amount of mail it sent in previous quarters and is calculated in a way to encourage companies to mail more pieces than usual during the Postal Service's slow summer period. The PRC has indicated it would rule on the proposal by June 4.

USPS officials hope to issue the rebates to mailers' postal accounts by Dec. 1. They have also indicated that the program is an experiment from which they hope to gain valuable information about how to implement other profitable incentive-pricing programs.

The Postal Service's incremental costs for the additional Standard mail would be even lower than the discounted postage, USPS told the PRC in a document filed last week. The Postal Service's delivery network, buildings, vehicles, and equipment will have significant excess capacity this summer, meaning the cost of handling additional mail pieces during that period will be unusually low, it said.

For example, the cost of an additional catalog would be 32% to 67% lower than normal, depending upon the sortation level, calculations presented by the Postal Service show. A discounted catalog with high-density sortation would cost USPS only 2 cents but bring in 11.5 cents in revenue, according to the USPS data.

1 comment:

dr droock said...

It sounds like a smart stimulus part of the stimulus plan.

In the never ending search for signs of intelligent life in the USPS, this seems a good one.