United Parcel Service Inc (UPS) told Reuters yesterday that it's in talks with at least one U.S. trucking firm to launch an in-home delivery service for large, heavy goods such as couches and treadmills, as the world’s largest package deliverer looks to cash in on one the fastest-growing segments of online retail. UPS and its rival FedEx Corp. currently deliver parcels up to 150 pounds in weight to a person’s door step, and neither carries packages into a person’s home or handles so-called “white glove” services such as product assembly or installation. UPS told Reuters it's now eyeing the furniture delivery business because Amazon.com, Wayfair, and other e-commerce companies that regularly use its services are competing for market share against chains like Crate and Barrel and big-box stores. A source familiar with the matter said UPS is in talks to hire trucking company Werner Enterprises to help it compete in this area, potentially by the end of the year. Werner, however, declined to comment on the matter, and UPS would not identify who it is in talks with.
Total Retail's Take: It's a smart move for UPS to be thinking ahead to meet the needs of its retail and e-commerce customers that sell furniture. Final-mile delivery is a market that experts say could grow to $12 billion over the next decade, from about $3.7 billion today, thanks in large part to younger consumers who buy everything from BBQ grills and mattresses to dining room tables online. Outsourcing to a trucking firm would also allow UPS to enter into the final-mile business without committing its own capital up front to expand its fleet or acquire end-of-line, final-mile infrastructure such as terminals. Furthermore, the service would give UPS’ retail customers — including Wayfair, Amazon, Walmart, Ikea, and Target — a “big and heavy option” in their online shipping portals so customers can receive shipments across the country. It would also help UPS reach its goal of being a one-stop shipping partner for retailers.
Melissa Campanelli is Editor-in-Chief of Total Retail. She is an industry veteran, having covered all aspects of retail, tech, digital, e-commerce, and marketing over the past 20 years. Melissa is also the co-founder of the Women in Retail Leadership Circle.