How UPS Is Driving A Customer-First Experience

UPS CMO Kevin Warren discussses the company’s latest initiatives, technologies of interest, and the importance of diversity of thoughts and experiences.

As the holiday season approaches, retailers are poised to grab their share of the multibillion-dollar pie—$143.7 billion worth of sales, according to a forecast by Adobe Digital Insights. Naturally, that will keep shipping companies in their trucks, delivering more packages, faster. UPS has been making sure to keep up with that demand, says CMO Kevin Warren.

Warren, who joined UPS from Xerox in June 2018, is part of a team disrupting the package-delivery company. One of the company’s latest strategies launched this summer, UPS My Choice for Business, a digital platform designed for SMBs for managing and tracking shipments online and via mobile devices. The company has also gained FAA approval to establish a drone fleet to deliver packages to health institutions, and it introduced UPS eFulfillment, an e-commerce platform to manage orders, warehouse shipments, and fulfillment data across multiple sales channels. In addition, UPS announced it will offer Saturday and Sunday delivery and late night hours, and an extended partnership with the U.S. Postal Service on SurePost residential ground service.

“It was the most aggressive extensive commercial announcement that we’ve made in a very long time,” Warren told CMO by Adobe.

Warren spoke to CMO by Adobe about the company’s latest initiatives, technologies of interest, and the importance of diversity of thoughts and experiences.

Can you explain the potential of those four verticals you focused on?

Small and medium sized business is part of the market that really is the backbone of all economies. We want to really lean in and say, “What can we do to make these small and medium-sized businesses more effective and be able to compete with their large competitors?” So SMB, No. 1.

No. 2 was healthcare and life sciences. The stakes of delivering those sort of products on time and the right temperature are a lot higher than some other things. Delivering insulin or delivering an insulin pump or medicine, that has to be on time. It can literally be the difference between life and death.

The third imperative is this phenomenon, this mega trend, of e-commerce. We feel that the emergence of B2B e-commerce is at this early stage, and it’s going to grow very fast. So what can we do on the delivery side?

And then finally is what we call international growth markets. Realizing that most of the [world’s] people live outside of the United States, we see a day where most of the revenue and profits will be outside [the U.S., too].

In e-commerce, delivering products is that critical “last mile” of the retail journey. Is that why you chose to focus on that vertical?

We saw in the market a structural change from things being delivered on two-day air to next-day air. So we grew our next-day air revenue by 30% the second quarter. That really caught people off-guard.

The investments we’ve made in our airplanes and … in automation couldn’t have been at a better time to take advantage of the structural shift of people wanting [their purchases] right away. We’re in position to take care of that, as well as helping small- and medium-size customers … compete and deliver in two days and next-day.

We’re customer-first here, so we just happened to be fortunate that we invested in our capability to be able to deliver things faster … at the same time in which customer demand, particularly from two days to next-day, really started to take off. We were in position to take advantage of it.

You even partnered with the U.S. Postal Service to meet demand.

We know in this world, it’s not as simple as it used to be, where somebody either played one [role) or another. They were either the customer or they were the partner, or they were a competitor. These lines blur. We’re clear: Where our interests align, we’re going to partner like crazy, and where they don’t—well, we’ll do things differently.

Your announcement about My Choice also focused on the program’s mobile-friendly features. Why is that a focus?

Small-business owners and small businesses, in general, are wearing lots of hats. They’re in the office. They’re on the go. They’re moving and balancing work and family. They’re meeting with clients. So the need for productivity, to be able to get things done all the time, is really important. This whole movement toward mobility—we can’t really launch technology without that consideration.

Are you looking at other technologies, such as quantum computing and 5G mobile?

Our chief engineering officer and CIO, Juan Perez, has a road map of technology products and offerings where we’re looking to leverage all of those things where we can.

For e-commerce, more and more shipping is going to be done on digital platforms. So we’re having APIs for our shipping integrated into platforms like Shopify. … We have our APIs so when customers are doing their checkout applications on the platform, UPS is embedded, and they can just click and get the delivery.

We know that the digital aspect of shipping is going to be growing from 2018 to 2023; for SMBs, our research shows while the market will be growing about 1.5%, the traditional part of SMB shipping will decline by 10%, but the digital part will grow by 19%. So we’re all over how we can enable the digital growth and make it make it easier for customers to do business online and integrate their applications.

You replaced Theresa Finley, a longtime UPS executive who retired as CMO. Are outside hires part of a plan to shake up the company?

The decision was made to augment all of this knowledge that we have, a domain knowledge and culture knowledge, with some outside talent, thinking that the combination of the two would make us even more formidable.

Scott Price, our chief transformation and strategy officer, was the first management committee member in 112 years brought in from outside the company. He came in in December of 2017, almost two years ago. I came in six months after that, and since then we’ve brought in others, as well.

The domain knowledge—knowing a business inside and out but also outside perspectives and the diversity of thought and diversity of experiences—we think is going to make us stronger, particularly when we’re in an industry that is changing. That means I’ll probably bring in even new nontraditional competitors.

How does your experience with the transformation of Xerox, where you were chief commercial officer, inform your work at UPS?

[Xerox] had to learn how to compete in an industry with multiple competitors, in which you have to bring out good technology but also be priced competitively. [It also had to realize] that small- and medium-sized customers have different needs than large customers. They buy differently; you have to have different products. We were moving toward all these things and were able to get some momentum going before I left Xerox to come to UPS.

[Xerox’s] ability to be agile and … balance the small- and medium-sized segment with the larger [business] segment, all of those are relevant skills that hopefully I’ll be bringing to the table here.

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