UPS hopes to eliminate the frustration of missed deliveries by adding an option for customers to specify when and where they would like their packages delivered.
The Sandy Springs logistics company called the new residential service a "seminal moment in the history of package delivery."
"We're making the missed delivery notice extinct, a fossil from the past," UPS chairman and CEO Scott Davis said.
The service, called My Choice, alerts customers the day before a package is to be delivered. It gives them a four-hour expected delivery window and allows them to sign for a package electronically.
For a $5 fee, customers can re-route packages to a UPS Store or another address. A $40 premium membership allows customers to reduce the delivery window to two hours and give specific directions to a driver as to where a package can be left, including at a neighbor's house.
The new service begins Oct. 3.
UPS, which made 90 percent of its U.S. deliveries to businesses 15 years ago, said 35 percent of its U.S. deliveries are now to homes. This is primarily due to the growth of e-commerce, which increased more than 12 percent last year. In 2010, online sales were $176.2 billion, according to the Forrester U.S. Online Retail Forecast. They are expected to be $278.9 billion by 2015.
"It's an inflection point, it's transformational and it's happening now," Davis said. "Consumers pull what they want whenever they want it."
The move will save money for UPS by reducing the number of return trips drivers have to make, though the company did not have an estimate as to what the savings or the premium membership would do to its bottom line.
"The beauty is we go one time instead of three times," Davis said. "We save an awful lot of miles."
My Choice also has the potential to increase delivery volumes by encouraging people in urban areas who do not have a safe place to leave packages to shop online, UPS chief marketing officer Alan Gershenhorn said.
"This is a growth area for UPS," he said. "We're putting the receiver of the packages in control."
UPS delivers to more than 100 million residential addresses each year, the company said. In a statement, QVC executive vice president of customer fulfillment services John Hunter said the feature will be appreciated by customers who want their purchases from the shop-at-home network to arrive on their schedules.
A UPS spokesman said the company had been working to allow customers to set their own delivery times for more than five years. He expected the new service to change the competitive landscape with FedEx, which does not offer a similar service.
"We're solving a problem out there for many consumers," Gershenhorn said.
