When it comes to old, stodgy companies innovating, my favorite examples are UPS and FedEx. The Internet could have been a threat to both companies. Email, scanners, and PDFs have combined to make the lucrative overnight letter business a lot less relevant than it was 20 years ago. FedEx (then Federal Express) used to have the slogan “When it absolutely, positively has to be there overnight.” For many documents, overnight just isn’t fast enough anymore.

But both companies have adapted well to the Internet age. Most of these changes have been business-to-business and focused on things like logistics and warehousing. Just-in-time manufacturing is reliant on timely shipping from major carriers. About the only time most consumers notice the sophistication of shipping operations is when they track their iGadgets going from China to Anchorage to UPS’s WorldPort hub in Louisville, Kentucky. There, the package sits until just before the magic date anointed by Apple for release.

UPS My Choice, which launched last year and will likely become more visible this holiday season, is an example of innovation that consumers can see. The service lets consumers track and manage their incoming packages, regardless of who is shipping them. I’ve redirected packages from the beach in Cabo San Lucas.

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My Choice finally allows UPS to develop tighter relationships with its customers. On signing up, customers register their name, address, and email address. When a package is due to be delivered, UPS sends an email indicating that the package is due for delivery. In some areas, UPS will provide an estimated delivery time. (I have never seen this in San Francisco.) If you’re not going to be home, you can electronically authorize delivery or request that it be held at the UPS depot.

The service has a free tier and a $40-per-year option. (UPS provided me a free trial of the subscription option.) The paid tier allows you to see a calendar of expected deliveries, leave instructions for the driver (such as a security code for the door), request that it be delivered to a neighbor, or have it left at one of thousands of UPS Stores. (The last two options are also available a la carte for $5 per use.)

I’ve found delivery to a UPS Store to be the most convenient option. When I see that a package is arriving, I log in and redirect to the store that’s a block and a half from my house. It’s not as convenient as the new Amazon Locker, but it is a nice option to have for packages from other shippers. Although most packages I’ve received could be redirected, a camera I ordered from Sears and a Chromebook I ordered from TigerDirect didn’t have the option to change delivery.

Not only does My Choice make things easier for me, it reduces costs for UPS and is better for the environment because trucks don’t keep coming back to my house constantly. That’s a win all the way around.

There are a few additions I’d like to see for the packages that are too large for me to carry from the UPS Store.  I’d like to be able to say that I won’t be at home all day, so don’t bother making a delivery attempt. I’d also like to get a text message an hour or two before the driver is due at my door. (UPS allows you to select a 2-hour confirmed delivery window, but that’s an extra $5 per use and only available to paid subscribers.) I’d also like to see the calendar set up as a feed that I can import into Google Calendar and iCloud, instead of a separate destination.

Electronic data is a key enabler of My Choice. Because package data (such as shipping address) is sent electronically to UPS separately from the physical package, that data can be crunched to deliver alerts and change the physical routing of the package.

My Choice is an interesting example of value-based pricing. Some of the premium features, such as providing a gate security code or a calendar of scheduled deliveries, have little actual cost to UPS. But there’s also a high degree of value to consumers.

One downside to My Choice: It can ruin surprises. A friend sent me a bottle of wine and I first found out about it from UPS’s email alert.

Rocky Agrawal is an analyst focused on the intersection of local, social and mobile. He is a principal analyst at reDesign mobile. Previously, he launched local and mobile products for Microsoft and AOL. He blogs at http://blog.agrawals.org; and tweets at @rakeshlobster.

[Top image c/o UPS.com]

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