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Services are in the Mail (Boxes Etc.)

By Faye Brookman

Now even the service oriented shopping center tenants are looking to become more convenient themselves.

Mail Boxes Etc., the San Diego-based postal services chain that made it easier for entrepreneurs to grow their businesses, is now making it even easier for consumers to find its outlets.

Although the company still seeks sites in strip and anchored centered facilities for its franchises, Christine Mulligan, site selector for Mail Boxes Etc., said the firm is going into nontraditional locales.

"We're working on one in an airport and we've already gone into college campuses," said Ms. Mulligan.

Other spots Mail Boxes Etc. is eyeing include banks or other establishments looking to lease excess space. There is also a Mail Boxes Etc. Express, a stand-alone kiosk, being installed in sites such as hotels.

With this approach, Mail Boxes Etc. is following other tenants such as branded fast food vendors which are also opening in sites with a lot of foot traffic. McDonald's and Pizza Hut, for example, have also made forays onto college campuses.

"We're all about convenience, so we are going where we can be convenient,'' Ms. Mulligan explained.

For Mail Boxes Etc., the strategy to partner with other users is also pre-emptive against retailers trying their own mail centers. Rite Aid, the Camp Hill, Pa.-based drug store chain, for example, has started putting in shipping services called Rite Aid Express in its new prototype. Youngstown, Ohio-based drug store Phar-Mor, on the other hand, has looked to lease out excess space to service providers like Mail Boxes Etc.

In more traditional centers, Mail Boxes Etc. favors merchants with pulling power.

"We like to be near tenants who have a large draw like grocery stores and convenience stores. We don't want our customers to drive all over town," Ms. Mulligan explained.

Mail Boxes Etc. is an attractive retail use for centers because of the well-heeled clientele it lures, Ms. Mulligan said. Sixty percent of its customer base is business-related; 40% is consumer. The chain even offers corporate accounts with perks like competitive retail long-distance service on a month-to-month basis.

However, with the explosive growth of the small home office market, the ranks of those who use the facilities for both are swelling.

"We bring in an attractive consumer base looking for services, not cost,'' explained Ms. Mulligan of the shopper base, which averages 43 years of age and earns above-average incomes.

Mail Boxes Etc. locations are also a nice link to shopping centers, she added, because other tenants can use their services.

Although the company would not reveal detailed statistics, Mail Boxes Etc. had revenues in fiscal 1996 of $49.1 million. Industry experts estimate a typical center produces sales per square foot of about $180.

Already 3,500 units strong, Mail Boxes Etc. has a goal of 5,000 sites by the year 2000. Part of that expansion includes growth in 58 countries. There are currently more than 200 in Canada and 250 in Europe through a master licensing agreement. Today, on the average, more than one new center is opened every business day in the United States and abroad, making it one of the fastest-growing franchise companies in the world.

In addition to scoping out new types of centers, Mail Boxes Etc. is expanding its offerings. Since its inception in 1980 as an alternative to the post office, the firm has gradually added services and products such as mailing supplies. Most now offer copying, packaging, shipping, faxing, money transfers and even passport photos.

Realizing that its patrons like to have services such as Internet connections, Mail Boxes Etc. is adding new profit centers.

The latest additions are in-center computer rentals and automatic teller services. The ATMs will eventually have additional bank services, including loan applications.

Mail Boxes Etc.'s new owners -- the firm was acquired by Washington, D.C.-based U.S. Office Products, a supplier of a broad range of office products and business services -- have also facilitated its entry into new areas.

The goal is to provide everything a small home office dweller might need -- even a water cooler where he or she can mix with other home office customers.

"This is what home office people need -- a place to go and 'hang,'" explained James Canton, a futurist who deals with the work-at-home phenomenon.

"The brightly colored graphics and neon signage help make Mail Boxes Etc. an open environment for those in need of supplies or services," said Ms. Mulligan.

With the added features, Ms. Mulligan said, the typical footprint of 1,200-square-foot to 1,800-square-foot centers is gradually being enlarged.

Currently, the breakout of sales varies by location, said Ms. Mulligan.

"In downtown locations, you do more copies or overnight service,'' she said. "In rural areas, it is more packaging.''

Unlike the local neighborhood center tenants who often cannot afford to promote themselves, Mail Boxes Etc. kicked off a new advertising and marketing campaign featuring "Chuck and Rob'' during the 1998 Super Bowl to help expose its new offerings to home office dwellers, as well as business clientele.

The customer base that will continue to fuel Mail Boxes Etc.'s growth is much like the man who helped found it. Anthony DeSio was seeking a business to run in the early 1980s when he became associated with a start-up business created to provide consumers with convenient postal services.

The first unit opened in La Costa, Calif., in 1980. James H. Amos Jr., president and CEO, is credited with developing Mail Boxes Etc.'s vision for the year 2000 including its ambitious growth plans.