December 10, 2015

Accenture Report Identifies How Digital Disruption Is Affecting the Global Post and Parcel Industry

Accenture Digital Index measures digital readiness of post and parcel organizations globally

ARLINGTON, Va.; Dec.10, 2015 – Digital disruption is affecting nearly every aspect of the global post and parcel industry, from transforming the customer experience and the upheaval of last-mile delivery services to recruiting and retaining digitally savvy teams and leveraging the intelligence from analytics, according to a new report from Accenture (NYSE: ACN).

The report – “Achieving High Performance in the Post and Parcel Industry: Accenture Research and Insights 2015” – is based on a comprehensive analysis of 30 postal agencies and delivery companies across five continents, which together represent about 90 percent of the world’s mail volume.

The report introduces the Accenture Post and Parcel Digital Performance Index, evaluating digital readiness in three key areas: digital strategy (ensuring that digital is represented in strategic plans and organizational vision), digital servicing (assessing and launching digital products and services) and digital enablement (effectively making digital “business as usual” and not the exception). The performance index demonstrates how digital investments are positioning the organizations included in the study for growth and evaluates companies and agencies according to their current digital capabilities.

“Digital technology is the powerhouse,” said Brody Buhler, global managing director for Accenture’s post and parcel practice. “As digital accelerates the pace of market change, high-performing post and parcel agencies are taking advantage of these technologies, including mobility and analytics, to meet m-Commerce inspired new consumer expectations and drive growth in parcel volumes and revenues.”

Digital disruption occurs when new digital technologies affect existing business models. In the post and parcel industry, these disruptions have resulted in new products and services that improve the customer experience – the ability to check package delivery on a mobile phone, for example – as well as new delivery models that threaten profitability and growth.

Since the publication of its first high-performing posts report in 2006, Accenture has conducted ongoing, in-depth research of the industry. Using the Accenture High Performance Business methodology, Accenture has reviewed and assessed the relative performance of delivery organizations. The top five performers, according to the 2015 report, are Singapore Post, Belgium’s bpost, Norway’s Posten Norgen, United Parcel Service (UPS) and Poste Italiane. But the list shifts when calculated based on the Digital Performance Index, with FedEx, Deutsche Post DHL, UPS, La Poste and Canada Post Corp. leading the list.

“On average, companies in the post and parcel industry score better in setting digital objectives and service functions, with greater attention needed for digital customer interactions,” Buhler said. “While successful digital investments to date have focused primarily on cost containment and improving productivity, the focus now needs to turn toward digitizing delivery and harnessing digital to create new revenue streams.”

According to the report, post and parcel organizations need to embrace digital technologies to increase operating efficiency, digitize delivery and create new revenue streams. This new digital strategy will be essential for organizations to meet three strategic priorities necessary to achieve high performance in the market: defend the core mail business; grow the parcel opportunity; and selectively diversify products and services.

The report also states that the Internet of Things (IoT) has the potential to create new sources of revenue for post and parcel organizations, not only by embedding digital technologies within the organizations, but by extending into a broader digital system of customers, partners and connected products. Post and parcel organizations could use the IoT to create new data-driven businesses and improvements in the customer experience. Some organizations have started to experiment with capturing pollution or cellular signal data from sensors mounted to their delivery vehicles.

“With the right digital investments and bold moves, post and parcel organizations will be able to compete more effectively in the marketplace,” Buhler said. “The early successes we are seeing prove that it is possible for post and parcel organizations to not only navigate the digital transformation necessary for long-term survival, but to thrive in the new eCommerce-driven marketplace.”

Successfully Leveraging Digital
The report highlights several post and parcel organizations that are successfully leveraging digital capabilities to compete more effectively. These include:

• Australia Post – whose MyPost platform and mobile app creates a digital mailbox for consumers while allowing them to manage their deliveries.
• Fed Ex and UPS – whose Delivery Manager (FedEx) and MyChoice (UPS) offerings are meeting consumers’ mCommerce expectations by enabling them to manage delivery service with the same device used to purchase the product.
• Deutsche Post DHL – whose Resilience 360 offering uses data analytics to identify potential supply chain disruptions to better understand business performance and customer satisfaction.
• U.S. Postal Service – whose Real Mail Notification provides consumers with images of the mail they will receive that day and can include links to offers or targeted advertising.
• Canada Post – which, having invested heavily in digital and IT initiatives, owns MyDashboard, a proprietary social media portal designed to improve customer service.

Other Key Findings

• The decline in mail volume is plateauing . Mail volume declined by a mere 1.6 percent between 2013 and 2014, indicating the slowing of a trend that had seen volumes decline by 21 percent in the previous six years. While all countries continue to experience a decline in transaction mail, the volume of direct marketing mail is more stable and growing in some regions.
• The parcel business is recalibrating . Parcels continue to present a path to sustained revenue growth, with volume increasing 5 percent from 2013 to 2014, driven by eCommerce and mCommerce. Revenue growth, however, is at 4 percent, roughly half the growth from the previous year, due in part to pricing pressures.
• Diversification is no longer optional . While the decline in mail volume seems to have leveled off, mail continues to decrease as a percentage of organizations’ revenues, slipping to just 44 percent of overall revenue in the past year, down from 55 percent in 2007. As a result, these organizations’ investments in retail, logistics, banking and insurance continue to grow as a proportion of revenue.
• The “last mile” is under attack . Integrators and postal companies face the greatest digital assault in the last mile delivery, the literal home stretch in home delivery service. Armed with social networks, greater choices and rapid reviews of companies and services, digitally connected consumers are looking for lower prices, greater convenience and a seamless experience in buying, receiving and returning products.

Methodology
Accenture conducted an in-depth analysis of 30 post and parcel organizations around the world for this year’s study, using publicly available information, content published by postal organizations and Accenture’s industry knowledge. Organizations analyzed are An Post (Ireland), Australia Post, Austrian Post Group, bpost (Belgium), Canada Post Corp., Ceska Posta (Czech Republic), Correios Brasileiros (Brazil), Correios de Portugal, Correos y Telégrafos (Spain), Deutsche Post DHL (Germany), FedEx (United States), Groupe La Poste (France), Gruppo Poste Italiane (Italy), India Post, Itella (Finland), Japan Post, Magyar Posta (Hungary), New Zealand Post, Post Office Limited (United Kingdom), Posten Norge (Norway),Posti Group (Finland), PostNL (The Netherlands), PostNord (Sweden and Denmark), Royal Mail Group (United Kingdom), Singapore Post, South African Post Office, Swiss Post (Switzerland), TNT N.V. (the Netherlands), U.S. Postal Service, UPS (U.S.) and Yamato (Japan).

Learn more about Accenture’s work with posts around the world and its global program, Delivering Public Service for the Future.

About Accenture
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 358,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

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Joanne Veto
Accenture
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