March 19, 2014

Mail No Longer Largest Revenue Source for Postal Agencies, Accenture Study Finds

Parcels, packages, products outperform mail as volume continues to decline

LONDON; March 19, 2014 – In a defining moment in postal history, non-mail revenue now outweighs mail revenue for postal organizations around the world, according to a new study from Accenture (NYSE: ACN). As mail volume continues to decline – dropping by 78.5 billion pieces, or 21 percent since 2007 – the study concludes that posts must continue to diversify their products and services and more aggressively pursue eCommerce opportunities to be profitable.

Achieving High Performance in the Postal Industry: Accenture Research and Insights 2014 identifies three trends in the industry: the need to embrace digital and mobile channels; diversification at scale is the new normal; and parcel growth paves the way for future profits. The changing eCommerce landscape presents important areas for postal agencies to move forward.

Research findings were presented at the annual European Post and Parcel Services Conference in London. The 25 postal agencies included in the research represent about 80 percent of the world’s mail volume.

“Despite all the news about the demise of mail, we found that mail can still be profitable. Postal organizations in our research see better returns on mail than on their diversified services,” said Brody Buhler, global managing director of Accenture’s postal industry group. “A well-run mail division and diversification excellence are strong indicators of the versatility and agility required to be a successful postal player today.”

Growth through Diversification
The research shows that non-mail revenue, including parcels, which accounts for 52 percent of postal organizations’ total revenues, is becoming more profitable than mail. While mail remains an important part of the business, most postal organizations are transforming their businesses into hybrid organizations with a diversified portfolio of products and services – parcels, logistics, banking, insurance, eCommerce and digital activities. Successful posts are diversifying into new business lines. According to the research, the top five postal organizations – Singapore Post, Australia Post, Poste Italiane, bpost (Belgium) and Austrian Post Group – as a group, consistently achieved more than 3 percent revenue growth over the last five years by diversifying products and services.

Other Key Findings:

Parcels to the rescue: Parcel revenues grew about 4.8 percent, between 2011 and 2012, slightly faster than volume growth and continue to benefit from the growth in eCommerce, typically growing in double digits in most countries. India Post realized a 42 percent parcel volume growth and Singapore Post has become a regional leader through recent acquisitions of Quantium Solutions, Famous Holdings and Indo Trans Logistics Corp.

Product innovation at scale: Posts continue to innovate around mail to discover and implement solutions that can slow the decline of mail. Austrian Post Group, for example, launched a new advertising mail envelope, Kuvert (German for envelope). The product is a new packaging option for brochures with advertising opportunities inside and outside the envelope.

Digital channels drive greater efficiencies: Digital as a channel – and not a mail product – is having high impact on postal organizations. Digital channels are playing a bigger role in eCommerce and postal agencies are creating digital solutions that enable payment, provide access to small business and give consumers control over the delivery of their online purchases. Poste Italiane has a dedicated eCommerce solution, Poste eCommerce, which creates an online solution for Italian small businesses. The agency has negotiated agreements in the Netherlands, China and Russia, giving Italian businesses broader access for their products.

Since the publication of its first high performing posts report in 2006, Accenture has conducted ongoing, in-depth research of the postal industry. Using the Accenture High Performance Business methodology, Accenture has reviewed and assessed the relative performance of postal organizations. Starting with the postal organizations of 16 countries and extending that research to include 30 postal, retail and parcel organizations and four commercial companies in 2014, the study provides a comprehensive review of the drivers of high performance in the postal industry.

Methodology
Twenty six postal agencies and four commercial logistics companies were analyzed, including the U.S.-based, private-sector companies, FedEx and United Parcel Service (UPS). “Achieving High Performance in the Postal Industry: Accenture Research and Insights 2014” consists of analysis based on 2013 publicly available information, content published by the postal organizations and Accenture industry knowledge and experience.

Postal 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 (U.S.), 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), PostNL (The Netherlands), PostNord (Sweden and Denmark), Royal Mail Group (United Kingdom), Singapore Post, South African Post Office, Swiss Post (Switzerland), TNT Express (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 global management consulting, technology services and outsourcing company, with 281,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US $28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.

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Contact:

Joanne Veto
Accenture
+ 703-947-2590
+ 703-963-4212
joanne.m.veto@accenture.com