The FINANCIAL — 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.
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, according to Accenture.
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.
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.
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, according to Accenture.
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 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, according to Accenture.
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