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The internet of postal things | the integral role of data for the postal sector

While the postal industry remains in transition worldwide, the observed trend is that successful strategies are emerging that prove that postal organizations can thrive, mail still matters and digital delivers new business models that allow post and parcel organizations to achieve greater efficiencies, lower costs, better asset utilization and an increased predictability.

This was established in the recently published research by Accenture | Post and Parcel Industry earlier in 2017: the ‘Annual high performance post and parcel industry research’, in which it is confirmed that mail remains profitable, e-commerce continues to drive parcel growth and the studied organizations are transforming into parcel organizations.

Consequently, diversification strategies are working and driving new revenue markets and digital continues to have a transformative influence on the postal industry. As digital transformation continues it becomes increasingly important that postal organizations become more agile. With smart phone and networks that create new access and data and analytics engines that create new insights, the industry is becoming a very dynamic place. Only with agility will postal organizations be able to take advantage of the ongoing digital phenomenon.

As the industry battles disruption, on the one hand, high-performing companies are seizing the new growth potential of the parcel business while making their existing mail businesses more profitable. On the other hand, a clear majority of postal organizations worldwide are far from translating digital investments into better financial performance and growth. 

The Accenture research assessed more than 370 companies across all areas of post and parcel business including strategy, research & development, manufacturing, supply chain, marketing, sales, customer service, internal culture and operations. Based on their assessment they found that most companies in the post and parcel industry are not turning digital investments into better financial performance: 

  • Only 6% of post and parcel organizations are considered ‘digital high performers’ (companies that combine strong digital performance with strong financial performance). 
  • The post and parcel industry has 44% more business leaders (organizations with strong financial performance but limited digital enablement), than any of the other industries studied (communications, electronics, high tech, retail, banking, utilities). 
  • Only 10% of post and parcel companies are digital leaders (companies that, in spite of their significant digital progress, are still working to translate it into financial results). 


Across the board the research shows the post and parcel industry worldwide is in the midst of digital transformation, but has yet to reap the full rewards. However, this is expected to change over the next two years. Evolving consumer expectations that, for example, will demand data-driven more personal services, will require new digital capabilities. Digital investments will also underpin the required operational efficiency and cost saving programs for continued profitability improvements. 

Across the board the research shows the post and parcel industry worldwide is in the midst of digital transformation, but has yet to reap the full rewards. However, this is expected to change over the next two years. Evolving consumer expectations that, for example, will demand data-driven more personal services, will require new digital capabilities. Digital investments will also underpin the required operational efficiency and cost saving programs for continued profitability improvements. 

There is no question post and parcel organizations are just beginning to realize the financial rewards of digital and research data show that those investments are creating the foundation for high performance and future growth. 

4 dimensions of postal and parcel high performance 

The scope of Accenture’s high performance post and parcel industry research is broad and comprehensive, as it covers 31 post and parcel organizations that deliver 90% of world’s mail and parcels across six (6) continents. Their research uncovers four (4) key point indicators of post and parcel high performance that represent the 4 key dimensions that are determinant for postal and parcel companies in succeeding in the long term, next to continuously reinventing themselves to achieve excellence through high performer strategies. There are 4 dimensions of high performance as established in the Accenture high performance research:

  • Defend your core business: streamlining and modernization of mail operations and a focus on price increases should work as securing factors for mail profitability. In some cases, better profit margins are the result of dramatic price increases as postal organizations are testing mail price elasticity.
  • Grow the parcels opportunity: grow cross-border e-commerce capabilities and market share.
  • Diversify selectively: engage customers into digital means, sell through multiple integrated channels and serve customers with a seamless experience, diversify into logistics to maximize assets and deliver improved market share.
  • Transform into digital business: transform the organization to be more agile and data driven through digital to boost current and future growth.  

Future prospects for growth & profitability of postal market

Research shows that the parcels industry is the growth engine in the postal market, however the highly competitive environment around last mile delivery worldwide has proven to be problematic. Incumbents and large retailers are doing their own deliveries and disruptive startups focus on the last mile of customer experience.

Startups are almost always asset light and data rich. They aren’t buying trucks. Instead they buy servers and use data in different ways in crowdsourced and sharing economy capabilities. Their business models can be very profitable with low costs, but their battleground is tough. And the postal companies will have to adapt and do last mile delivery in very different ways in the future, while simultaneously understanding and implementing digitization to create customer value through data, automation and other processes. 

Last mile deliveries & required innovations

One of the primary noticeable trends is that retailers get more data and an increase of the predictability of what their target market will buy and when. Additionally there is also the availability of crowdsourced labor and consumers that want deliveries at all times in the evenings and on weekends. A mix of both contributes to a different last mile delivery model. Items no longer come into the postal network in the morning or trucks going out at 8am full of hundreds of parcels. Drivers are notified when they are needed and the delivery process has become a dynamic local process, cheaper, faster and driven by AI (artificial intelligence) at the very center acting as the orchestrator of all deliveries. 

Pace of digital transformation of post & parcel companies

The postal sector is not embracing digital fast enough, in spite of the considerable cost reduction that comes along with digitization. Although data analytics has become common knowledge, most companies are not getting AI (Artificial Intelligence) or don’t believe in its potential. Most companies are not past pilot trials with this technology, despite the clear evidence of its value.

Retailers are raising the bars as to the relationship with their customers, which entails that post and parcel companies also need to use digital more actively and effectively to evolve their relationships with consumers.

With regards to the last mile and new delivery models, postal companies are increasingly pushed to look at the potential digital technologies to change the last mile and develop more effective strategies to take advantage of that. At the same time they have to deal with the main last mile challenges: minimizing cost, ensuring transparency, increasing efficiency and making the delivery process frictionless.

Therefore, it becomes imperative for post and parcel organizations to accelerate their digital transformation. According to the ‘Annual high performance post and parcel industry research’ the 4 main strategies to explore are:

  • To rigorously invest in and assess digital capabilities.
  • To restructure to become agile, flexible and faster.
  • To partner and participate in the digital ecosystem.
  • To drive growth through digital process synergy.

The bottom line

Powerful digital trends continue to reinvent the post and parcel industry. Technology-driven innovations redefine products, realign customer expectations and reshape the competitive landscape. As the retail industry shifts toward digital worldwide, post and parcel organizations are reengineering their core businesses to meet the new reality of rapidly growing B2C parcel delivery.

Faced with mail volume decline, e-commerce growth, diversification options and higher customer expectations for service and quality, the post and parcel industry has no other alternative but to re-evaluate strategies and re-prioritize to thrive in the industry, making innovation an absolute necessity. 

(Source: www.postalandparceltechnologyinternational.com | Annual high performance post and parcel industry research 2016. BT&P publication period: 2017)