Panel discussion: the future of our postal system
The postal market is changing rapidly. What should the postal system look like within 10 years to continue to meet customer needs? Five international postal professionals in debate. “More than half of our revenue comes from activities outside the traditional postal activities. And we are ready to expand those even further. “
Digitization, increasing e-commerce, evolving customer expectations and the importance of reputation and sustainability require new strategies and technology to make the postal system future-proof. And these changes demand new partnerships and vision. Listening to other voices is crucial in this innovation process
Competition in the parcel sector is becoming ever greater. Will traditional postal companies still exist in 2030?
Helen Norman (Editor-in-Chief Parcel & Postal Technology International): “Yes, but not in their current form. Many postal operators are engaged in a transformation process to remain relevant. To do so you have to clearly map out the expectations and requirements of your end customers, in order to adjust your strategy accordingly. To stand still is to go backwards.”
Holger Winklbauer (CEO at International Post Corporation): “I fully agree. By 2030, 70 percent of all retail purchases will be made online. That is a tripling of the current e-commerce volume. In addition, the traditional postal volumes – such as letters and postcards – will drop 33 percent by 2025, according to our forecasts. Postal companies must prepare for this. “
How should the postal system reinvent itself in the coming 10 years in order to remain relevant?
Walter Oblin (Deputy CEO at Österreichische Post AG): “On the one hand by defending the traditional mail business and keeping mail relevant, on the other by capturing the opportunity in the e-commerce market. Even if traditional mail delivery volume drops by another third, it still remains a substantial part of our turnover. The national network – door delivery, post offices, postal partners or self-service solutions – of postal operators remains an immense asset. That gives us an operational advantage over competing courier companies.”
Dirk Tirez (Chief Legal & Regulatory Officer and Company Secretary at bpost): “Even more than today, the end customers will increasingly need solutions for their delivery services.. The same applies to the convenience of having a pick-up point or post office with services close to our end customers’ homes: that is becoming even more important. bpost not only grows along with the increasing parcel market, but also strategically diversifies its value chain. We provide complete solutions for e-tailers who want to sell online: with fulfilment, associated customer care services, payment and fraud services and delivery options. In 2020, we expect to reach the milestone where half of our turnover comes from activities outside the traditional postal activities. We are ready to expand that further. Among other things by focusing even more specifically on a high-quality customer experience through our services. We build on our strong brand, that is trusted by companies and citizens. “
How do customers perceive the Belgian postal system? What about bpost’s reputation?
Stephan Salberter (Senior Advisor at Akkanto, Reputation Institute’s exclusive partner on the Belgian market): “We give companies and organizations a reputation score based on research into consumer perceptions and media attention. The international reputation average is 63 out of 100. The higher the reputation score, the greater the consumer interest to buy products or services from that company. bpost scores better than the international average. That reputation is also determined by the quality of and access to products and services, and by the customers’ emotional connection with the company. In Belgium, consumers are even more familiar with bpost than with Amazon. That proves the Belgian postal operator’s strong brand quality.”
“In Belgium, consumers are more familiar with bpost than with Amazon.”
Speaking of Amazon: such large e-commerce players dominate the market. How can postal companies convert this evolution into an advantage? Which partnerships are needed?
Helen Norman: “Partnerships will be absolutely necessary to ensure the success of the postal service in the future. In the UK, Amazon and related companies are the absolute market rulers in the last mile delivery space. If a postal company can collaborate with them and develop solutions, both parties benefit from it. The postal operator benefits from the growth of that e-commerce company, while the e-commerce company benefits from the delivery network, the brand and the public trust of the postal company. This symbiosis also translates into an asset for the end customer. There is a golden future in such partnerships.”
Dirk Tirez: : “Large e-commerce companies are of course important customers of postal operators. There is room on the growing e-commerce logistics market for players of various sizes and specializations. In addition to logistical and delivery options, postal companies can also offer digital solutions to professional customers, with which they can, for example, manage their offline and online shop stock. bpost wants to assist customers to succeed in their endeavours and help them in their growth: regardless of whether they are major international players or medium-sized companies. “
In Belgium, since the beginning of March, urgent mail and parcels are delivered daily, non-urgent letters twice a week: do other European countries use a similar distribution model?
Dirk Tirez: “The international network of traditional postal deliveries is being adapted to changing customer needs. Belgium can’t escape this inevitable trend. bpost will make its eco-system network even more efficient and service-oriented, offering a great customer experience. It is the end customer who drives this change, not a regulator nor the postal company on its own. This trend is present in most European countries. “
Walter Oblin: “In Austria, too, we now deliver standard mail every other day but of course continue to deliver priority mail every day. Some customers do want a fast delivery for their parcels and classic letters- and at the same time there are customers who are looking for cheaper services at lower speed. By differentiating our delivery and price model in fast and slightly more expensive, against slower and cheaper, we target two different customer needs. The challenge? To set up the distribution network in such a way that you achieve an operational balance and synergy between both forms of delivery – with a high quality of service.”
Sustainability is becoming increasingly important in our modern society: what can the postal system undertake to improve itself on that topic?
Holger Winklbauer: “Postal companies are leaders in sustainability. Since 2008, our members, through the IPC Environmental Measurement and Monitoring System (EMMS), have reduced their combined CO₂ emissions from 8,758,000 tons to 6,426,000 tons in 2018. That is 27 percent less since the start of the program. Customers expect that too. Our survey of 25,000 consumers in 41 countries shows that 40 percent of customers would like to receive their parcel in a CO₂ neutral way. They don’t even mind waiting longer for it, if it reduces the environmental impact.”
“Postal companies are leaders in sustainability.”
Dirk Tirez: “bpost also focuses on reducing its CO₂ emissions, that goes without saying. But we add an additional social responsibility to it. We employ a lot of short-skilled workers through open-ended employment contracts. We make people from various population groups believe in a brighter future, and offer them training and development opportunities. In other words: we strive for sustainability in the broadest sense of the word.”
Helen Norman: “Sustainability must be a focal point throughout the entire postal organization. Electric vehicles are a good place to start, but sustainability should be considered in every business operation. Companies should look at both big and small gains in this area. We have to look at the way the staff works, the policy about recycling paper, the way the energy consumption of buildings is organized: it is a combination of many small and large issues. Companies that succeed in realizing those objectives, in turn, become a role model for other companies.”
“In my opinion, drones can hardly be used by postal companies. Just think of the weather conditions, air traffic restrictions and safety risks.”
How do you see the future: which emerging technology is becoming important for postal companies?
Helen Norman: “”I see a future for self-driving vehicles in the postal sector, especially in urban areas. I also believe underground delivery tunnels that have no impact on city traffic could provide a unique solution to the challenges of congestion, pollution and volume growth. Magway’s concept in the UK is one example. This revolutionary delivery system will soon deliver goods in small wagons that travel along magnetic tracks. People often talk about drones, but I think they more suited to specific use cases, rather than for widescale last mile delivery. Just think of the weather conditions, air traffic restrictions and safety risks.”
Holger Winklbauer: “A recent survey with 150 experts indeed shows that technology such as drones and also 3D printing have little future in the postal sector. For example, people will not suddenly start to massively print their products at home instead of ordering them online. However, 81 percent of respondents believe that postal operators can improve their last mile deliveries via digital systems, and more specifically with AI and robotics.”
Dirk Tirez: “Digital and technology are indeed crucial and limitless for the best possible customer experience. bpost believes in robots, artificial intelligence and blockchain, among other things, to make services more efficient, faster and more convenient. But technology is merely a means and not the end goal. The real innovation is the optimum experience that customers get from it.”
“Technology is merely a means and not the end goal. The real innovation is the optimum experience that customers get from it.”
Walter Oblin: “The focus must indeed remain on the consumer. That is why – in addition to new technology – the human factor will continue to play an important role in the coming years. It is our postmen and women who continue to make a difference on a social human level: they are the face of our organizations; the human interface, as it were. “
“It is our postmen and women who continue to make a difference on a social human level, they are the human interface.”