Mail volumes could slump by 44% at leading postal operators over the next decade due toelectronic substitution and other factors but prospects for parcel growth driven by e-commerce look
strong, experts predicted this week.In response to the collapse in physical mail volumes, postal operators have no choice but to ‘godigital’, Brian Moran, global head of postal business at Accenture, told several hundred executivesand managers at the European Postal Services conference in London, which was organised byMarketforce.
World postal volumes are predicted to slump by 44% from 297 billion pieces in 2009 to 165billion pieces in 2020, he said, citing the results of the consultancy’s latest annual report on “Achieving High Performance in the Postal Industry”, which covers 26 major postal operators. NorthAmerica could see a 49% drop, Europe could fall about 35% and Asia Pacific could suffer a 31%decline.
“The decline in volumes is here to stay. Mail volumes will go down year after year. It’s a veryscary proposition,” he told postal managers bluntly. While rates of mail decline will vary bygeography, the postal industry should expect an average year-over-year decline of at least 5% forthe foreseeable future, according to Accenture.
In response to this structural decline, geographical and/or service diversification was now theclear strategy for success in the postal sector, Moran stressed. In particular, postal operatorshad to embrace the opportunities presented by electronic communications. “The digital era hasarrived,” he declared.
Posts should develop a portfolio of electronic services and not just try to sell existingproducts online, he stressed. “The market is ready for e-services and Posts need to move fast. Theywill bring the power of their brands and network.” But he warned that other organisations,including governments, were also positioned to offer a range of electronic services that couldcompete with Posts’ online activities.
E-commerce was another clear opportunity for postal operators to expand and develop their B2Cparcel services, the experienced postal expert continued. “The golden era for parcels in the postalsector is just beginning,” he commented. Online shopping still only represented a very smallproportion of total retail business around the world and would continue to grow at double-digitrates for the next few years, he predicted. “Now is the time for Posts to invest for the future,”he added.
In contrast, Moran was more pessimistic about the future prospects for postal operatorsregarding financial services. There had been a peak during the global financial crisis whenconsumer confidence in banks slumped and postal savings banks were seen as a safe option, he said.But this “easy success” era was probably over as the world economy recovered, he suggested.
Accenture itself has now added digital post services to its range of services for the postalsector. These enable postal agencies to immediately compete in the digital market byconverting, delivering and storing traditional mail, such as utility bills, as digital mail in apostal customer’s secure online mailbox. Mail recipients can organise and store their digital mailand, as with physical mail, postal customers will not have to pay for this service.
“Accenture is launching digital post services to help postal agencies expand their trustedrelationship as the secure gateway between business, government and their valued customers,” Moranexplained. “We are focused on enabling global posts to leverage new technology to drive revenue andcompete against a growing number of independent digital mail start-ups.”
Just like the cost of postage, postal agencies may charge fees for delivering mail digitally,creating an important new revenue stream. Accenture estimates that the majority of traditional mailcan be converted to digital mail, making up for some of the revenue lost to decreased mailvolumes.
“With digital mail, postal agencies can now offer business mailers a choice on how they wouldlike their mail delivered – hard copy, digital or both,” said Moran. “This new multi-channelcapability will help posts adapt to the changing technology environment by giving citizens theoption of receiving mail in their letter box or on their smart phone.”
Important postal customers will also benefit, Accenture said. High-volume mailers, such as banksand utilities, that opt for digital mail can achieve significant cost savings on paper, productionand staff hours. They can offer consumers a choice while still being confident that theirimportant correspondence is being delivered securely by the country’s official postal system.
Accenture works with more than 20 postal clients around the globe, including some of theworld’s largest posts, and its systems help deliver more than 50% of the world’s mail.
