The world’s postal operators must innovate, transform themselves and take risks much more thanin the past to seize new business opportunities such as e-commerce, senior CEOs and industry
leaders said at the World Postal Business Forum at Post-Expo in Stockholm this week.Bishar Hussein, Director General of the Universal Postal Union (UPU), which organised theconference, urged the world’s Posts to harness the power of innovation to adapt to customers’ newcommunication needs. “Innovation is not only about new technologies; it is about a change inmentality, and finding new and creative solutions to meet evolving customer needs,” he said.
Highlighting the potential of e-commerce, the UPU chief said: “To make e-commerce a reality, wemust realign the way we do business and come up with new solutions.” But he also warned that postaloperators could lose business if they did not focus on customer needs. “There is no loyalty tobrands unless you can provide the service customers want,” he said.
Hussein told delegates that the UPU was working on creating a worldwide e-commerce supply chainnetwork by linking up postal services and infrastructure. This included a new returns service forcross-border goods that could be offered to e-retailers and consumers to help promote internationale-commerce.
Keynote speaker, US-based entrepreneur Moses Ma, highlighted the accelerating speed and impactof technology on all parts of the modern world, even though it was impossible to predict how theinternet would affect business in the very long term. He advised Posts to “get out of your comfortzone, ask a lot of questions, experiment as much as possible and don’t have a fear of failing”.
One example of a postal operator making innovative changes to its core business model inresponse to the declining letters market and rise of e-commerce is PostNord. By 2020 theSwedish-Danish group expects its mail volumes to be just 20% of the 2003 level.
“We had to change to survive,” CEO Hakan Ericsson told the forum. “We are trying to go frombeing a mail company with a logistics business to being a logistics company with a mail business.”</p>
The group’s core strategy is to focus on the Nordic region and become a ‘balanced’ logisticscompany offering services from mail to parcels and pallets. To achieve this, PostNord has acquiredsome 20 companies, mostly in the logistics sector, in recent years and is currently integratingthem under a single brand ‘PostNord Logistics’.
In parallel, it has created a dedicated e-commerce unit to develop that business, which iscurrently growing by 10-15% a year. Ericsson cited the example of the new logistics centre that thegroup is building for Nordic e-retailer CDON, from where most of its supply and distribution willbe organised.
Meanwhile, PostNord is also trying out some very different services, Deputy CEO K.B. Pedersentold the conference. In Denmark, for example, PostNord has launched home deliveries for grocerychain Coop and has started to deliver some healthcare products direct to homes in response to cutsin the public healthcare systems. “It’s not just about e-commerce. There’s a lot of other areas tobecome active in,” he declared.
Asked to name some of PostNord’s failures, Pedersen admitted that hybrid mail had provedunsuccessful. “One of our failures was to invest a lot in hybrid mail,” he told delegates. Butcustomer demand for this cost-saving service had not increased as expected and the group had closeddown its hybrid mail printing facilities. “We saw that this was not a way to be innovative,” hecommented.
Another business to have been transformed by an international merger is Asendia, created withthe combination of the international mail businesses of France’s La Poste and Swiss Post two yearsago. In parallel, the company, with annual revenues of some €450 million, is re-positioning itselfaway from being a traditional international mail company to a cross-border delivery solutionsprovider to target e-commerce business.
“Asendia was a logistics provider, with customer service, transportation and delivery. But if wekeep this position it will not be enough. We need to move to e-commerce solutions,” CEO Marc Pontetexplained. The segment of heavy letters and light goods has grown from just 5-10% of business a fewyears ago to about 20-25% today, he said. “The ambition is to increase it to 40-50%,” he said.
One strategic move in this direction was the acquisition of a financial stake in Irish-basedfirm eshopworld in order to be able to offer new services, he pointed out. Pontet also predictedthat ‘returns management’ will become more important in future and could become “a differentiator”between postal operators.
The biggest change for Asendia staff, however, has been the transformation away from sellinginternational mail products, often “on price”, towards providing customer solutions, hecommented.
