Posts should respond to the increasing strength of leading e-commerce players with innovations, new services and clear customer focus, according to senior industry executives at Post-Expo.
E-commerce demand is getting increasingly centralised, with Alibaba and JD.com dominating 80% of the Chinese market and Amazon with a 50% share of the US market, Ben Franzi, general manager e-commerce and international for Australia Post and StarTrack, told the World Postal Business Forum at Post-Expo in Geneva this week.
“That is a big challenge for Posts because we are not used to dealing with customers of that size. We are used to lots of small customers,” he commented.
Franzi urged postal operators to focus on consumers. “Meeting the needs of the consumers is where we will win or lose,” he predicted.
He described cross-border e-commerce as “incredibly important for Australia” with one online purchase in three being made from an overseas website. The USA, the UK and China are the dominant export markets to Australia at present, he noted.
Olaf Klargaard, innovation director with La Poste subsidiary GeoPost, warned that Posts faced the danger of becoming a commodity in a price war. “We can respond to demand pressure from customers by investing in technology and innovations,” he advised. “We must get to consumers choosing us because of quality.”
He added: “We have to transform ourselves, we have to focus on consumers.” More important than drone deliveries, for example, is having a mobile app in 22 countries that enables recipients to notify their delivery preferences, thus improving customer convenience.
Looking ahead, he highlighted the massive potential of grocery and fresh food deliveries. If up to 10% of groceries were delivered, the size of the parcel market would effectively be doubled, he said.
Thomas Baldry, Deutsche Post DHL’s SVP for international mail and international relations, told conference participants that Amazon has now started its own deliveries in Germany. “There will be more competition,” he warned.
He emphasized that customers want postal operators to work on end-to-end quality using data exchange to improve tracking capabilities. In addition, Posts should use automation and technology such as RFID to contain or reduce costs. “My dream is a packet that travels through the postal chain without being touched,” he declared.
Harald Weyerich, UPU’s technology director, emphasised that UPU is building an electronic network for postal operators to exchange data and thus improve cross-border deliveries, and also highlighted the need to integrate financial services and payments into postal services. He also pointed out the role of mobile communications for younger consumers, and said the UPU network would be made mobile-friendly by end-2019.
Discussing the potential of airborne drones to make deliveries, Franzi pointed out that some 40,000 drones would be needed to deliver to a city the size of Melbourne. “That number of drones is not feasible.” However, they could play a role in emergency deliveries or in remote areas, he suggested.
Franzi and Klargaard agreed there was far more potential for self-driving vehicles to be used for linehaul transportation to reduce costs. “Autonomous vehicles for linehaul could a big opportunity to save costs,” said the GeoPost innovation director.
