The Executive Series: Seizing Opportunities for Post in the New, Digital Economy

18 March 2016

The global shift towards a new, increasingly digital economy threatens the very core of the traditional postal industry. Although this shift has disrupted the well-established practices of postal services, this new economy gives Posts a new breath of life – through the great rise in parcel deliveries. Instead of abandoning its core services, Posts should embrace their strengths in order to seize rapidly growing eCommerce business opportunities.


Prospering in the New Economy

For the postal sector, digital transformation is of utmost importance. Within the rise of a modern, Internet-reliant digital marketplace, Posts are in a unique position to leverage their strengths to remain relevant in the online landscape.

This new economy has ushered in a fast-growing sector of digital consumers, which in turn has become the lifeblood of eCommerce. These digital consumers are a multi-screen, multi-channel demographic that is well-connected and, most importantly, willing to spend. But much like traditional consumers, these digital shoppers put high expectations on quality service and reliable product delivery.

Because of this, Posts’ existing core services and well-established physical networks, reaching every single person around the globe, make a solid foundation to leapfrog from traditional mail to new opportunities in eCommerce logistics.


Defending the Core

Despite declining demand for Posts’ core services, traditional letter post still accounts for close to half of all postal revenues[1]. But outside of simply focusing on core services as a source of revenue, Posts can build on those same services to seize opportunities in the new digital economy.

By leveraging on existing strengths such as brand recognition, logistics experience and an established network of delivery routes, Posts are in a prime spot to become multi-faceted end-to-end eCommerce service and solutions providers. Posts can provide specialized logistics solutions aimed at helping retailers and merchants satisfy clients hungry for quality consumer service. A common misconception is that Posts’ core services run contrary to the expansion of eCommerce logistics, when in fact, both are necessary. Existing post-offices can be used as a drop-off point for return deliveries and alternative pick-up locations. By using existing resources to augment eCommerce logistics services, Posts are able to provide a more comprehensive logistics solution to their clients.

SingPost, for example, has committed S$100 million to upgrade its infrastructure in Singapore, which includes organization-wide improvements to its mail sorting facilities and post offices. These investments aim to address the rising demand for parcel deliveries and logistics support, particularly in fast-developing markets in Asia where a significant portion of eCommerce deliveries are small postal packages of up to two kilograms[2].

While other post organizations are mitigating costs by cutting down on delivery days, SingPost has increased delivery hours, extended mail package delivery services, introduced 24/7 call center services, and a round-the-clock post-office concept to better bolster its delivery efforts. It has also incorporated the use of POPStations, highly secure, publicly located 24/7 parcel lockers where customers can post, pick up and return packages at their leisure. In essence, Posts can revitalize their core capabilities to be more competitive and relevant in the eCommerce market.


Growing the Wings of Post

The focus on eCommerce Logistics requires Posts to not only build on their existing portfolio of services, but innovate and expand into new areas of service. Posts can seize the opportunity to offer end-to-end services that not only address the demands of the online marketplace, but serve the entire eCommerce Logistics ecosystem.

According to eMarketer, retail eCommerce sales in Asia Pacific is projected to hit $1.1 trillion USD by the end of 2016, and climb to $1.8 trillion USD by 2018[3]. SingPost, which is focused on serving the fast-growing Asia Pacific eCommerce market, is in a unique position to expand alongside the rest of the region.

But with consumers accessing brands and merchants through more channels and screens than ever before, Posts – to be successful – should adopt an omnichannel approach that goes well beyond physical brick-and-mortar touch points. An omnichannel strategy opens up Posts to various channels like social media, web, mobile and desktop. Every channel is a new opportunity for consumers to interact with brands, and vice versa. The growing challenge among Posts is to bridge the gap between their physical services and the online landscape, a challenge that can be resolved by developing new services that allow one to complement the other.


A Brave New World

The new digital economy has carved a new world out of the old. Posts are well-positioned to build on the strengths of the past in order to set a clear path towards the future.

SingPost has already engaged the ‘new economy’ by consolidating its core strengths with new online-facing services. Its O² (O-squared) strategy, for example, takes the online-offline retail experience to the next level by bringing online shopping into the physical retail space. On top of that, SingPost’s acquisition of online sampling service Sample Store gives clients the leisure of trying out free samples from various online brands before committing to purchase online.

By adopting comprehensive, omnichannel solutions that include everything from front-end webstores, payments processing, and logistics to after-sales service, Posts can build on what they currently have.

It is a brave new digital world, spearheaded by an inevitable shift towards eCommerce. For Posts to be able to seize a position in this new market, they need to be ready to merge the old and the new, to take tried-and-tested practices and reimagine them for the highly-wired, fully-digital, online consumer.


SOURCE

[1] - UN News Centre
[2] - Translogic
[3] - eMarketer

Dr. Sascha Hower, SingPost
Group COO | CEO Quantium Solutions
Dr. Hower oversees the Group’s Operations and is responsible for strengthening critical processes and implementing innovative elements of SingPost's accelerated transformation. In addition to his responsibility for Operations across the SingPost Group, Sascha leads the Singapore Parcel division and oversees key customer-facing channels. As CEO Quantium Solutions Sascha leads the Group’s regional arm specializing in eCommerce Logistics and operating in 12 countries in Asia Pacific.