POSTAL INNOVATION Digitalization


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Postal organizations that achieve high performance are applying digi- talization in their quest to optimize postal delivery. As identified in the 2009 report, Accenture believes that a combination of factors is reaching the tipping point that demands postal organizations ad- dress the digital space. Whether optimizing postal delivery routes or reducing transportation and distri- bution costs, postal organizations need to automate and open up services to consumers to provide integrated, bi-directional communi-


market by mid-2010.3 The Bonn- based company is developing a for- mat for an electronically sent let- ter, which is more secure and reli- able than e-mail, to revive earnings. Is there a market for digital postal services or should the emphasis be on other digital services such as those related to financial services or government?


Our research does not yet indicate clear evidence of the direction of digitalization, merely the embrac- ing of its outcomes, whether those are cost-reduction, service im- provement, or similar. This trend


ditional product opportunities, one of which is developing the parcels space. For instance, TNT chose to handle the downturn by shifting from its international (Premium) Ex- press products to Economy Express products, a structural change that appeared more pronounced as customers sought to control costs. With greater confidence in online payment security encouraging the growth of shopping via the Internet, many analysts see a prime oppor- tunity for the parcels market.


The delivery parcels business is not without its challenges. Limited


cation capabilities across multiple channels. For instance, the more robust technology underlying the Intelligent Mail barcode over earlier technologies enables unique identi- fication of a mail piece, greater data capacity, and a more streamlined single barcode. The United States Postal Service has been using this barcode to good effect. Through an initiative known as Full Service the USPS system has been architected to process more than one billion Intelligent Mail barcode scans per day and store detailed, transaction level data for 45 days, resulting in a higher value mail piece which ben- efits everyone.


Meanwhile German postal services company, Deutsche Post (DPWN), expects its “e-letter” project, which it hopes will rival e-mail, to hit the


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will inevitably erode the traditional business either partially or totally, meaning postal organizations must define their approach to digitaliza- tion before it is too late. To achieve high performance, Accenture be- lieves that postal operators need to integrate physical and digital communications, building seamless solutions that manage the borders between the digital and physical world. Indeed, postal organizations must offer multi-channel receipt and delivery, allowing both origina- tors and recipients to choose the delivery mode, if they are to sup- port the kind of transformation that achieves high performance.


The parcels opportunity


While there may be a risk to the core postal product, there are ad-


product offerings, automation or tracking capabilities can have a negative influence on customer ex- perience.


When added to the issues over pric- ing constraints, limited international shipping services and other global issues, the potential for a quick win from parcels is not obvious. How- ever, the rising tide of customer demand means that the business- to-consumer market is not to be ignored. Alongside the consolidation of carriers and deregulation open- ing up competition, many shippers are pulling operations closer to home (in Europe rather than China) to manage trade liberalization, tech- nology and the fuel cost crisis. In such a shifting climate, the parcels business presents a window of op- portunity.


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