Postal in 2025: A Digital Hub for Consumer Centric Services

In this POV paper, we examine the perils and possibilities ahead for Postal Companies and outlined our view of how a Postal department and a Post office of the future will be reinvented and re-organized to meet the needs of the future.

In the late 1600s, the notion of paid mail delivery in Canada must have seemed entirely absurd. There was no model to follow; the oldest functioning post office in the world, in Scotland, wouldn’t open until 17121. Yet in 1693, the first paid mail delivery within Canada happened. By 1939, there was daily air-mail service begins between Montreal and Vancouver2. Before long, Canada Post was delivering to a larger area than the postal service of any other nation on Earth3.

The point is that invention and re-invention of Postal companies is not only possible when it appears impossible. It is, in fact, what Postal companies have always done — even when it is not easy.

What is the current situation?

The list of challenges facing Postal organizations is familiar, and daunting.

Revenues are down, as the rise of digital communication has led to dwindling traditional business.

Competition is up, as e-commerce giants like Amazon aggressively invest in last-mile delivery.

Government willingness and ability to fund Postal organizations, already facing headwinds from tax-averse citizens, is further challenged by the current pandemic. Postal companies need to be self-supporting at minimum and push toward profitability.

This may appear to be a perfect storm, and a business model challenged like none has ever been before. Yet, is there an organization on Earth that has not had to adapt to shifts in revenue from digital? Or one not facing increased competition? Or one free from demands for more profit?

What Postal organizations need is the same as any other type of business facing challenges that require considerable reinvention: a roadmap that leads to a better, more sustainable future.

Designing the Roadmap to 2025: A glimpse of the future Postal Business

Rather than focusing on what Postal organizations lack, why not look at the strengths of their existing assets and what opportunities they can enable?

A powerful opportunity space: proximity and intimacy.

Postal organizations were purpose-built from the start for proximity and intimacy with the areas they serve.

As a result, Postal organizations are already well-positioned to capitalize on diversified growth in e-commerce, financial services, last mile deliveries and other related segments where proximity and intimacy with consumers can offer great leverage.

What’s more, this aligns well with sky-high customer expectations. Customers now expect business and governments to function as modern digital business do, providing more personalized services, remotely delivered to their residence, workplace or trusted community. Why, consumers wonder, can’t government work as well as an of my favorite apps on my smartphone?

The e-commerce opportunity is obviously attractive. In late 2019, e-commerce retail trade sales amounted to almost 1.85 billion Canadian dollars, with approximately 28.1 million Canadians having made purchase online. Revenue generated within the retail e-commerce market is expected to surpass 43.3 billion CAD by 2024, up from 33.3 billion CAD in 2019.[1] As of 2019, Canada Post was delivering 60% of all e-commerce parcels. With logistics amounting to roughly 10% of this, the opportunity for Postal companies is here and now. Getting this right opens further opportunities to become a vital supply chain hub for global e-commerce and B2B.

But that future revenue is far from assured: growth has already slowed due to entry of new players, and diversification by e-commerce giants.

This means the window to get this right — and do it better than Amazon.com can with their electric-powered delivery vans, drones, sidewalk robots and partnerships with third parties — is quite limited. There is no time to delay.

But e-commerce is just the beginning of the models this opportunity space can enable to grow topline revenue. For example, Postal organizations can maximize the use of large land banks and real estate that they hold. They can enable expanded coverage through Public Private partnerships and/ or franchise models, Improved internal operations for efficient business across traditional and new business models.

To make the most of these, and to find opportunities to shrink costs and improve capabilities, it’s best to re-envision the entire enterprise, from the Postal Front Office through Modern Storage to outbound delivery.

Re-envisioning the Postal Organization for 2025

Front Office

Because of its inherent advantages in proximity and intimacy, the Postal organization can become the indispensable digital hub for all local consumer and business services. As a by-product of helping local consumers, business, and government with these services, the Postal organization will have an abundance of data to drive personalization, hyper localization, and superior Customer Experience. This can also help government increase meaningful community engagement

But as we discuss these, it’s critical bear in mind that the window to build of these capabilities and seize this opportunity is closing fast. For example, it is only a matter of time before Amazon offers its Last mile delivery to SMBs and enterprises. While Amazon is currently Canada Post’s customer, it may become their biggest competitor in the next two years.

Modern Storage

Outbound Deliveries

It’s important to remember that many of these improvements may not require a great deal of capital. For example, the storefront can be digital/physical, and multiple storefronts are possible. The key is to examine the entire enterprise to identify opportunities to create new revenue streams, improve Customer Experience, and/or boost efficiencies

How to measure success

Reinvention is a complex process that will build on the success of individual technology initiatives, all driving to larger business KPIs. Many of these initiatives will be moving on a parallel path. A disciplined digital and technology strategy spanning the entire process will need to consider all of following aspects. 

1. Value Stream Design
   The design of the value streams should be driven by business strategy and the requirements of the emergent business model. A roadmap must be developed that identifies each initiative, its KPIs, and how individual outcomes and overall impact will be measured.
   
2. Product-Based Digital Team Design
   Targeted initiatives across the value streams will require re-imagined team structures working on an “agile anywhere” model, driven by talent across the globe. These newly established delivery pods, unconstrained by physical boundaries, will enable project managers to hit goals faster.
   
3. Designing for Digital Architecture Maturity
   Digital Architecture Maturity requires delineating the “systems of record” from the “systems of innovation” and the “systems of engagement”. A more mature digital architecture eases tech modernization and enables new ways of working. Integrations at the data and business process level will be critical in establishing differentiation through ecosystem establishment at speed and scale.
   
4. Designing for New Ways of Working
   Throughout the innovation process, building in agility, flexibility, and adaptability will be critical. The organization must be ready to catch up with evolving paradigms in engagement and procurement models that enable value stream oriented, hybrid (agile + traditional) delivery. But more than, it must be ready to pivot and adapt as the future continues to unfold.

Ten ways Postal organizations can win the future

• Think big: aim for full self-sufficiency, not just survival.
• Benchmark POs around the world, learn from what’s working and what can be done better
• Shift the organization’s mindset from incrementalism to reinvention.
• Improve reaction speed and make faster decisions.
• Commit to serving customers, local business, and government in new, smarter, better ways, with Customer Experience at the core.
• Commit to hiring and retaining the best employees possible, and think hard about Employee Experience.
• Make meaningful investments in bite-sized chunks.
• Have a measurement plan in advance.
• Be impatient in your plans but patient in execution. Transforming organizations isn’t easy.
• Choose partners who have been through this before and can help guide you.

Wipro’s Postal practice has worked with leading Postal and government organizations around the world and can help you through the entire journey, from ideation to technology pilots to roll out and optimization. 

References

1. https://en.wikipedia.org/wiki/Post_office
2. https://en.wikipedia.org/wiki/Canada_Post#Timeline
3. https://en.wikipedia.org/wiki/Canada_Post
4. https://www.statista.com/topics/2728/e-commerce-in-canada/

About the Authors

Anshuman Mukherjee
Consulting Partner

Anshuman brings 20+ years of experience in strategic business and technology consulting across industries and domains. His major focus includes expanding the domain and business consulting business, driving digital transformation, and accelerating value-centric propositions for customers. Previously, Anshuman led the Digital Charter for the consumer products vertical as well as the India business unit. 

Subrat Gaur
CTO and Product Engineering Head - Consumer Business unit

Subrat has 25+ years of experience in Product Development and Enterprise Architecture across various domains. He is responsible for product engineering of platforms and IPs such as PROMAX, CROAMIS, and TOPS, and also leads the Technology Architecture Function for the Consumer Business Unit. Subrat comes with a rich architecture background, including leading teams of architects in his previous organizations such as EDS and HP. He has played various roles such as Chief Technology Officer, Chief Architect, Delivery Manager, Product Manager, and Relationship Manager.

Nitesh Kumar Jain
Vice President & Cluster Head – UK&I

Nitesh looks after all strategic relationships in UK&I for Industry segments ranging from Retail, CPG, Tech, Manufacturing, to Travel, Hospitality, Media and Public Sector. Nitesh has more than 23 years of experience across various leadership roles; establishing, scaling and spearheading growth across verticals, service lines and markets. He has championed different areas of technology-led transformations and business portfolios in FS, Retail, Consumer Goods, Manufacturing, Travel, and Public Sector at Wipro and other organizations.  In his previous role as VP & Global business head of Wipro’s Travel, Hospitality & Public Sector (THP) vertical, he set the vision, shaping and implementing growth strategies for each sub-segment within the THP vertical.