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Latest research shows that non-mail revenue now outweighs mail revenue, heralding a new era for postal organizations
Now in its seventh year, the Accenture in-depth analysis of the postal industry reports on the trends and opportunities for postal organizations. In the 2014 research we discovered many characteristics of high performers are consistent with previous years; yet added pressures from a changing marketplace, the impact of digital technologies and new competition are placing even greater emphasis on those seeking out diversification and new growth.
Watch Brody Buhler, Postal Industry global managing director, present the latest postal industry trends and findings of the report.
This year, four new postal organizations were added to the research sample: Yamato of Japan, Correios de Portugal (CTT), PostNL of the Netherlands, and Post Office Limited in the United Kingdom—increasing the number of postal or express players assessed to 30. These additions demonstrate the dynamic nature of the competitive landscape and how the postal industry is continuing its transformation journey.
In addition, we significantly changed the structure of the analysis. Previous reports categorized postal organizations’ strategies into four main groups: the global players, the regional diversifiers, the service providers and the traditionalists. However, in the 2014 research, we found these categories were no longer representative of the variety of strategies we are seeing in the market. As a result, we removed the categorization to better reflect the diversity and complexity of the strategies postal organizations are pursuing today.
Our 2014 research focuses on postal organizations’ individual strategies and analysis of the key drivers of performance—including what differentiates high performers from the rest.
Several factors are influencing the postal industry:
Mail volumes and revenues are declining: Mail volumes have dropped at a rate of 4.7 percent between 2011 and 2012 and at a compound annual rate of minus 5 percent since achieving their peak in 2007.
Mail remains profitable for most—but profitability is declining: Profitability has been declining since 2007 for mail and has remained stable for non-mail activities from an Earnings Before Interest and Tax (EBIT) perspective.
Diversification is the new normal: Non-mail revenue—including parcels—now outweighs mail revenue for the postal organizations we studied—52 percent versus 48 percent respectively.
Parcels offers a golden opportunity: The parcels business—including express and courier—is a story of growth, with volumes increasing at an average rate of 2.7 percent from 2011 to 2012.
High performers differentiate themselves by:
Achieving core business excellence while driving growth through diversification.
Developing a digital and mobile ecosystem as a key aspect of their growth strategy.
Operating with a strong commercial focus, enabling their decision making capabilities to be more responsive to market change.
Investing to transform their parcel networks and seize market share.
Postal organizations need to consider upcoming influential factors:
New competitive threats: To grow parcels while maximizing the efficiency of their vast networks, postal organizations must actively develop competitive strategies that address the large, international integrators; smaller, domestic competitors and the emerging threat of eTailers and retailers developing their own networks.
Technology opportunities: Several new capabilities could be important for postal organizations to consider as they plan for the future, such as authentication services—to serve the identity management needs of a “digital society” —, mobile wallet (simplifying payment processes to change dramatically the retail shopping experience) and analytics—leveraging a wealth of data around customers and operations to drive better results—.
Our experience helping postal organizations around the world to transform has identified three critical dimensions that serve as a roadmap to postal organizations as they execute their high performance strategies: to protect the core, to grow parcels and to effectively diversify. Our research has found that excellence in one dimension, while rewarding, is simply not enough; postal organizations need to be effective in all three dimensions to gain efficiencies that serve their overall mission and become high performers.
March 14, 2014
Achieving High Performance in the Postal Industry Accenture Research and Insights 2014—Infographic
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