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Learn why postal organizations should focus now on the urban customer market segment.
Widespread use of unmanned drones for package delivery to customers may sound like science fiction. However, it is one of the many aggressive strategies being pursued by retailers and eTailers, such as Amazon, to enter last-mile delivery services. Postal organizations are at risk of losing significant market share to these retailers and eTailers unless they focus on creating innovative ways to develop additional revenue streams from consumers.
How should postal organizations respond to this imminent threat? To help postal organizations around the world gain deeper insights into consumer mail and parcel behaviors and service preferences, Accenture carried out a comprehensive postal research in 2013 called Enabling Consumer Control. The study is based on a survey of 13,000 consumers across 12 countries—Australia, Belgium, Brazil, Canada, France, Germany, Italy, India, Japan, Switzerland, the United Kingdom and the United States. The research unveils a roadmap for postal organizations to retain their customer base and monetize it further to raise revenues.
Urban customers form the most profitable market segment for postal organizations as they are frequent users of postal services and the least costly to serve. Customers in this segment are also more likely to adopt new products and services than those in suburban and rural areas. Our research reveals that urban customers—postal organizations’ most profitable market segment—are most likely to take advantage of receiving packages directly from retailers. It is thus, crucial for postal organizations to retain and grow this segment that is critical to their growth and sustainability.
Offering urban customers the services they want could be the key to warding off competition for postal organizations. As urban customers are more willing to adopt and pay for new products and service offerings, they also represent the best hope for monetizing the customer base. That urban customers are unhappier with current services compared to their suburban and rural counterparts spells definite room for improvement.
The Accenture research looked at 18 potential features that stand to give consumers greater control over package services, while gleaning details on what they value, how often they might use these features and what they would be willing to pay for. On an average, urban customers are 41 percent more likely to pay for these postal services than those living in suburban and rural areas. Urban customers are 60 percent more likely to pay for package release authorization, 60 percent more likely to pay for package notification, 55 percent more likely to pay for the ability to give package delivery instructions and 45 percent more likely to pay for delivery tracking. Urban consumers are also more keen to pay for convenience and technology features such as digital mailbox preview, online document manager and a transactions and payments platform. The survey also reveals some of the pain points, including packages not being delivered at a convenient time, the need to sign for packages and pick-up facilities located inconveniently.
Drones or no drones, postal organizations must find ways to combat the threat posed by new entrants to their market. Accenture’s 2013 postal research suggests four steps postal organizations must adopt to stay ahead of competition:
Proactively communicate to inform consumers of an incoming shipment well in advance and establish delivery commitments.
Enable control by offering delivery scheduling services or secure delivery options to eliminate bad delivery experiences, especially for urban consumers.
Create new delivery products such as same-day delivery that have the dual benefit of improving the customer experience while delivering new sources of revenue.
Create new delivery options such as providing lockers in convenient urban locations to offer customers the flexibility of 24x7 delivery services.
As the parcel business grows and threats emerge from unexpected corners, postal organizations must focus on consumer-facing services. This will help them provide convenient options and increased control to customers, develop a direct digital connection with customers and generate sustainable revenue streams.
March 18, 2014
Urban Market is the Next Priority - 2013 Accenture Enabling Consumer Control research—Infographic
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