Accenture Postal Transformation 2013


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Accenture Postal Transformation 2013

  1. 1. Reinvention: strategiesfor an industry intransformationAchieving High Performance in thePostal IndustryAccenture Research and Insights 2013
  2. 2. 2Today’s agenda• Summary review ofAccenture research 2006to 2012• The transforming postalindustry landscape• 2013 research—Keyinsights and implicationsCopyright © 2013 Accenture All rights reserved.With mail volumes continuing todecline across the industry, whatmust postal organizations do tosustain high performance?
  3. 3. Strategic clarity rather than strategic choice was identified asa critical factor.3Accenture research reviewCopyright © 2013 Accenture All rights reserved.2006Strategic themes emphasized, along with the need to achievea balance across all the building blocks* of high performance.Diversification emerged as the single strongest predictor ofhigh performance —geographic or service diversification wasthe choice.Importance of diversification reinforced and digitalizationemerged as a strategic imperative.Restructuring of the postal business was vital, considering thetransforming industry landscape.2009201020112012*Accenture defines the building blocks of high performance as market strategy, distinctive capabilities and performance anatomy
  4. 4. 2013Supplementing cost-cutting measures withinnovative businessexpansion is crucialfor postalorganizations toachieve highperformance.4Copyright © 2013 Accenture All rights reserved.
  5. 5. 52013 research: The transforming landscape• Continued mail volume declines hurtingthe profitability of the mail business• Postal operators must aggressivelyaddress the costs of their legacybusiness models to make mailprofitable.• Innovation is the key to limit the loss ofphysical mail while exploring newavenues to stimulate growthCopyright © 2013 Accenture All rights reserved.Year-on-year mail volume decline, in millionsMail volume growth, 2009 to 2011
  6. 6. 62013 research: The transforming landscapeCopyright © 2013 Accenture All rights reserved.Global players Regional diversifiers Service providers Traditionalists• Historically performedwell due to exposureinto parcels and logisticsand being globallydiversified.• As economies return togrowth, they are poisedto continue strongperformance.• Improved performance,but lag other categoriesin revenue growth.• Focused on acquisitionsand investments innearby markets• Continue to dominatehigh performers• Have consistentlyimproved performanceacross key metrics.• Most vulnerable to mailvolume declines.• Most traditionalists failto deliver performanceand are negativelyaffected by tighterregulationsRevenue and capital spread by strategic category in 2013
  7. 7. 7Trend: Revenues and Capital Spread On The DeclineCopyright © 2013 Accenture All rights reserved.20131,80201220111,4620105,2020096,141,992013-4,76201220111,9020103,9220093,86-3,09Average one – three and five year growth ratesfor all postal agencies included in Accenture’s HighPerformance Postal ResearchAverage one and three year capital spread for allpostal agencies included in Accenture’s HighPerformance Postal ResearchGeneral deceleration of revenue growth and decline in profitability aworrying trend
  8. 8. 2013Key insights andimplications8Copyright © 2013 Accenture All rights reserved.
  9. 9. 9Finding 1: High performers use product innovation and pricinglevers to improve mail profitabilityWith volume declines continuing despite economic improvement, postalorganizations need to innovate to limit the loss of physical mail.Product innovation• High performers continue to innovatearound mail to “bend the curve” or evengrow mail volumes.• Solutions that target new customersegments or simplify products, such asunaddressed admail, are showing growthand slowing volume declines.• We believe more postal operators willbegin to focus on developing innovationsthat stimulate both admail and transactionmail volumes.Pricing opportunity• Postal organizations have been usingpricing effectively to drive revenue growth.• Postal organizations that are free to setprices based on market conditions and notconstrained by cost-based, legacy pricerestrictions are likely to continue to seerevenue growth.• As competition increases, pricing skillsand capabilities will increasingly become acompetitive advantage.Copyright © 2013 Accenture All rights reserved.
  10. 10. 10Finding 2: High performers embrace the diversificationof servicesOur research indicates that service diversification is critical to achievinghigh performance, with most of the high performers belonging to theservice provider category.Copyright © 2013 Accenture All rights reserved.Revenue CAGR 2003 to 2011 versus mail as a percentage of revenue in 2011
  11. 11. 11Finding 2: High performers embrace the diversificationof servicesPostal organizations have accelerated their pace of diversification witha focus on logistics and financial services and an eye on sustainabilityand profitability.Copyright © 2013 Accenture All rights reserved.Many postal operators have expanded their banking businessesinto other financial services to diversify their revenue streams whileleveraging their retail networks.FinancialServicesA wide range of logistics services are offered including sourcing,warehouse management, transport and specialized services, andtargeted, specialized industry solutions.Parcels andlogisticsHigh performers have made the strategic decision to use their retailnetwork as an asset.Retail
  12. 12. EvolvingeCommerceenvironmentImpact of return processConsumers now expect stress-free returnsprocesses giving postal organizations anadvantage with their first-mile coverage.Do-it-yourself retailersPostal organizations will need to defend againstretailers who seek to leverage their brick-and-mortar network to develop delivery capabilities.Cross-border eCommerceAs cross-border eCommerce growthaccelerates postal organizations havethe opportunity to capture greatervolumes in the origin country.Mobile eCommerceDeveloping capabilities for “one-click”shipping, simple shipping selectionand tracking integration with mobileeCommerce sites.12Finding 3: High performers are maximizing the opportunity inparcels and taking full advantage of eCommerce trendsThere are four strategic areas postal organizations should focus on tocontinue to drive parcel market share.Copyright © 2013 Accenture All rights reserved.
  13. 13. 13Finding 4: High performers have a consumer focusHaving developed consumersolutions with new features andproducts that directly add value tothe recipient, high-performingpostal operators realize thatmonetizing the recipient is the nextwave of revenue and thatunderstanding the consumer givesthem a competitive advantage.Copyright © 2013 Accenture All rights reserved.AppointmentwindowsInnovativedeliveryflexibilitySame daydelivery inurban/denseareasHold atnearestretaillocation24/7 lockersfor parcelpickupReturnserviceoptionsDeliveryredirection
  14. 14. 14Finding 5. High performers make changes to their operatingmodel to address monopolistic ghostsAs the mail business becomes more competitive postal organizationswill need to more aggressively address legacy aspects of their operatingmodels.Copyright © 2013 Accenture All rights reserved.
  15. 15. 15Industry impactsDigital mail yet to be exploited• Postal organizations have yet to find theright business model and continue tostruggle with defining a compelling valueproposition for both consumers andmailers.• The success of digital mail is a double-edged sword; while it can attractcustomers, drive significant revenue andencourage profitability, it can also have amaterial, negative impact on physical mailvolumes.Competition from privatepostal operators• Without any obligation to provide auniversal service and with a focus onincreasing mail volumes, private postaloperators (PPOs) offer customized,differentiated products at low cost.• As the postal market undergoes furtherliberalization, PPOs look set to gainmarket share due to their unique andvalue-based propositions, questioning thecommercial viability of existing postalplayers.Copyright © 2013 Accenture All rights reserved.
  16. 16. 16Strategic next stepsCopyright © 2013 Accenture All rights reserved.The Accenture competitive/monopolistic modelPostal organizations must improve their market competitiveness whileaggressively changing their operating models to achieve highperformance.To AWS : could youincrease the font size,we can’t read easily
  17. 17. To discover more about how postal organizations can achieve highperformance, please contact:Brody Buhlerrobert.b.buhler@accenture.comAndre Pharandandre.pharand@accenture.comVineet Narangvineet.narang@accenture.comContact usCopyright © 2013 Accenture All rights reserved. 17