How Postals Can Meet Growing Consumer Demands

March 24, 2016

Delivery Integration

Postal operators face tough decisions on a daily basis. Decisions such as, how can they continue to meet the world's changing needs, and how they will be able to remain financially stable? Such decisions require industry knowledge, strategic planning, and feedback analysis. While it is important to understand what the world wants from postal operators, it is equally as important to understand how you can meet its demands. 

Parcel delivery has seen enormous growth throughout the world. This is primarily due to the exponential growth we are experiencing in eCommerce. As eCommerce continues to grow (global eCommerce sales are expected to exceed $3.5 trillion within the next five years) parcel volumes increase. Currently, eCommerce transactions represent 6.7% of total retail sales. According to emarketer.com, that figure will grow to 8.8% globally by 2018. 

From a consumer standpoint, eCommerce makes sense. Do I take the time to leave my residence, drive to my destination, push through crowds of other consumers, in order to purchase one item that I need? Or, does it make more sense to pull out my phone that I already look at 100 times throughout the day, and simpy click a button to purchase that same item.

It is funny though, as consumers, we are willing to wait X amount of days for our package to arrive, when we could have taken an hour or two out of our day to have that item right then and there. Of course, this varies based on geographical location, or the availibility of such items based on your location. Nontheless, eCommerce has suggested that convenience outweighs urgency. Well, this too is changing.

As I mentioned in a previous blog, consumers are demanding more when it comes to speed of delivery. Soon, consumers will be expecting their goods delivered in a matter of days, regardless of where it is coming from. But it doesn't stop at speed of delivery. Consumers are also demanding more when it comes to delivery pricing. Essentially, consumers want free same day delivery.

Is such a feat capable of obtaining? Regardless of whether you believe it to be or not, the day will come where such execution is the standard.

So what does this mean for postal operators? As I mentioned in the opening paragraph, it is important to understand what the world wants, but it is equally as important to understand how you can meet its demands. 

There are several known ways postals can add value to their overall operation in order to keep up with growing consumer demands. One may resort immediately to weekend delivery as a standard option. Other initatives such as retail pick up and drop off locations, parcel lockers, and parcel shops could also prove beneficial in the future. 

Arguably, above all is the need to invest in innovative technologies that improve service quality. This includes: accuracy, timing, capability, reliability, and some I may have neglected to mention. Such innovations can lead to achieving the highest possible performance in the industry, while maintaining low operating costs and maximizing profitability. 

Importantly, these technologies allow postals to scale, without the burden of further investments. In other words, as eCommerce continues to grow, and parcel volumes continue to increase, your capabilities follow suit without denting your pocket. Some post and parcel companies have already started investing in enabling differentiated solutions, and as a result, are gaining significant market share.  

Perhaps the most beneficial aspect of leveraging such technologies is increasing your cross-border capabilities. According to Accenture, cross-border B2C eCommerce is expected to grow more than 27 percent annually. Below, you can find a graph that illustrates the B2C cross-border market by 2020. 

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The important thing postal operators must take away from this, is that in order to remain relevant and competitive within the industry, they must invest in solutions that will improve operations in order to meet consumer demands. Gone are the days where it's acceptable to standardise processes around familiar systems and technologies. The constant evolution and balancing act can be challenge, but one that keeps things interesting.

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