Post And Parcel Missing Out On Digitization, Says Accenture

Of all of the industries impacted by the rise in eCommerce, your local post office is among the biggest targets. The post and parcel industry stands to gain much from the eCommerce boom, says consulting and professionals services company Accenture, but a new report by the firm notes that a lack of back-office digitization is stifling the industry’s ability to stay on top — and profit.

In a new paper, The Value Game-Changer: Digital Performance in the Post and Parcel Industry, Accenture warns that back-office digitization correlates to higher financial performance — yet 60 percent of businesses surveyed in the Accenture Digital Performance Index admitted they had neither achieved strong digital performance nor financial high performance.

Just 6 percent of those surveyed said they have combined financial and digital success.

Reflecting on the results, Accenture Global Post and Parcel Lead Brody Buhler noted that digitization within this sector is paramount to remaining relevant.

“As the pace of digital change is accelerating daily, last-mile delivery companies will need to leverage digital solutions to remain relevant and competitive in a fast-changing market,” the executive said in a statement. “This growth and competition will force post and parcel organizations to become more digital to create the agility and flexibility they will need. And those same digital capabilities will be essential to creating the growth they’ll need to achieve high performance.”

Technologies like the cloud, mobile, Big Data, robotics and other innovations are key focuses for businesses across all industries. Interestingly, the post and parcel sector is better than other industries — including energy, consumer goods and services, and insurance — when it comes to its digital performance. But compared to high-tech, communications, banking, utilities and retail, post and parcel falls flat.

Further, the post and parcel space is actually quite good at planning for digital strategy — but is not translating investments into digital tools into better financial performance. The industry, Accenture found, ranks strong as having more “business leaders” than other industries — meaning post and parcel scores well with strong financial performance but lags in digital enablement. Just 10 percent are considered “digital leaders,” which are those firms that not only make progress in implementing new digital tools, but continue to work to translate those investments into financial gains.

Indeed, technology is far from ignored within the post and parcel space, as 90 percent of companies surveyed said they focus on digital capabilities around data analytics and predictive modeling. More than 70 percent said they have a social media presence.

But less than a third told Accenture they have a dedicated budget for digital programs.

While the impact of the rise of eCommerce has reverberated across industries for several years now, impacting processes like ePayments, supply chain management and logistics, the post and parcel industry, Accenture said, is just beginning to realize the benefits of technology.

The report highlighted some of the successes of existing post and parcel companies today. For instance, the U.S. Postal Service Informed Delivery combines mobile advertising with its delivery solutions to provide an omnichannel service to customers. In Germany, Deutsche Post DHL’s Innovation Center facilitates the adoption of technology by working with startups and corporate partners to test new innovations designed for the post and parcel space.

Further, UPS has made several investments in innovation, while the U.K.’s Royal Mail has launched a Data Services unit to harness the power of big data to help businesses improve their marketing efforts, boost ROI and protect customer data.

Some of these investments stretch into the world of payments and fintech, too. In 2015, for example, Advanced Payment Solutions inked a deal with the U.K. Post Office to support APS banking services with the business and consumer customers of the postal firm.

But other examples reveal room for improvement. For instance, a recent report by the inspector general found that the U.S. Postal Service’s use of fleet cards is leading to millions of dollars in questionable purchases, signaling a need for the company to integrate digital, automated fleet card and employee spend management solutions in the back office.