July 20, 2016 RARC-WP-16-006
- The Postal Service is among the top postal operators in digital services that enhance the core letter and parcel business, but it lags behind in terms of revenue-generating pure digital services.
- Despite legal constraints prohibiting the provision of non-postal services, the Postal Service should fortify its digital strategy.
- The future postal digital strategy would be based on four building blocks: increasing the use of data to optimize operations and build a more data-rich environment for customers; speeding up the digitization of its "physical" products; rejuvenating its limited portfolio of purely digital services, and accelerating digital transformation.
From the 1980s to the early 2000s the Postal Service was an early innovator in pure digital services, like secure email or electronic payments. Today, the Postal Service’s offering of pure digital services is limited.
Based on the results of the 2015 Universal Postal Union “Measuring Postal eServices Development” survey, our paper examines how major global posts have navigated the waves of digital innovation and then compares the Postal Service to these operators.
When it comes to revenue-generating pure digital services, the Postal Service lags behind many of its peers, such as the Swiss, Danish or French posts. It is hindered by a legal framework that doesn’t allow it to enter into new non-postal services and a strategic and cultural focus on the physical core business. For the most part, the Postal Service has refocused its digital efforts on enhancing core products and services — and ranks among the top posts in this area.
Even within a constrained regulatory environment, the Postal Service still has room to advance a transformative digital strategy. The paper argues for a digital strategy around four building blocks:
- Leveraging data and the Internet of Postal Things to gain more real-time control over fleet and operations, and build more customer-centric and information-rich value environment.
- Digitally enhance core products and services, for example, developing a connected mailbox equipped with sensors that could enable temperature-sensitive deliveries or monitor delivery and pickup times.
- Rejuvenate its digital portfolio of revenue-generating digital services, such as by modernizing legacy products like hybrid mail, the Electronic PostMark (EPM), or electronic money transfers. New use cases for these products could also be explored, such as a secure supply chain assurance solution based on the EPM.
- Accelerate digital transformation by adopting best practices when it comes to stimulating digital innovation from within, or the Postal Service could learn to partner with nimble external innovators, as some foreign posts have done.