Market deregulation presents opportunities for postal companies. José Leal at CTT and Tiago Conceição, at Zetes Portugal, discuss.
Why is it important for the postal services industry to diversify their business?
José Leal, Responsible for Innovation and Technological Development at CTT: Society is changing rapidly and the new generation of consumers, generation Z, have very different behaviours. CTT needs to reach out to this new "ultra connected" audience for our long-term future. But to do that successfully, we need to understand what services they need and the way they want to live their lives.
Tiago Conceição, Country Manager at Zetes in Portugal: Some postal companies have been more forward thinking than others and CTT represents a good example of a provider that has recognised the urgent need to innovate and its diversification is well underway.
What are the main drivers for the changes currently taking place?
José Leal: Probably the biggest single change is the way communication processes have altered. Firstly as a result of email and now the proliferation of social networking. This requires careful consideration about how postal companies might reach out to the next generation of customers.
Tiago Conceição: For postal companies adjusting to liberalisation and the decline of their traditional business, the preference for electronic communication has created a very interesting array of competitors from Apple and Google to Facebook and Twitter.
Which assets do the postal services possess and how will they help with diversification of the business?
José Leal: People, our enormous reach and the trust we have across the population are our biggest assets. People work longer hours than ever and have increasingly less free time so we need to diversify by offering expanded opening hours and different services to help them become more time-efficient. Because our workforce is part of the community and understands these issues it can help us to understand how best to diversify with a range of what we describe as ‘mobile citizen’ services.
How can auto ID help the postal services with this diversification?
Tiago Conceição: Recent years have brought a huge rise in the use of mobile devices, which empower field based workers to become more efficient by giving the ability to capture data very accurately at source, reducing paperwork and improving customer service. For postal companies the improved efficiency and accuracy of field mobility solutions brings much lower operational costs. In other hand, Postal needs to “mobilize” new services in order to create postal value added and to increase the turnover.
José Leal: Through its existing network of post offices and postal workers is the ability for CTT to evolve into a ‘citizen services provider’ with a range of offerings designed to make people’s lives easier by using auto ID systems. We are in the process of piloting new mobile citizen applications to prove the concept.
What types of services do you envision?
José Leal: In the future we could pay our bills, have the electricity meter read or organise a range of other household services through CTT. And since most rugged smart phones include a powerful GPS and camera as standard, it’s also feasible for postal companies to become local community wardens, helping to keep our towns rubbish and graffiti free.
"In the future we could pay our bills, have the electricity meter read or organise a range of other household services through CTT."
Tiago Conceição: In fact, this idea has already been applied in London where the Mayor has launched a ‘Love Clean London’ scheme ahead of the 2012 Olympics. Londoners can download a smart-phone application (app) and upload images and texts that alert local councils by email to problems like defaced buildings or illegally dumped rubbish. Postal companies are perfectly placed to diversify this and would be remunerated through cost savings made by the local authorities.
Where else could auto ID systems offer commercial benefits to postal companies?
Tiago Conceição: E-commerce services are an obvious opportunity because when buying online, consumers have such high expectations. They assume, and rightly so, to get their goods delivered securely and at a time when it is most convenient for them. They do not want the bother of cumbersome returns processes so there is the potential to forge partnerships with retailers and offer a secure delivery and pick up for returns service.
What happens with traditional activities, are these evolving too?
José Leal: Our traditional services have declined and continue to do so because of all the alternatives. Gradual liberalisation of the postal sector started some time ago in Portugal and has gone a long way to helping us evolve our business. Over the past few years we’ve transformed our culture to become much more customer orientated. With this, our ability to innovate has improved and we are already seeing the rewards of this changed mindset.
How important are electronic proof of delivery systems for you?
José Leal: These solutions are key to ensuring the quality and consistency of our services. We have been investing in proof of delivery systems for the past 15 years and were the first postal service provider in Portugal to implement both a proof of delivery system and online track and trace for customers. Although other companies have now adopted electronic proof of delivery, we are the only postal company to offer it across the entire country and not just major cities. Now we are trying to simplify the way to authenticate the recipients of parcels we deliver and see the new chip-based ID cards as a key part of the solution. It is an important part of our brand promise to can guarantee the right goods are delivered to the right person.
Tiago Conceição: We have been working with CTT for a number of years, initially with the implementation of its electronic proof of delivery system. Most recently we were selected to be their partner for the prototype mobility project in which we are exploring the feasibility of new services where some of them are based upon the concept of a mobile citizen portal.
What are the benefits you are getting from auto ID solutions?
José Leal: One of the biggest is from track and trace and the ability to verify with the greatest degree of accuracy possible, recipient identity. As well as giving a better service to customers, this makes life easier for employees by improving data capture accuracy and ease of collection.
What benefits do you expect them to deliver in the future?
José Leal: Once you start implementing auto ID projects and begin to appreciate the benefits, you uncover many other possible opportunities for applications which ultimately lower costs and help us become closer with the customer. That has been our experience and we do not anticipate it will change.
Tiago Conceição: Lower costs and the ability to widen customer reach and access are intrinsic benefits of using auto ID solutions and will ensure the long term survival of postal companies.
"Once you start implementing auto ID projects and begin to appreciate the benefits, you uncover many other possible opportunities."
How will you track the results?
José Leal: We anticipate a 3 to 4 year return on our investments in electronic data capture technology through a reduction in the need for administrative resources and business expansion, by being able to reach customers which we cannot currently. Already as the organisation has become more sustainable, we have improved our profitability and in the past 5 years, generated significant returns for the Portuguese government, our primary investor. So now we are actively contributing to the economy and wealth of the country.