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Here is an excerpt from the article, How to look the future straight in the eye, by Faryal Mirza in Union Postale, the Universal Postal Union's magazine. The article contains an interview with Adrian King, a consultant with Strategia Group.



How has the environment in which the postal sector operates changed in the past few decades?



Adrian King: History shows us that Posts have gone from operating in loosely regulated, structured markets to formally regulated, competitive markets, which are unstructured, in the last 20 years. In the 1990s, most industrialized Posts were concerned with modernizing physical structures in the context of growing volumes, so the key issues were cost and quality. The main things they were concerned with were automation, changing labour processes and increasing quality measurements. Starting from 2000, the main concerns were liberalization, competition and the corporate models being developed to meet those. This was the time to do the normal things to develop a business, such as marketing, pricing and product differentiation. At the same time, these Posts were learning to deal with a much more explicit regulatory environment. Posts that are now doing well are on top of the issues they faced in the 1990s and 2000s. Posts, which are struggling today, have never really solved the problems of those times.



What are the main issues?



Where to position the Post in a market that has become more unstructured is the key issue. For each Post, in the core markets of transactional communication, market communications, parcels and logistics and payments, the strategic question is the same: does the Post expand into providing physical and digital solutions for customers’ underlying business or simply remain a deliverer of physical items? If you think of a product like direct mail, it is clearly competing with a wider market both in media and advertising. There is email and SMS marketing, as well as other forms of online marketing. Similarly, an invoice sent in the post used to say how much the customer owed. Nowadays, an invoice often has a marketing message as well, so that means systems have been merged in the background to enable you to receive personalized marketing messages. Where does the Post fit into a world where traditionally there was the transactional product on one hand and the advertising product on the other and now both messages are integrated? One big challenge is identifying which messaging and logistics systems Posts need for the emerging environment.



Quo vadis?



It is time to look at whether we are merely a provider of direct mail services or if we have a wider business to ply in the data management and capture connected with marketing and marketing messaging. As postal volumes stagnate in industrialized countries, a viable postal system, as we currently know it, will not be sustained simply by transactional mail. Consequently, Posts need to look at opportunities in packet markets, document–management outsourcing, integration into underlying business processes and bridging the physical and digital world by providing authenticated digital delivery infrastructure.



Where do customers fit into the picture?



The key thing for the Post is: how do we continue to have a relationship with the household channel? If we do not have a relationship with the household, why would senders pay us? If you go back to the 1990s, about a third of postal business was business-to-business mail flows. If you look at mail flows now in the majority of Posts, business to consumer accounts for about 70-80 per cent.



To see more of the article, visit: http://news.upu.int/magazine/