Accenture: “Improving digital performance” is “critical” for post and parcel companies

“Improving digital performance” is “critical” for post and parcel organisations if they are to successfully capturing the revenue potential created by the explosive growth of e-commerce, according to a new report from Accenture. The report, The Value Game-Changer: Digital Performance in the Post and Parcel Industry, examined the digital performance of 31 post and parcel organizations to understand how digital technologies could help generate revenue on pace with the e-commerce marketplace.

In a statement sent to Post&Parcel today (17 April), Accenture said: “Using its Digital Performance Index, Accenture Research quantitatively assessed the level of digital investment and progress across four business functions — “plan” (digital strategy); “make” (digital production and delivery); “sell” (digital customer experience) and “manage” (digital corporate culture and operations). The assessment entailed evaluating 42 business activities, including supply chain, customer service, sales and operations, and more than 100 detailed metrics to determine business performance against industry peers.”

Accenture found that the post and parcel industry showedtronger digital performance than consumer goods and services, energy and insurance industries – but it lagged behind electronics and high tech, communications, retail, banking and utilities.

“While eCommerce is driving a very different digital experience in retail, the shipping and delivery of goods purchased online is not nearly as digitally enabled as in other industries and lacks the investment required to keep up with changing consumer,” said Accenture.

Brody Buhler, who leads Accenture’s global post and parcel business, commented: “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. eCommerce growth is enticing new entrants and investment.  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.”

According to Accenture, the report revealed that the post and parcel industry is not translating digital investments into better financial performance.

Accenture explained: “For example, only 6% of all companies studied, as well as 6% of post and parcel organizations, are considered “Digital High Performers” — combining strong digital performance with strong financial performance. And while the post and parcel industry has 44 percent more “Business Leaders” — organizations with strong financial performance but limited digital enablement than do any of the other industries studied. Only 10% of post and parcel companies are “Digital Leaders” — companies that made significant digital progress but are still working to translate that into financial results.”

Post and parcel organisations score better at planning for digital than executing those plans, according to the report, which calls for additional action to assess and improve results of digital investments and to create a culture that takes full advantage of digital.

“While 90% of posts focus on digital capabilities such as data analytics and predictive modeling in their business strategies and more than 70% have a social media presence for customer interaction, less than 30% have a dedicated budget for digital programs,” said Accenture.

The report showed that digital strategies are just beginning to evolve in the post and parcel industry but will become increasingly important over the next few years. Last-mile delivery organizations currently focused on using digital to drive improved productivity for increased financial performance will need to focus on growth to drive financial performance.

The Accenture report flagged some of the instances where post and parcel companies are using digital technology effectively. These included: Deutsche Post DHL’s Innovation Center in Germany; the US Postal Service’s Informed Delivery service (which emails customers images of the front of their mail the morning the mail will arrive); the Data Services division of Royal Mail (which helps customers with their direct marketing and data cleansing); and improvements UPS has made to “optimize delivery in real-time to make last-mile delivery faster and cheaper”.