New Zealand Post chief executive laments image

New Zealand Post still suffers from the “postie” tag despite heavy investment in electronic networks and infrastructure to meet the future, its new chief executive, John Allen, said.

Mr Allen, 42, took over from Elmar Toime nearly a month ago and is set to educate the market on New Zealand Post’s electronic capabilities.

The former head of New Zealand Post’s Letters and Enterprise group said letters and courier services were increasingly being conducted electronically and via the Internet, but New Zealand Post’s capability in that area had not been communicated to customers well enough in the past.

While income from the letters would decline long term, Kiwibank would underpin the group’s performance in the future.

The bank, which was controversially launched with $80 million of tax payer money early last year had helped refresh the New Zealand Post brand. “That act of deciding `we are going to go into banking’ has done a whole lot more for the group than simply creating a strong revenue opportunity and strong profit opportunity for us in the future.”

Mr Allen said he had been handed a New Zealand Post in good heart by Mr Toime, who has become deputy executive chairman of Britain’s Royal Mail.

The strategies of the past decade, which had diversified New Zealand Post from its core letters business to developing a courier service, starting Kiwibank, and moving into electronic information management, had provided the building blocks for future growth, he said.

“The challenge for us now is to build on that foundation. It requires us to get much closer to our customers, listen to them, understand what they need in their business, work with them to unlock new markets, and find new ways for them to market more effectively.”

Getting to grips with the various strings to the company’s bow and how they could collectively better service customer needs “seems to me to be one of the major challenges of the group as we move forward”.

Customers had to feel that they did not have to “give away the trust and confidence” they associated with New Zealand Post with a move to its online services.

While the letter would lose its dominant position as the premium postal service Fast Post would be revamped in the next few months to better differentiate it from standard mail.

Fast Post makes up less than 10 per cent of the total mail volumes, mainly because of the good performance of standard mail.

Transend, which Mr Allen was charged with pulling back into line after lavish spending by previous management and contract problems, would continue to be an important arm of the business, despite a chequered past.

Apart from giving the group an international consultancy service, especially for its mail processing and delivery capability, it also provided exposure to new thinking in other parts of the world and reduced the risk of becoming too wrapped up in its own successes, Mr Allen said.

New Zealand Post had a strong third quarter to March 31 with domestic mail volumes up slightly on the same time last year.

No financial figures were given, but Mr Allen said the company was on track to beat last year’s $21.9 million full year profit.

Kiwibank continued to grow faster than expected with nearly 140,000 customers signed up, though the daily growth rate had slowed from 500 a day to between 300 and 350 a day.