Digital Transformation in the Postal, Express, and Parcel Industry

E-commerce, converging technologies, and shifts in local-vs.-global scale are putting extreme pressure on postal, express, and parcel enterprises to digitalize.

Several key digital-centric trends are disrupting the postal, express, and parcel industry.

E-commerce is exploding, and the lines are blurring between traditional services as B2C players encroach upon those in B2B. Further, as networks become more point-to-point and continuous-flow by nature, multiple technologies are expected to converge and significantly alter the way day-to-day operational activities roll out for postal, express, and parcel concerns: the burgeoning Operations 4.0 trend.

Adding to the complexity is the diminishing advantages of local leadership in favor of global scale, while, somewhat paradoxically, receiver intimacy and trust are becoming the new sources of competitive advantage for postal, express, and parcel organizations as demanded by consumers.

Seizing on these opportunities, new digitally advanced entrants are emerging in the space and claiming a share of the most attractive profit pools as the entire value chain splinters. For postal, express, and parcel organizations that are not partially or fully digitally operationalized, this means foundational strategic and tactical frameworks need to be reevaluated and new digital models implemented in order to effectively compete.

Postal, Express, and Parcel’s Digital Solution

The blueprint for transformation draws upon three key digital actions: develop new business models and offerings, digitalize core operations, and build a robust internal digital foundation. For postal, express, and parcel organizations, the success model requires the following:

1. Develop New Business Models and Offerings

  • Customer Experience. Putting in place digital business models and platforms help create deeper customer intimacy while integrating retail offerings across the entire value chain.
  • New Digital Platforms. The value of implementing digital platforms cannot be overstated, as today’s demanding customers assume that digital optimizations are natural elements comprising a postal and parcel organization’s basic suite of offerings, from e-commerce solutions to digital identity for products.

2. Digitalize Core Operations

  • Systems. Modernizing a postal and parcel enterprise’s core application stack and underlying data architecture tees up opportunities to create next-gen solutions and data-driven predictive analytics capabilities.
  • Next-Generation Solutions. Architecting an integrated framework helps boost efficiencies while also increasing service and operations quality within areas like personalization (receive intimacy) and customer centricity. It also uncovers the opportunity to build out more supply chain orchestrator competencies and integrate new last-mile capabilities.
  • Predictive (Network) Analytics. Implementing advanced algorithms and analytics affords optimization opportunities throughout the value chain, from collecting to routing and scheduling, while also enhancing customer centricity.

3. Build a Robust Internal Digital Foundation

  • Talent. To most effectively leverage the power of a digital infrastructure, postal and parcel organizations must target, attract, and retain strong and practiced digital talent that can further develop capabilities internally across business and IT functions.
  • Agility. Catering to ever-changing customer demands means that the entire postal and parcel enterprise needs to be trained on fast-paced, agile solution development.

Meet BCG's Postal, Express, and Parcel Leaders