Delivering eCommerce

Our customers are more sophisticated and empowered than ever before enjoying around-the-clock access to information, services and marketplaces that were previously unimagined or out reach.

As a result, they now seek solutions that deliver choice, control and convenience in how, when and where they access our services.

That’s why Australia Post is changing.

Reforming the letters service

The reform of our letters business will allow us to invest our resources in our domestic and international eCommerce capability, creating a new future for our post offices.

In March 2015, the Australian Government announced its support for the regulatory reform of our letters service. This decision was a welcome one, acknowledging that customer behaviour and community expectations have changed significantly since the pre-digital era.

Under the planned reforms, consumers will have the choice of:

• a priority service, delivered according to the existing timetable; or
• a regular service for non-urgent mail to be delivered two business days slower than priority.

Currently, Australia’s basic stamp price is the lowest of any country in the Organisation for Economic Cooperation and Development (OECD). Current pricing does not reflect the true cost of delivering a letter and this must change if Australia Post is to maintain the nationwide reach of our networks and services without government assistance.

While reform is positive and necessary, we also recognise that many members of the Australian community, including the vulnerable and isolated, continue to rely on our mail service. As such, the concession stamp will continue to be offered to eligible Australians at 60 cents for a small letter and the seasonal greeting rate will continue to be offered to all Australians at 65 cents for a small letter.

These changes are critical to enabling future investment in building our capability as a leading eCommerce business, while also preserving our letters service and meeting our Community Service Obligations (CSOs) – just as we have always done.

Reform is not about leaving behind that heritage of delivering; instead it celebrates and reimagines it for the future benefit of our ', our customers and the community.

Building a better future

Achieving these reforms will help us build the robust business we need to provide our people with security and satisfaction. It will also provide opportunity for our employees to experience new career paths, supported by training and mentoring services, as the business transforms.

We are igniting a culture of innovation in the organisation, with a renewed focus on delivering customer experiences and solutions.
As a result, our customers will enjoy a service better suited to their contemporary need for greater choice and convenience.

They will enjoy access to local and international markets where they can buy or sell goods, and have unparalleled choice about where and when those goods will be delivered.

And through the preservation of our post office network, particularly in rural and regional areas, communities throughout Australia will continue to benefit from our presence in their towns.

Creating a more efficient network

The community’s use of letters has been in steep decline since 2008, resulting in a cumulative business loss of $1.3 billion over that time. Without reform, it’s estimated that losses in the letters business over the next decade would amount to an estimated $12 billion*.

Over the past five years we’ve worked hard to minimise and mitigate these losses by optimising the efficiency of our letter delivery network.

Two years ago, we equipped our Posties with hand-held parcel scanners to allow them to deliver small parcels for the first time. At that time, our Posties delivered virtually no parcels; today they deliver around a third of our total parcel volumes. That innovation has kept their pannier bags full and helped underwrite our commitment to keep them delivering five days a week, even as letter volumes continue to decline.

This year, we continued to look for innovative solutions to improve the efficiencies in our mail delivery network and we analysed a range of factors – including workforce profiles, delivery routes and transport used – to determine the optimal delivery design for over 120 individual sites.

We also worked to improve operational efficiency by encouraging employees and management to collaborate to identify smarter ways of working, resulting in the establishment of a range of new initiatives which will deliver cost efficiencies over the next year.

These operational changes have resulted in more efficient networks and significant savings for our letters business, while also prioritising the safety of our people.

While the financial benefits resulting from these changes are important, the efficiency they have delivered is critical to our ongoing ability to deliver the mail on time for the benefit of our customers. This year, we exceeded our Community Service Obligations once again, achieving 94.8 per cent of letters delivered on time against our target of 94 per cent. At the same time we continued to reduce the injury rate in our workplaces.

Investing to become an eCommerce leader

Throughout our history, Australia Post has helped consumers, business and government navigate the social revolutions that have transformed our country.

Today, Australians are embracing the digital revolution and Australia Post is continuing this tradition of responding to community expectations by helping people and businesses get online to shop, pay and deliver – whenever and wherever they choose.

We have always facilitated commerce in Australia and our new strategy of delivering eCommerce to everyone, everywhere, everyday is the natural evolution of that role in the digital era.

As a consequence, we’ve invested more than $2 billion over the past five years to build on our existing capability and create new services to ignite the growth of our eCommerce business.

We’ve brought together Australia Post and StarTrack to develop an unrivalled suite of eCommerce-driven payment, logistics, supply chain and parcel delivery solutions.

Building our parcels business

With the rise of mobile devices, consumers can now shop anywhere and any time with relative ease. Around 75 per cent of the parcels we deliver today are generated by an online order.

But while online shopping has previously driven year-on-year growth in our parcels business, we believe our biggest growth opportunity lies in using our domestic strength and capabilities to expand beyond Australia.

As a result, we are working to create innovative partnerships with international postal organisations, eCommerce marketplaces and global businesses to pursue new growth opportunities in both domestic and overseas markets.

We support Australian businesses to take full advantage of these opportunities and, as Australia’s largest retail and parcel delivery network, we offer an unmatched competitive advantage.

Delivering for our customers remains at the core of what we do. We believe that by powering eCommerce for Australian businesses – and their customers – we will create prosperity for our people, our customers and the community.

Investing for growth

As parcel volumes continue to grow, we are building a world-class network with high standards of service, efficiency and performance.

Thanks to recent investments in our processing systems, we are now equipped to deliver more parcels than ever before. In November 2014, we opened our expanded Sydney and Melbourne Parcel Facilities, which now feature state of the art parcels handling and sorting equipment – improvements that have doubled the processing capacity of these parcel facilities.

The final phase of this expansion is due to be completed ahead of Christmas 2015.

Making it easier to buy, sell and deliver online

Australia Post is working every day to make it easier for Australian consumers to shop online.

We are supporting eCommerce businesses to differentiate themselves at the checkout by offering their customers more choice and control over how they receive their purchases. This year, initiatives included the continued roll out of our 24/7 Parcel Lockers network, and the introduction of extended post office trading hours and Saturday deliveries.

In October 2014, we established a partnership with NetSuite to create an integrated eCommerce solution for their customer community, providing direct access to Australia Post’s shipping and tracking services from the NetSuite platform. This partnership is providing an improved parcel delivery and collection experience for NetSuite’s customers, including access to parcel lockers and parcel collect services.

Through our popular “Business 250 membership” we continued to provide discounts to small businesses that are sending more than 250 parcels per year via “Click and Send” or our “Parcel Send” app.

Delivery choice and convenience

We are always looking for ways to improve our parcel delivery services and timeframes. As a result, in November 2014, we launched a new MyPost Deliveries Account that provides customers with more choice and control over when and where they receive their parcels. The MyPost service gives consumers the ability to track, reschedule or redirect their parcel deliveries from a secure, identity-verified portal.

In November we also launched our Last Mile Notifications service. This involves sending an email or SMS notification to the parcel recipient when they are not home to receive their parcel.

Since the launch approximately 3.5 million customers have received an electronic notification in addition to a physical card. As a result, the average time it takes customers to collect their parcels has reduced significantly.

This year’s Net Promoter Score*, which gauges consumer sentiment for Australia Post products, identified “timeliness of delivery” for parcels as the main driver of satisfaction among respondents (see page 38 of the to 2015 Annual Report PDF).

Last year, the main driver was identified as “effort made for first-time delivery” and the change reflects the efforts we have made to improve our delivery services. It’s just one of the ways we are working to deliver experiences that delight our customers.

Transforming the post office

Just as we have invested in growing our parcels business, we have also focused on reinvigorating the post office to position it for a strong future. Our unrivalled retail network and the last-mile advantage of our 11.4 million delivery points give us a unique strategic advantage.

Maintaining the strength of our network

Australia Post maintains an unrivalled post office and delivery network. Our 4,406 post offices (of which 2,554 are located in rural and regional areas) provide our customers – regardless of where they live – with essential products and services to help them shop, bank, pay bills and connect.

Our 15,591 street posting boxes put mailing a letter to any of our 11.4 million delivery points within easy reach of most Australians.

Like the community we serve, Australia Post values the strength of our network and the trust that Australians place in us to deliver. That’s why, despite the challenges facing our letters business, we continually strive to meet the targets set by our Community Service Obligations.

This year, we were proud to once again exceed these expectations: making deliveries to 98.8 per cent of addresses five days a week (against a target of 98.0 per cent), with 94.8 per cent of letters arriving on time (against a target of 94.0 per cent).