Post Offices – Time for a Digital Reinvention
as a Unique Route to Consumer?
By Gary Coyle, a thought leader in the Postal sector

The UK Post Office network is in decline – 5,000 Post Offices have closed over the last 6 years with 8 million fewer weekly customer visits. The Government have promised funding of £1.34 billion over the next four years to help modernise and re-energise the retail network.

In fact, as the largest retail network in the UK, the Post Office now needs to innovate, take some calculated risks and be radical in its approach to adopting a new business model in order to optimise ever challenging consumer demands.
Gary Coyle, a thought leader in the Postal sector offers his ideas on how suppliers can benefit from services that will be provided by local Post Offices by 2020.

The UK Post Office network consisting of 11,800 outlets is fortunate it has had successive Governments that continue to provide significant funding to help support and subsidise the network. With the latest funding announcement of £1.34 billion over the next four years, the Post Office management have been asked to modernise the ailing network.

Surely, now is the time for all stakeholders and suppliers to seize the opportunity and seek to collaborate with Government and Post Office Ltd to present a new retail model that is sustainable and caters for the ever demanding and savvy consumer and in turn, adds social, economic and environmental value to the communities in which they trade.

A declining channel, despite its strong social attachment and trust

Having owned my own Post Office for the last twenty six years and advised Governments and Global Post Office networks over the last eight, I understand the strong social attachment and trust given to the brand by many. The Post Office is still seen as the community hub especially in rural areas where it might be the only retail shop left. That said, there is clear evidence that the Post Office network is in decline – 6,000 fewer Post Offices since 2003, 8 million fewer weekly customers over the last six years, mail volumes have decreased by 25% over the last five years.

So why is this? The internet, email proliferation, Government withdrawing significant contracts, no unique Post Office services, poor associated retail offer – all the above have had a huge impact on the overall business.

New business models, optimised traffic flow, increased access

The Post office new proposed business models are “Post Office Locals” and “Post Office Mains”. Within both models, Post Office services will be integrated into the existing retail side of the business, therefore removing the need for the traditional fortress and screens. This will release more retail space to the retailer and will give the Post Office the opportunity to provide services to the customer over extended shops hours and not the traditional 9 -5.30 hours they currently operate within.

The plan is to modernise 6,000 Post Offices – 4,000 Mains and 2,000 Locals. Funding will be provided by the Post Office/Government to all Sub postmasters that decide to convert to the new models.

First opportunity for suppliers:

 - Incremental space: Sub postmasters will gain new and empty retail area once occupied by the in-store PO fortress
 - Funding: Sub postmasters will receive significant funding to develop a new retail layout
 - Renewal: Sub postmasters will be encouraged to invest and smarten up their current retail offering
 - Range increase: Sub postmasters will be thinking about purchasing new product lines
 - Retailing advice: Sub postmasters will require help with merchandising and new store layouts

Second opportunity for suppliers

The second opportunity is around customer data. The Post Office despite the decline in numbers in recent years still welcomes 21 million people through their doors every week. These customers generally like and trust their Post Office so there is evidently some customer loyalty attached.

A great example - Why has the Tesco club card become the world’s most successful retail loyalty scheme? – Tesco has had the expertise and foresight to develop personal relationships with individual customers and they also really understand their customers’ needs which have been key to customer loyalty and satisfaction.

Added value for stakeholders

The Post Office has a great opportunity and the funding to develop a loyalty scheme (“The Post Office Community Card”) that could add value to the customer, the small business owner, the local community group and other interested stakeholders in local communities.

With NFC technology set to go mainstream over the next few years, tapping in and out with your phone when visiting the Post Office and consumers opting in to receive relevant local offers and coupons to their smart phones gives suppliers much needed data on Post Office customers shopping habits and helps tailor offers and new product launches down to individual post codes and outlets.

A new digital communications role for the Post Office

The Post Office has got to be brave in this latest reinvention, becoming the front office for Government is not enough; it will not generate sufficient additional revenues for Sub postmasters. Post Offices must be positioned as digital and local communications hubs and not viewed simply as just the “community hub” offering a great social service to the local community.

This model is clearly not sustainable. It needs to get out into the heart of the community and offer new services and be the compelling link between community, business and citizen.

In the process, this re-emerging retail channel is capable of becoming a viable alternative route-to-consumer for suppliers wishing to dilute their level of dependence on the major multiples…

Gary Coyle, Founder and Chief Executive, Community Infopoint
Email: gary@communityinfopoint.com
www.communityinfopoint.com

Date published: March 2012