Three peak season lessons for all posts in 2020

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Posts are only three months out of peak delivery season (November through December), and they’re already thinking about the next one. But before investing in new technology or planning cost saving measures in 2020, it’s worth reflecting on peak season performance in 2019.

What did posts learn during last year’s holiday delivery season?

1. Posts need a smarter way to reduce fixed costs without compromising service levels

With parcel deliveries expected to hit the 100 billion mark this year, posts can’t afford to proceed with a business-as-usual approach. Specifically, this approach means using the existing letter mail infrastructure to deliver parcels.

Despite the annual increase in parcel volumes, this growth isn’t expected to fully compensate for the decline in letter mail revenue. Consequently, posts need a way to cut costs without cutting the quality of service.

A large North American postal operator put this into practice by implementing pick up, drop off (PUDO) locations specifically for the 2019 peak season. In October 2019, the post leveraged third-party partners, such as drug stores and convenience stores, who would manage packages during the holiday seasons. This system had four key advantages:

  • Customers had convenient access to the postal service within their neighborhood and outside regular business hours.
  • Posts could offer extended service through a variable cost business model by paying retail partners based on the number of packages they handled instead of increasing their fixed costs by opening more branches.
  • Posts reduced their last-mile delivery costs, as well as failed delivery costs.
  • Retail partners benefited from increased foot traffic to their stores.

How can posts act on this lesson?

Setting up the IT infrastructure to facilitate a retail network expansion to accommodate peak season volumes is a significant cost for any post, and it’s also entirely unnecessary. There are many cost-effective and future-proof options posts can use. A stable, scalable and secure customer engagement solution can help posts handle seasonal peak volumes and it can easily be extended to retail partners with minimal costs or investments required by the retailer.

By leveraging commercially available services and hardware, such as cloud computing, public internet connectivity and standard enterprise Android mobile devices, posts can dramatically reduce the time to deploy these elastic parcel delivery capabilities.

2. Posts need a data-driven approach to staffing their retail and delivery operations

Postal services are drastically cutting their labor costs and it’s become increasingly clear that they need a better strategy for scheduling. Cuts intended for overall cost savings make it difficult to manage peak season, since posts scramble to hire and train seasonal workers to manage demand.

Posts will need to turn to data science, particularly AI tools, to analyze historical data and make smarter staffing decisions in future postal seasons. Leveraging machine learning to analyze historical retail transactional data can allow the postal operator to identify inefficiencies in their staffing model, reward high performing employees and determine opportunities to train or improve the performance of employees that are underperforming.

In addition, posts need the ability to quickly onboard seasonal retail employees so they can make a valuable contribution to their branch as quickly as possible. With national posts processing millions of packages during the holiday season, this is essential. Leveraging interactive onboarding, training and assessment technologies integrated seamlessly into the retail solutions provides a quick and easy way for postal operators to ensure all employees receive the right training at the right time.

How can posts act on this lesson?

Posts need to invest in the right data analytics tools. A common mistake enterprises make is purchasing technology that isn’t specifically designed for their industry. For instance, if posts want an AI tool, they need one with algorithms tailor made for posts. An effective AI tool with applicable algorithms allows a post to:

  • Use historical data to make accurate predictions about staffing needs down to the specific day or hour.
  • Use historical data to understand the revenue or cost-saving implications of branch-level changes (e.g. Adding one extra employee to a specific branch will increase revenue by 25%).
  • Create an adaptive, optimized digital onboarding experience designed to give new retail employees the exact training they need to hit the ground running.

With these technology-enabled changes, posts can use their existing resources more efficiently during the peak season.

3. Posts need a way to increase the speed of transactions with retail locations

Despite belt-tightening efforts, posts still have fixed costs. Until they convert the majority of their fixed costs to variable costs, posts need to increase the speed of transaction processing within their retail branches. Two main factors that slow down post office transactions are long lines due to limited counter terminals and the inability of customers to access self-serve options.

How can posts act on this lesson?

For the 2020 holiday season, posts must help customers help themselves. Self-serve POS Terminals within branch locations empower customers to post packages on their own, without waiting in massive lines. In addition, posts can use mobile technology to unleash post office employees from dedicated counter terminals. In 2019, a large North American post used mobile point of sale (POS) systems as “queue busters” or “line busters,” raising the average volume of transactions at its branches.

There are many ways for proactive posts to successfully navigate the 2020 peak season

The 2020 holiday season will arrive faster than posts expect, but there is time for business leaders to explore the technology they need. With the right infrastructure, posts can implement the applications required to manage holiday deliveries in a scalable, secure and stable manner.

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About Author

Wayne Haubner is chief technology officer at Escher, the global leader transforming postal operators and couriers. Haubner is a pioneering technology executive and change agent who has a track record for driving enduring results through leadership, agility and continuous innovation. He has a proven track record of building world-class customer-centric engineering organizations by fostering a culture of data-driven continuous improvement and collaboration.

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