Transformation of the Retail Network: Deutsche Post s Face to the Customer. Wolfgang Pickavé, 11th Königswinter Seminar, November 25, 2008

Transcription

1 Transformation of the Retail Network: Deutsche Post s Face to the Customer Wolfgang Pickavé, 11th Königswinter Seminar, November 25, 2008

2 How a Deutsche Post retail outlet today definitely does not look like 11th Königswinter Seminar November 25, 2008 Page 2

3 Agenda 1. The Transformation Process 2. The Challenges 3. How Deutsche Post meets the Challenges 11th Königswinter Seminar November 25, 2008 Page 3

4 1. The Transformation Process 11th Königswinter Seminar November 25, 2008 Page 4

5 Transformation of Deutsche Post s retail outlets was part of the overall restructuring of the company Letter 328 sorting stations 11,000 delivery bases Parcel 140 sorting centers Up to 9 handling steps Retail Outlets 29,299 outlets Insufficient opening hours Postal Services in Germany Low quality Poor customer service Low automation No IT support Letter 82 state-of-the-art mail sorting centers 3,700 delivery bases Parcel 33 standardized parcel sorting centers Max. 3 handling steps Retail Outlets ~ 14,000 outlets ~ 750 Deutsche Post outlets 855 Postbank Finance Centers ~ 3,800 Post Service outlets ~ 7,200 Partner outlets ~ 940 Postpoints *) 100 Business Mail Access Points *) 100 Access Points for large volumes 340 Sales Points for letter and parcel stamps *) 2-3 m customers/day High quality Long opening hours (Ø 42 h /week) High customer satisfaction and loyalty *) Pilot project 11th Königswinter Seminar November 25, 2008 Page 5

6 Deutsche Post s retail network strategy at a glance First Mile Initiative Cost reduction and quality improvements Reducing the number of retail outlets Starting to transform Deutsche Post-operated retail outlets into partner-operated outlets Improving service quality 2 Broadening the sales base Improving the sales performance regarding financial services and new services Employing and training financial consultants Launching the Retail Outlets Quantum Jump- Program for further cost reduction Completing the transformation of Deutsche Post operated retail outlets into partneroperated outlets (by the end of 2011) Improving ubiquity both in terms of geographical coverage and opening hours Further improving quality average opening hours waiting times 11th Königswinter Seminar November 25, 2008 Page 6

7 2. The Challenges 11th Königswinter Seminar November 25, 2008 Page 7

8 At least three challenges are impacting Deutsche Post s retail strategy 1. Universal service regulation Comprehensive set of provisions re the retail network Provision which services to be offered in the outlets 2. Evolving competition in postal markets High market shares of Deutsche Post s competitors Evolving retail networks of Deutsche Post s competitors 3. Changing customer behavior Competition in the broader market of communication services Impact on Services and sales Outlet formats Retail network Regulation (?) The web 2.0 experience shaping customer expectations 11th Königswinter Seminar November 25, 2008 Page 8

9 When defining its retail strategy Deutsche Post has to find the right balance between regulation and market driven decisions Network density Retail network driven by market forces only Retail network driven by regulation only!! Customer demand 11th Königswinter Seminar November 25, 2008 Page 9

10 Deutsche Post s retail network has to comply with a comprehensive universal service regulation Scope Letter mail up to 2,000g (incl. direct mail) Insured, registered, expedited delivery, cash-on-delivery items Parcels up to 20kg Press items (newspapers, periodicals) Access Retail outlets - Minimum of 12,000 fixed-location facilities in which all universal services for letter mail and parcel mail are offered - At least one outlet in municipalities with > 2,000 inhabitants - In municipalities with > 4,000 accessible at a distance of max. 2,000 meters - In rural districts at least one outlet for each area of 80 square kilometres - At least one outlet in urban areas of 2,000 inhabitants (self commitment) Letter boxes - At least 108,000 letter boxes (self commitment) - Max 1,000 meters to reach a letter box in urban areas - One clearance per working day and - in line with demand - on Sundays and bank holidays Mobile post service in all cities without fixed-location facility 11th Königswinter Seminar November 25, 2008 Page 10

11 Letter Mail Market in Germany: Competitors have already gained significant market shares Revenues (in m ) Market share (in %) 10,000 9,839 10,041 10,266 10,237 10,164 9,900 9,994 9,863 10,073 10,060 9,000 8,000 9,751 9,920 10,092 9,988 9,859 9,512 9,462 9,118 9,017 8,786 7,000 6,000 5,000 4,000 3,000 2,000 1, ,056 1, (7.6%) (10.5%) (12.9%) (0.8%) (1.3%) (1.7%) (2.4%) (3.0%) (3.9%) (5.3%) Total market Deutsche Post Licensees Source: NRA 11th Königswinter Seminar November 25, 2008 Page 11

12 Competition in the German letter mail market is already more intensive than in other European countries Market shares addressed letter mail services in 2007 (volume) FMO since 2008 by 2011 since (Intra-city open) since 2006 since < 1% Market shares competitors 10,4% (14%) 9% 8% 20% Market shares incumbents 89,6% 86% 91% 92% 80% 100% 100% Germany Netherlands Sweden Spain UK* Finland France Source: ECORYS incl. magazines and periodicals Collection (downstream access) End-to-End 11th Königswinter Seminar November 25, 2008 Page 12

13 Competitors continue to expand their retail network in Germany Provider Hermes GLS DPD UPS 12/ ,248 3,486 1, / ,393 4,654 2, /2007: PIN and Sparkassen-Banks start co-operation (e.g. in Leipzig & Siegen) Handelsblatt : Hermes gets wind of new chances at letter mail market PickPoint PIN Packeteria 1, , GLS Logistic plans 16,000 parcel acceptance points within the upcoming years Total DPAG ** 16,347 13,042 23,321 14,016 Financial Times : Paketeria and the Volksbank- Group start co-operation (up-tonow 5 new outlets in Lower Saxony) * incl. Otto-Shops ** Sum of Postbank-, Deutsche Post -, partner- and Post-Service-outlets, large customer and business customers acceptance points, pilot of Postpoint and Sales Point for stamps 11th Königswinter Seminar November 25, 2008 Page 13

14 Deutsche Post must meet universal service requirements both in urban and rural areas, competitors seem to prefer urban areas Deutsche Post Hermes 11th Königswinter Seminar November 25, 2008 Page 14

15 Growth of volume is far ahead of domestic letter mail volume Development of domestic letter mail and volumes (in bn items) Letter mail 6,110 1,629 1,622 2,267 1,556 1,528 2,731 1,549 3,209 1,591 4,053 1,635 4,551 4, % 1,646 1, % Source: GfK Private customer panel, Basis 64m Germans older than 10 11th Königswinter Seminar November 25, 2008 Page 15

16 3. How Deutsche Post meets the Challenges 11th Königswinter Seminar November 25, 2008 Page 16

17 Five established outlet formats guarantee the nation wide universal service Deutsche Post AG - Retail Outlet Provides all postal products and services of Deutsche Post as well as financial services of Postbank. Usually telecommunication and stationary products are also available Postbank AG Financial Outlet Provides all postal products and services of Deutsche Post as well as customized financial services of Postbank. Usually telecommunication and stationary products are also available Partner Outlet Provides nearly all postal products and services of Deutsche Post. Usually they also offer financial services for Postbank Post Service Outlet Provides selection of basic postal products and services however, no financial services of Postbank Post Office For Large Volumes Of Mail Provides a selection of postal products and services especially for the needs of business customers however, no financial services of Postbank 11th Königswinter Seminar November 25, 2008 Page 17

18 Deutsche Post has to adapt its services and retail outlets to a changing customer behavior Web Web and and competition competition shape shape customer customer expectations expectations which which have have an an impact impact on on postal postal products products and and services services Market place internet provides advice, services and sales 24/7 Proximity, easy and convenient accessibility, even together with other services Competitors enter the market successfully via low prices Long business hours of outlets especially during the evenings Due to flat rates consumers perceive communication as free of charge 24/7 access to self-service facilities Low prices 11th Königswinter Seminar November 25, 2008 Page 18

19 The answer: Improvement of ubiquity and availability as well as further cost reduction Specific services for private customers and small business customers as well as for large business customers with improved accessibility in terms of location & business hours customer oriented range of products short waiting time and consequently significant cost reduction For private customers and small business customers: POSTPOINT: Sales and acceptance of basic day-to-day postal products as e.g. stamps (letters and parcels) Sales Point: Sales point for the most requested stamps (letters & parcels) For large business customers: Acceptance Point for Business Mail: Acceptance of business mail, especially for larger volumes of mail Further stepwise migration from own-operated to partner-operated retail outlets 11th Königswinter Seminar November 25, 2008 Page 19

20 Postpoint: Additional convenience format for private customers (I) POSTPOINT an additional outlet format (in addition to those required by regulation) In areas with a high customer demand (city centers, districts, local centers) Sales and acceptance of letter mail and parcel products as day-to-day demand Implementation as an agency at retailers Target 2008: ~ 1,100 Objectives: Proximity, business hours like retailers, short waiting times Enhancing Deutsche Post s presence 11th Königswinter Seminar November 25, 2008 Page page 20

21 Postpoint: Additional convenience format for private customers (II) Letter mail products - Sets of letter mail stamps and single stamps - PLUSBRIEF and PLUSKARTE (pre-paid envelopes and cards) - EINSCHREIBEN-Set, NACHSENDESERVICE-Set and LAGERSERVICE-Set (self-service pack for registered mail, for redirecting and for storage service) DHL-products - Stamps for small parcels, parcels and for further weight steps - PACKSETS (cardboard boxes) - PLUSPÄCKCHEN (pre-paid cardboard boxes for small parcels) Services - Acceptance of stamped and unstamped letters and small parcels/parcels - Acceptance of items to be returned - Information about products and postal rates - Hand-out of white pages 11th Königswinter Seminar November 25, 2008 Page page 21

22 Sales points: Additional convenience formats for private customers Sales points as an additional service Sale of stamps for letters and parcels Operated by retailers (agency) Target 2008: ~ 2,000 Objectives: To further increase of the availability of postal services for private customers (combined with street-letter-box and parcel-box) To further enhance Deutsche Post s presence in the retail sector 11th Königswinter Seminar November 25, 2008 Page page 22

23 Acceptance Point for Business Mail: Additional format for larger volume of mail Acceptance points for business mail: Acceptance of business mail (especially large volumes) Locations with high business density Operated by Deutsche Post Target 2008: > 100 Objective: Proximity to business customers with high volumes 11th Königswinter Seminar November 25, 2008 Page 23

24 Self-service (I): Available around the clock PACKSTATION Acceptance and hand-out of parcels and small parcels Number of PACKSTATIONS target 2008: 1,400 Paketbox Acceptance of pre-paid parcels, small parcels and items to be returned to sender Number of Paketboxes: target 2008: 1,000 11th Königswinter Seminar November 25, 2008 Page page 24

25 Self-service (I): Available around the clock Post 24/7 - Stamp dispenser -letter-box - PACKSTATION or Paketbox, - at some locations an ATM Currently in pilot phase: 50 Post 24/7-facilities 11th Königswinter Seminar November 25, 2008 Page page 25

26 Thank you for your attention. 11th Königswinter Seminar November 25, 2008 Page 26