Strategy to win in parcels and ensure a sustainable mail business
PostNord’s range of services and business concept is based on having a unique network for e-commerce logistics, traditional logistics and letter distribution, with an ever-increasing degree of digital content.
Since Posten AB and Post Danmark A/S merged in 2009, the market and the conditions affecting the business have altered dramatically. Based on a clear strategy, PostNord has established itself as a competitive logistics operator with a strong focus on the growing e-commerce sector. At the same time, considerably lower letter volumes have necessitated a radical restructuring of the organization to ensure that a good postal service is maintained in Sweden and Denmark.
PostNord’s business is influenced by two opposing trends. While we are facing major challenges in the letters sector, which is subject to licensing, we are uniquely positioned to continue to develop our e-commerce and logistics business, which is a sector experiencing strong growth. The growth is driven by new technical solutions and the demands of customers and consumers for delivery reliability, convenience and solutions that suit them.
In line with changing customer needs and increased competition, there is a need for higher productivity, better cost-effectiveness and an improved brand. To cope with the great pressure to change resulting from shifting external circumstances, a more focused strategy is required. PostNord is undergoing a journey of change, to adapt to decreasing letter volumes and new customer needs in the area of e-commerce and parcel distribution. Changes are currently ongoing in all major parts of the business, including changes to infrastructure, capacity, the range of services and staff strength.
PostNord is adjusting its communications business to fit the need for letter services and the level of service that is reasonable given the costs, and is continuously improving its range of products and services in e-commerce and logistics, with its digital initiatives.
PostNord’s strategic goals, together with its purpose and values, are of prime importance in guiding what we do and how we do it.
A review was carried out by the owners during the year 2019, with a more focused strategic direction being drawn up for the Group. This direction involves having a greater focus on our core business of parcels and letters.
The PostNord strategic priorities are to continue to be a market leader in parcel distribution and e-commerce in the Nordic region, as well as working to become the industry cost leader. In addition, we aim toward a financially sustainable, demand-driven letter business that creates value for citizens, companies and institutions.
Succeeding in e-commerce and parcels
Our customers and consumers are constantly making ever greater demands regarding flexibility, choice and price. They want help with simplifying their lives, for example by being able to shop when and where they want, with a huge selection of products, at a good price. After that, they want to receive their goods quickly, be able to choose where these should be delivered or collected, and not have to adjust their own schedules to fit the delivery time. And, preferably with a sustainable delivery.
PostNord currently has a leading position in e-commerce and parcels, and aims to strengthen this position. This includes making good use of our unique Nordic network, further developing our range of products and services, and strengthening our relationship with recipients, so that we can make their daily lives easier. We aim to grow profitably and create value for our shareholders, customers and consumers. Simplifying daily life for our customers and their customers characterizes the development of our offering and interfaces.
A financially sustainable and demand-driven communication business
PostNord will develop its leading position in communication services, in all channels. While we optimize and adapt our physical letters business, we are also introducing digital services and services combining physical and digital communication.
Physical letters continue to be an efficient and valued distribution channel for administrative and market communication. Increasing digitalization means that letter volumes are declining at an increasing rate. This poses a challenge in terms of reinvesting in and maintaining a national letter distribution network. In the long term, price increases, a changed level of service or national support will be needed.
Our strategic aim for the letters business is therefore to run a financially sustainable business that is tailored to the needs of our customers, regardless of whether this means deliveries are made once a week or every day. We carry out our assignment with pride, to create value for our customers and recipients of letters.
Enablers for our strategy
Taking into account the strong pressure to change that we are experiencing, we have defined six critical enablers for our strategy:
- Brand turn-around
A strong brand is imperative to remain market leaders in the growing parcel market as consumers increasingly gain more decision power of the carrier.
- Leadership and culture transformation
A high pace of change requires continued and increased investment in leadership at all levels of the organization.
- Overhead productivity and cost focus
The digitalization of the mail business, as well as increased competition and changing customer needs in the area of e-commerce and parcel distribution, place demands on the company in terms of more efficient administrative functions and an effective IT environment.
- Cash management and courage to invest
With the expected decline in letter volumes, we need to have a clearer focus on cash flow and be financially ready to invest in our growth areas.
- Structured transformation set-up
To deliver our change programs, we have defined a structured process and organization for achieving progress, as well as for reporting and monitoring.
- Clear sustainability agenda
Our goals are based on the UN's global goals for sustainable development. Our ambitious agenda includes being a leader in climate change in our industry. We aim for PostNord to be fossil-free by 2030.