In our previous blog post, we discussed three recent trends and the opportunity this presents to Posts to diversify services as a way to create more revenue streams. In this blog post, we’ll discuss how this leads Posts to become digital aggregators of services.
Diversifying Services: Types of Services
First, let’s review the types of services Posts can diversify into. Government services that some Posts are already offering directly to their customers are everything from dog to fishing licenses, to social payments, passports, bill payments to government or utilities providers, property taxes and more. But the foundation for these services opens up the opportunity to offer more lucrative financial services products like insurance, bank accounts, investment accounts, loans/lines of credit, credit cards, mortgages, money transfers, foreign currency and more.
There are many synergies that exist to justify a deeper partnership between Posts and government entities and for Posts to offer financial services. The case for offering government services is that a common history and understanding of government functions and processes helps accelerate the partnership, but what is it that truly makes this a profitable endeavor for Posts to consider? From a competition standpoint, Posts are already viewed by customers as a trusted intermediary and the size and scale of their existing operations give Posts a unique advantage that can’t be easily replicated by other industry peers. The same can be said with regards to financial services. Posts are viewed as large, trusted, stable entities. And lastly, but perhaps most important, the technology foundation that Posts put in place to offer government services, opens the door for Posts to easily diversify into other more lucrative opportunities such as financial services like banking and insurance products.
For many Posts, offering additional services is a great path forward – the best way for Posts to increase revenues and profitability. And many Posts are doing this successfully with Escher’s unified customer engagement platform, offering traditional post office services, government, and financial services from the single Riposte platform.
If we look back at what has been a successful business model in the recent past, we could say that Posts which have maintained a customer-centric view, have for the most part, been successful. These Posts have been able to pivot quickly, adapt to evolving customer preferences, leveraging technology to do so. These Posts have been able to engage customers anywhere, anytime, across many different channels and physical locations such as counter, kiosk, and PUDO locations, offering modes of engagement suited to the customer’s preferences.
While this business model will continue to serve Posts and their customers well into the future, Posts additionally need to now transition from being a physical aggregator of services to being more of an aggregator of digital services. By taking this approach, Posts don’t need to be tethered to any physical location or unit and enable customers to engage with them in a truly “anywhere, anytime” way online through the Post’s portal or mobile app. In effect, digital transformation along this path will lead a Post toward boundaryless business opportunities – offering services that compete effectively with the best fintechs of the world, offering digital government services, having the infrastructure to serve the unbanked, becoming a trusted partner in government efforts to create smart cities around the world, and operating effectively through a pandemic. This is all made possible with this approach.
Laying the groundwork for adding government services to a Post’s offering, leads to the ability to then offer financial services. Together, these additional services will help increase revenue across the postal network. However, one thing the pandemic did was accelerate the need for the digitization of services. Offering postal services, government and financial services is the right way forward, but traditionally these have been “bound” to physical channels or touchpoints. The postal operator of the future (which is today) needs to provide access to all services (postal, government, and financial) online through a portal or mobile app. We architected the Riposte unified engagement platform to be available anywhere, anytime on any channel, device, location, or online access point including any mobile device. In short, to enable Posts to move from being physical aggregators of services to aggregators of digital services.
When Posts transition to become aggregators of digital services, they create many more opportunities previously unavailable. Customers can now choose how to interact with your Post (digitally or in physical locations) and can do so now across many more channels. The digital transformation itself improves operational efficiencies through better automation, real-time data analytics, AI and machine learning and an overall reduction in complexities, allowing for greater focus on innovation. Your retail network in effect become more agile in nature, able to adapt quickly to changes like expanding to more channels, or the ability to accommodate a headless commerce architecture and more. Also, most of the services your Post offers – traditional postal services but also government and financial services – can be offered digitally, even allowing your customer to begin a postal transaction online at home and simply drop off a parcel at a physical location (like a PUDO site, smart locker or self-service kiosk). So, whether your Post experiences the effects of a pandemic, natural disaster, or massive renovation, you can still offer services and generate revenue.
Lastly, the foundation put in place here allows your Post to serve a portion of the 2 billion individuals around the world who fall into the unbanked category. Gaining access to a bank account is much easier for the unbanked if it’s offered through a Post whose network spans the country. And by adding mobile banking capabilities, account usage will grow and there will be opportunities to adopt other banking services.
The pandemic has made us all painfully aware of our heavy reliance on our physical service-based economy. We’ve reviewed three viable business models to boost revenues in today’s environment, and we’ve focused this blog series on diversifying services. The process to diversify into government and financial services is also the same path that leads to offering digital services and effectively moving from solely being a physical aggregator of services and transforming your Post into an aggregator of digital services. This opens several opportunities for Posts, in effect, creating boundaryless opportunities.