Retail & Australia Post

1. 1
Retail & Australia Post
Point of View
Prepared By: Vishal, April 9, 2015

2. 2
Match
Mismatch
Mismatch
Match
Source: HBR What is the Right Supply Chain For You
Functional
Products
Innovative
Products
Responsive
SupplyChain
Efficient
SupplyChain
Functional Innovative
Primary
Purpose
Supply Predictable Demand
efficiently at the lowest
possible cost
Response quickly to unpredictable
demand in order to minimise
stockouts and obsolete inventory
Inventory
Strategy
Generate high turns and
minimise inventory through
out the chain
Deploy significant buffer stocks of
parts or finished goods
Lead Time
Shorten Lead time as long as it
doesn’t increase the cost
Invest aggressively in ways to
reduce lead time
Choosing
Suppliers
Primarily for Cost and Quality
Primarily for Speed, Flexibility and
Quality
Product
Design
Maximize performance &
minimise cost
Use Modular design in order to
postpone product differentiation for
as long as possible
Retail
Industry Evolution

3. 3
Retail
Industry Trends
Source: Gartner
• Through 2017, digital commerce will account for less than 20% of overall revenue for multichannel retailers.
• M-commerce continues to account for a small percentage of retail revenue, but it is fast becoming the customer's main
gateway into the retail shopping experience.
• E-commerce remains the largest digital channel in terms of revenue, but it's growth rate continues to slow.
• Customers are creating new business models and value in retail through having easy access to the converged power of the
digital technologies supporting cloud, mobile, social and big data.
• Customer collaboration for innovation is a key competence that is required to operate a successful retail digital business.
• Even as the transition to digital business models occurs, survival will depend on how well retailers execute on the
multichannel customer basics, particularly in-store.
• Disintermediation will heighten levels of competition for customer spend as the customer's perception of a retailer's pricing
strategy will be increasingly influenced by individual items and transactions.
• The unified price, promotion and markdown optimization technology market will codify around three to five leaders that can
execute optimization of personalized, multichannel pricing strategies.
• A future pricing process supporting digital business will depend on a combination of strategy, knowledge and speed to win
the sale.
• Augmented reality in-store affords retailers an opportunity to provide a combination of contextual information, rewards and
personalized offers to engage customers..

4. 4
Retail
Technology Trends
Source: Gartner
• Underpinning Digitalisation With the Internet of Things and the
Nexus of Forces
• Prioritising the Role of Multichannel Master Data and Multichannel
Master Content Management in Digitalisation
• Deploying Distributed Order Management to Execute Retailer
Multichannel Fulfilment Strategies
• Evaluating Smart Machines to Improve Productivity
• Investing in Data and Content Management Solutions to Improve
the Mobile Experience
• Focusing on In-Store Technology to Execute the Basics in the Digital
Store
• Prioritising Data Security to Protect the Brand
• Adopting Desktop 3D Printing Services Is Gaining in Popularity
Cost Revenue
Fulfillment
Demand
Side
Generation
IT
Transformation
(Traditional IT)
Digital
Transformation
Economics

5. 5 Source: BCG, HBR, UCS
Retail
Business Architecture
Partnering
with Vendor
Buying
Marketing
& Selling
Managing
Inventory
Distributing
Inventory
Operating
Stores
Planning
Supply Chain Management Merchandise Management
Stores
Management
Execution
Supplier
Mgmt.
Warehouse
Mgmt.
Sourcing Transport.
Distribution
Reverse
Logistics
Replenish.
Visibility &
Tracking
Inventory Logistics
Pur. Order
Mgmt.
Procur.
Foreign
Trade
Advanced
Plan Mgmt.
CPFR.
Demand
Mgmt.
Corporate Management Customer Management
Planning Operations
Price&Camp
.Mgmt
Val Chain
Collab.
Promotions
Trade
Mgmt..
Assortment
Sales
Audit
Allocations.
Invoice
Matching
Category
Mgmt.
Merchand.
System
Item
Planning
Space
Optimis.
Demand
Mgmt.
Performance
Mgmt.
Finance
Real Estate
Mgmt.
HR
Asset Mgmt. BI
MDM IT
Sales Mgmt.
Analytical
CRM
Mktg Mgmt. Call Centre
Customer
Support
Customer
Loy.& Pref.
Churn
Analysis
GDS
Standards
RFID
POS &
Mobile POS
Workforce
Mgmt.
Advanced
Store Tech.
Gift Reg.
Back Off
Integ.
Central office
Labels &
Rags.
Store Invent.
Mgmt.
Returns
Mgmt & Loss
Prevention
Channels Management
Physical
Online Store
Mail &
Catalog
IVR
Mobile

6. 6
Retail
Shared Value Measurement in Business Strategy
Redefining
Productivity in
the Value chain
Reducing Cluster
Development
(How changing social
conditions outside
unleashes new growth)
Reconceiving
product and
markets
Level of
Shared Value
Business
Outcome
Social
Outcome
• Shared Value measurement is to unlock value driven by linking social and business
outcomes. This needs to be part of the business strategy measure.
• IBM from Computer and Technology to Smarter Planet, Pearson from Textbook Publishing
to Improving Educational Outcomes.
• Increased Revenue
• Increased Market Share
• Increased Market Growth
• Improved Profitability
• Improved Patient Care
• Reduced Carbon footprint
• Improved Nutrition
• Improved Education
• Improved Productivity
• Reduce Logistical and Operating costs
• Secured Supply
• Improved Quality
• Reduced Energy use
• Reduce Water Use
• Improved Raw Materials
• Improved Job Skills
• Improved Employee Income
• Reduced Cost
• Reduce Logistical and Operating costs
• Improved Distribution Infrastructure
• Improved Workforce Assets
• Improved Profitability
• Improved Education
• Increased Job Creation
• Improved Health
• Improved Incomes
Source: HBR

7. 7
Postal Services
Industry Trends - AU
Reserved
mail
services
38%
Non regulated mail
services
10%
Retail
13%
Bulk mail
13%
Parcel
Delivery
26%
Product & Services Segmentation - 2014
Source: IBIS World Industry Report –Postal Services in Australia, Dec, 2014
• Postal industry is going trough a state of transformation, where traditional
Mobile Services and Internet Based Services are becoming the growth segments
as convergence of service and digitisation of assets is underway.
• Industry in general is in Decline stage of it lifecycle. Technology change and
impact across all business lines is high and currently impacting its top and
bottom line.
Consumers
2% Government
and Service
Providers
16%
B2C
36%
B2B
46%
Market Segmentation - 2014
Australia
Post,
97.50%
Others,
2.50%
Major Players Market Share - 2014

8. 8
Postal Services
Transformation – Across Globe
Image Source - Australian and International Postal Services Overview by BCG - 2014

9. 9
Postal Services
Lever
Image Source - Australian and International Postal Services Overview by BCG - 2014

10. 10
Australia Post
Context
• Australia post opened its 1st outlet in 1809 in Sydney
• Australia - Prosperous Place in Beginning of 20th Century
• Industrialisation – Steam Engine(shipping) and Telegraph
• Applying the methods of the tram and steam driven economy to
the motor car economy failed
• Digital Disruption - Ubiquity of Internet and Internet of Things is
driving Digital disruption across all industries including Postal
and Telecom Services
Source: NBN - Freeways of The Future
Circular Quay in 1809

11. 11
Australia Post
Ops View
Attributes Industry Auspost
Revenue in Billions by
FY 2014 (Size)
6.3 6.2
Profit in Billions
(NPAT)
0.133 0.116
Growth
(CAGR% 2010-2015)
2.4%
Expected Growth
(CAGR% 2015-2020)
0.4 %
Share of Economy (%) 0.19
Source: IBIS World Industry ReportHigh
LowRevenueVolatilityHigh
Hazardous Rollercoaster
Blue ChipStagnant
Low 5 Year Annualised Growth
Auspost
• Australia Post is a Federal Govt. owned monopoly in postal services with an
independent board..
• Postal industry is going through a state of transformation, where traditional
business is on decline and new areas of growth like parcel business is on rise. To
transform in a digital world, a customer-driven, sustainable, high-performing and
financially viable business and ops model was rolled out in 2010. Hence, a large-
scale transformation of industry services with digital communication is underway.

12. 12
Australia Post
Future Ready – 2010 and Beyond
• Australia Post initiated a major transformation journey in 2010 to
redesign it business and operating model
• A customer-driven, sustainable, high-performing and financially
viable Business and operating model was rolled out
• Four BU’s were created
• Postal Services
• Retail Services
• Distribution & Express Service
• e-Services
• In 2012, Australia Post launched a digital mail box (APDM) under
e-Services
• In 2014 APDM was rebranded as My Post Digital Mail Box
(MPDM)
Image Source - Australian and International Postal Services Overview by BCG - 2014
“This year (FY 2014) has marked a turning point for Australia
Post. For the first time since corporatisation we have posted an
overall company loss in the second half of the financial year”
Ahmed Fahour

13. 13
Australia Post
Business Buyers
Ref: Gartner, BCG, IBIS
MD, LOBCFOCOO,CAOCEOCDO ProcurementCMORole
Buyer
Role
Focus
Key
Vendor
Message/
Themes
Impact on
Decision
Decision
Maker
Influencer
Decision
Maker
Influencer
Decision
Maker
Decision
Maker
Influencer
Digital
Strategy
Strategy Business
Cost and
Capacity
Business
Marketing,
Sales
Ops Eff.,
Risk
Focus on IT
& Business
Alignment.
Advisor to
CEO/COO
IT as a force
to enable
strategy,
product,
gain
different.
and ops
efficiency
Functionality
, speed of
implementat
ion, TCO, fit
with existing
landscape
Demonstrate
cost
discipline,
OPEX vs
CAPEX
Revenue vs
Cost,
Functionality
, Ease of use,
speed of
implementat
ion
Focus on big
data,
analytics and
technology
that can
improve
customer
centricity
Vendor, risk,
cost,
contracts
High Medium High Medium High Medium Low

14. 14
Australia Post
Key Segments
Australia
Post
Startrack
Decipha
……
Parcel
Services
Postal
Services
IT
&
Digital
• Australia Post has various Departments which
required different approach.

15. 15
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