An Post scores highly each year in the RepTrak survey of trusted businesses. But being trusted doesn’t automatically lead to commercial success, as managing director Debbie Byrne discovered when she moved from the world of big brands such as L’Oreal and Eir to the commercial State body in 2018.
While An Post’s subsequent transformation journey included changes to the look and feel of the brand, the real work was structural and ran deep.
“Back in 2017, An Post was in the headlines for all the wrong reasons. The underlying business and its profitability were very much struggling. When I came in with a new CEO and mostly new management team, we did a lot of research, asking consumers what they thought about the brand. The thing that kept coming back was that everybody loved An Post but when you asked them when was the last time they were in a post office, or posted a piece of mail, they kind of just looked at us.
“The big challenge was how to move from being liked to being relevant. It also was about how to find new sources of income, because mail volumes were so impacted by email. So it started with business transformation and a new strategy, and out of that came the refresh and modernisation of the brand,” she explains.
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It worked. Just six years into its new business strategy, last year the business hit a turnover of over €1 billion (+10.6 per cent year-on-year) with profitability of €51.5 million, (+34 per cent), a remarkable feat.
“The transformation was focused on moving from a world of letters, which is still a very important part of our business, into a world of parcels and logistics. On the retail side, it was about how to move from a business dealing in cash, which again is still very important to us in terms of social welfare and community banking, into a world of financial services and new digital services,” says Byrne.
“It was by having a laser sharp focus on new revenue streams that we broke that €1 billion mark for the first time, including the launch of two new sub brands, An Post Money and An Post Commerce, with a whole product suite behind them, all based on research.”
Brand stretch
Already having history in State Savings and Prize Bonds enabled the An Post brand to stretch. “We had the heritage in that business, so we almost had permission to be in financial services already,” she explains.
Having an advertising campaign fronted by Angela Scanlon, a fun and relatable TV presenter, helped too. “She was perfect in terms of being a spokesperson for the An Post Money brand which includes current accounts, kids MoneyMate account, credit cards, consumer loans and travel money,” Byrne says.
Another win for An Post was how successfully it leveraged Covid lockdowns to reintroduce people to just how good it is to receive a card from a loved one, with a free postcard scheme to every household and free postage to care homes.
Byrne puts a lot of store too in what she calls An Post’s new stamps programme, which has included a modern take on culture, including the new 25 years of Westlife stamps, as well as stamps linked to big sporting events such as the Rugby World Cup, cultural icons such as Father Ted, and more topical issues, such as children going to the Gaeltacht over the summer and, more recently, a stamp celebrating youth clubs.
All are about making An Post more relevant and bringing in new consumers, she says.
That includes innovations such as digital stamps, available from the An Post app. Users can buy a stamp instantly, from home or anywhere, which comes in the form of a 16-digit code. Additional value comes with a notification afterwards to say your post has been delivered.
It’s just part of its efforts to boost convenience and improve the customer experience overall, she explains.
An Post has seen enormous innovation on the parcels side of the business too, demand for which soared during Covid and which it has successfully held on to, with its parcel business up circa 25 per cent this year, on the back of a succession of strong years.
“A lot of people began to shop online during Covid who maybe never did before, and that consumer behaviour has stuck. People are buying more and more online, which doesn’t necessarily augur well for the high street but is a big part of our business,” she says.
Today Amazon is one of its biggest customers, as An Post is its carrier partner outside of Dublin. That too has helped turn the State mail company into a bona fide logistics business, another part of its transformation journey.
Return on investment
That has required enormous capital expenditure as the company beefed up its processes and fleet, and moved call centre activities in house.
Getting the balance right between cost and price has been a critical part of the transformation.
“Price is very important to us, given that, as mail volumes decline, we still have a relatively fixed cost network. A post man or woman walking down your street, whether they have one letter to deliver in their bag or 100, still costs us the same. So, as the volume declines, we’ve been increasing prices,” she says.
At the same time, it could only do that by also working to be as lean, efficient, and effective as possible.
“We are always looking at how we can become more efficient and manage our costs better. So, going back to the price piece, we wouldn’t have been able to win new customers such as Nike, or the big clothing e-tailers, or even put up the price of a stamp, if we didn’t have an absolutely laser focus on quality of service too,” she explains.
“That’s a metric we really closely monitor. If you haven’t got the quality to match your price, very quickly the likes of Nike and Amazon will be saying we haven’t met their service levels. Consumers too would stop buying stamps if they felt the price to value ratio was just not there. People will pay a little more if they perceive that there is value for money there and quality of service. Again, that’s a laser focus for us.”
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