Digital's death blows now striking NZ postal services

The dash to digital looks set to have claimed yet another victim.
Written by Darren Greenwood, Contributor

Hot on the heels of a raft of high-street retailers, as I posted last week, the online world could now well end up killing the traditional post office.

This week, NZ Post revealed that it is seeking a fresh agreement with the government over its obligation to deliver mail six days a week to just about everybody.

In future, NZ Post has suggested that it only deliver three days a week. Many NZ Post shops would close and be replaced by self-service kiosks.

NZ Post claims that growing use of email is replacing the need for its more profitable Fastpost offerings, and that the numbers of items it delivers is falling sharply.

Last year, volumes dropped a record 6.9 percent and the state-owned enterprise fears it will soon end up losing money.

It's not just the growth of email that is hitting numbers; increasingly, customers also pay their bills online instead of doing so at the post office, and bank statements are now typically emailed or available online, too.

I guess the only good thing for postal services to come from the dash to digital must be the growing number of parcel deliveries to all those online shoppers shunning the stores. But parcel delivery is a competitive market with several providers, not a near monopoly like letter delivery, so the profits may not be too great there, if they exist at all.

The only thing NZ Post can do is look at its services. It has recently launched various bill-payment services. NZ Post also operates the state-owned Kiwibank, which is proving highly profitable.

It is also moving into the digital age itself, offering a variety of digitally related mail and marketing services, or is planning to.

Of course, this is a challenge faced by other postal services, too, with the US Postal Service facing similar troubles.

In the past, technology has been a saviour for postal services, with technological innovation, such as automation and mechanisation, helping it cope economically and efficiently with expanding volumes.

Technology may well provide a future, too, with suggestions of "email-management services."

It certainly looks like NZ Post, like other similar postal services, will have to reinvent itself with new e-services if it is to remain a major part of everyday life.

If it is any comfort, halving delivery days to three days a week looks to have been accepted by a pragmatic public who understand the harsh realities facing many traditional organisations in today's digital world.

Editorial standards