Neopost's complete solutions, combining hardware, software and associated services, help businesses of all sizes, enabling efficient and seamless mail processing as well as expenses control. They also ensure accurate delivery and personalization of mail content.
“We will continue rolling out our various solutions across the geographies, in line with postal compliance, with a specific focus in the US.”
3 questions to Jeff Crouse, Chief Solution Officer Mail Related Solutions
With volumes declining globally, what is your view on the traditional mail market?
Jeff Crouse: Physical mail remains a large market, with the United States representing approximately 50% of the global market. Many transactional documents are printed in regulatory markets such as legal, financial or health industries. And although we have seen a structural decline in the mail business for the past decade, this trend has not been the same in all countries. While the Danish market, for instance, at the behest of significant governmental initiatives, has declined by 13% per year on average over the past decade, the US market has demonstrated more resilience and remains a key playground for Neopost with potential for market share increase. In 2018, USPS delivered 141 billion letters in the United States. 17 billion items came from more than 1.5 million meters and PC postage customers, and we should note that the scale and complexity of the US market makes digitalization even more complicated. Overall, over the past ten years, the average decline of the US traditional mail was less than 4% per year, slower than the global trend.
So, even if we have seen a structural decline in the mail business for the past decade, we believe there still is a big potential for business in some major markets, such as the United States. Furthermore, our wide range of hardware and software equipment as well as associated services allow us to assist our customers in the fulfillment of their needs while adapting to fast-changing markets. Whether their activity demands lower, higher volumes, or digitalized mail, we have the products to help them navigate the change.
What is Neopost's value proposition for its customers?
JC: In short, we simplify mail. For companies with lower volumes in mail, this means taking fewer trips to the post office, not having to manage stamps, generating parcel labels easily, and so forth. For companies with more complex mail processes, simplicity comes in the form of automation of mail preparation and compliance with diverse postal rules, taking the risk out of mail processing.
We help mailrooms to do business with local postal services, making it simpler and more cost-effective. Our solutions fold and smartly insert documents into envelopes. They also put correct addresses, weigh the documentation or the parcels, and ensure the right postage value is printed on the shipping label. And as business activities evolve towards handling ever more parcels on a regular basis, driven by market and consumer behavior changes, we offer advanced software applications alongside our franking machines, to facilitate package shipments for the mailroom, including postage discounts in some countries. Our mail related solutions demonstrate real benefits in a context of strong growth in e-commerce.
Our complete hardware and software solutions help businesses of all sizes, enabling efficient and seamless mail processing and giving them control on their expenses. It also mitigates risk thanks to reporting and tracking of items through all mailroom processes, providing an information that is becoming increasingly vital for businesses. Lastly, relying on accurate delivery and personalization of mail content, businesses can reinforce their customers' engagement, which helps generate additional revenue.
What is your strategy going forward?
JC: We have strong assets we can build on.
We can leverage the high barriers to entry of our industry, our wide range of smart solutions and our sustainable business model, 70% of our annual sales being recurring revenue from leasing, services and supplies. Also, 80% of our existing customer base are SMEs, and our annual satisfaction survey confirmed that more than 97% of them are happy with our products and services. To pursue a new strategy of growth, we will continue to support our customers by leveraging our entire product portfolio, identifying cross-selling opportunities where there is purpose and value.
We will continue supporting our large customer base by expanding our offer and upgrading our mailing system product line by bringing in additional features and continuous technology updates. We will continue rolling out our various solutions across the geographies in line with postal compliance and integrating new software solutions, particularly for shipping. As regards to document systems, we will continue to enhance our product range in each of the segments we serve, as well as our software solutions. Lastly, we will adopt the same policy for our production mail solutions: additional features, digital integration and integrity functionalities, notably via cloud-based software.
More than ever, the main drivers of our mail-related solutions strategy are: customer experience improvement, compliance with regulations and cost optimization, and identifying cross-selling opportunities where there is purpose and value.
Use case: Soluc'ea
Toulouse-based Soluc'ea specializes in very large routing activities. They are long-standing Neopost customers for franking machines, and as their activity grew, they quickly found themselves limited both in production capacity and speed of execution. As their customers also demanded more security and quality, Soluc'ea chose the OMS-500 solution to track both the integrity and the completion of their mailings. They have also adopted Neopost's electronic registered letter solution, Neotouch.