NZ Post’s National Sorting Centre in East Tāmaki, Auckland (Photo: Joe Hockley for The Spinoff)
NZ Post’s National Sorting Centre in East Tāmaki, Auckland (Photo: Joe Hockley for The Spinoff)

PartnersJune 14, 2021

More, faster: How NZ Post is learning, growing and evolving

NZ Post’s National Sorting Centre in East Tāmaki, Auckland (Photo: Joe Hockley for The Spinoff)
NZ Post’s National Sorting Centre in East Tāmaki, Auckland (Photo: Joe Hockley for The Spinoff)

After a year like no other, NZ Post is preparing to move its brand firmly into the future. Russell Brown met a few of the organisation’s key decision makers to find out how and why.

This content was created in paid partnership with NZ Post.

It might seem like stating the obvious to say that 2020 wasn’t a business-as-usual year for NZ Post. But as the year unfolded in real time, nothing felt predictable. Long-term trends – declining letter volumes, increasing parcel business, a public embrace of e-commerce – became abrupt, acute shifts as Covid alert levels came and went. The job was simply to respond.

“The challenge around it was the speed of the change in volume,” recalls CEO David Walsh. “Normally, if we’re preparing for a Christmas peak, we’ve got many months of preparation to be able to make sure we’re ready to accommodate that load – and if we need more property or more delivery drivers or to think differently about processing, we have time to do that.

“With that Covid change, there was pent-up demand from New Zealanders wanting to buy those goods – and all of a sudden they could. We saw that hit our network, and we had to cope with it.”

New Zealanders spent $5.8 billion on online retail last year, while online shopping peaked at a 105% increase during alert level three. By the end of the year – and after a Christmas bump that actually exceeded the level three spike – NZ Post had delivered 85 million parcels across their NZ Post, Rural Post, CourierPost and Pace services. 

The experience, says Walsh, “really sharpened a few areas of focus. Particularly in the knowledge that growth is real and continuing. It’s made us need to be more nimble, more responsive to change.”

For NZ Post, 2020 had served as both a stress-test and a vindication of a change process that began back in 2018. That process has been painful at times – an asset write-down associated with declining letter volumes obliged the company to declare a $121 million loss in 2019. 

David Walsh, CEO of NZ Post (Photo: Joe Hockley for The Spinoff)

The company’s chief operating officer, Brendon Main, took up his post in the midst of it all last year. It was, he acknowledges, “an interesting time to come in. We were focused on how we were getting to where we needed to be and the changes we needed to make. So yeah, it wasn’t your usual induction into a role. But it was good to get an understanding of the business at a grass-roots level. Last year stretched us and pushed us to the point where we had to find new and innovative ways of delivering to New Zealanders. It was a little bit tactical, but quite fun at the same time.”

Prominent among those new ways was a greater integration of Rural Post, NZ Post, CourierPost and Pace to meet demand. Many courier parcels, for example, were processed through mail sorting centres. The business began to look more like an integrated network – and thus has landed squarely in the centre of a long-planned rebrand that brings the all of its services under one banner.

That the public often didn’t understand that the Courier service was part of NZ Post was a key issue in the rebranding exercise, acknowledges Sarah Sandoval, general manager of consumer marketing and brand.

“NZ Post is a really strong, powerful brand,” she says. “It’s been around for over 180 years and it has a lot of great qualities. It does need clarification though. There’s confusion about what we do and who we are – and that needed to be cleared up. But it’s not broken. I’ve worked on brands before that really need fixing – ours just needs adjusting to link it more to what we do and the services we offer.

“There was a huge amount of confusion in the marketplace. Confusion between the brands and confusion even around ownership – what belongs to NZ Post versus what belongs to our competitors. It’s important to us that we project a brand that represents the service that we deliver and that is distinct from our competition. That’s absolutely critical for us to be successful. In the marketing team we talk about the sea of sameness – if you’re not red, you’re yellow, or you’re red and yellow – and so it’s really hard for our customers to be able to distinguish who’s who. And that has had a real impact on us.”

But the work began a long way from colour palettes. First port of call was NZ Post’s own workers. Sandoval and her team embarked on what they called “mini missions” in the field with Post’s people – the couriers and posties in the last mile of the delivery network – to get a handle on how things actually worked. In turn, the new branding works as much as an affirmation for Post’s people as it does a pitch to the public.

“We have about 800 retail agency partners and different models – our contract drivers and our employee posties,” says Walsh. “So that’s a big, very diverse audience that we’ve got to make sure is aware of what we’re doing and why. Culturally, that’s really important.

“The term we’re using is ‘Letting the outside world know what’s happening on the inside of this business.’ We’ve just had a series of people-leader events where there was real enthusiasm for what’s going on and positivity about the change being seen – people within the business are starting to see the momentum shift.”

Our people are out there representing both themselves and our business, in every corner of New Zealand, every day. They’re known in their own communities” adds Main. “We get them into our sites every day, actually building the team culture and environment that we want, engaging with our teams, talking about our values and what we’re expecting while they’re out there. Talking about the role we play for New Zealand is pretty critical to that.”

Brendon Main, COO of NZ Post (Photo: Joe Hockley for The Spinoff)

The designation of NZ Post staff as essential service workers during the lockdowns helped bring home that role, he says: “While it was hard for our teams being out while everyone else was home, and they had things to worry about as part of that, they took a huge degree of pride in being classed as essential workers.”

There was another “national situation” last year, of course – a general election. We might be sending and receiving fewer letters each year, but the post still really matters when it’s time to vote.

“We did the election last year in such extraordinary circumstances, when dates were changing, the process was changing because of the opportunity for postal votes,” says Walsh. “After what people were hearing from the US, the confidence and trust in postal voting was tested.” 

Despite that pressure, Walsh’s assessment of how NZ Post managed the early voting challenge is succinct. “We smashed it. We delivered that election. We’ve talked about the parcel side of things, but mail still has an important communication role.”

But although NZ Post has these national service roles, it is also a business. Another aim of the rebrand is to heighten awareness around the work NZ Post undertakes with some of its major partners. Research has shown that most end consumers don’t realise that Post is the delivery business behind well-known names like My Food Bag, HelloFresh and Mighty Ape.

“My Food Bag’s a classic one,” says Sandoval. “People often say, why don’t you deliver in time slots like My Food Bag? Well, we actually do the delivery for My Food Bag. We did a recent video with Mighty Ape to demonstrate our delivery partnership with them – and we got lots of comments on social media talking about great their delivery service was, and how NZ Post wasn’t as good.”

Mighty Ape already advertises NZ Post as its delivery partner, and Walsh would like to see other major partners follow suit. “Success for me would be Mighty Ape, Hallensteins, The Warehouse all proudly saying ‘New Zealand Post is our delivery partner’ – and those that don’t have us delivering for them starting to wish that they did.”

Walsh also sees another element of NZ Post’s culture – its sustainability practice – as a developing commercial advantage. Person-to-person sending became carbon-neutral at the beginning of April and the company is on track to use 100% reusable, recyclable, or compostable packaging by 2025. By that time, it expects a quarter of its courier fleet to be electric – and all of its corporate vehicles. The goal is to have a fully carbon-neutral operation by 2030. That, he believes, represents a clear and valuable offering to partner businesses looking to fulfil their own environmental objectives.

“If you’re going to be proud as an organisation about your EV goals, then using us as your delivery partner can help you achieve that.”

Sarah Sandoval, NZ Post general manager of consumer marketing and brand (photo: Joe Hockley for The Spinoff)

It should also help foster a particular positive reaction that came through in brand research. Sandoval says that when research groups heard about the company’s change strategy, “it was almost like they were rooting for us. That NZ Post is a brand that they want to stick around, they want to see change for the future – and that they thought they might have been losing. There was this sense of relief that they knew we were here to stay. That’s unusual. Usually you’re trying to convince customers and they’re a little sceptical of you, but NZ Post doesn’t have that.

“I’ve worked in companies where you do a rebrand and you run around trying to find evidence to support it. I actually think this is the flip of that – where our customer experience and our service is actually great and it’s the visual appearance that’s standing in the way of people being able to see that. That’s quite unusual for a marketing challenge.”

Last year was a complicated one financially for NZ Post. In the company’s last six-monthly results, parcel revenue was up $42 million – but revenue from delivering letters, which crashed during the level 4 lockdown, was down $39 million. Creating capacity for the boom in parcel delivery also cost money. Coming out with a $27 million profit was a testament to the old company’s ability to meet new challenges.

The half-yearly financial results also come with service metrics for the period. That’s deliberate, says Walsh: “We want to make sure that people are aware that our service is as important to us as it is to them.”

Beyond that, further investment for growth is strategically central. Much of that effort is going into the development of a national “processing backbone”. The current national mail sorting centre in East Tamaki will become a regional one, with two big new national-level sites in Auckland and Christchurch planned, along with new delivery hubs in Wellington and around Auckland.

“The current 85 million parcels will become 170 million parcels in the next 8-10 years,” says Walsh. “That’s significant. It means we have to keep investing for that growth. But there’s no point in having good processing machines if you can’t also get good quality information and delivery data.” 

And beyond the technology, beyond the infrastructure and beyond the brand metrics, there’s one very important constant which motivates NZ Post’s decision-making – and that it’s one which isn’t likely to change anytime soon.

“We’re not a network of automated facilities and vans and trucks,” says Main. “We’re a network of people. We’re out there and our people are doing what they do.”

Walsh agrees. “Of course, to make it work, you need people. We’ve got to make sure our people are happy, healthy, safe and well looked after – and that they’re coping with the growth too. That’s my number one priority. NZ Post doesn’t have a future without its people.”

Keep going!