In mid-September, Neopost, a leader in business solutions for meaningful customer connections through digital and physical channels, announced that it was changing its corporate business name to Quadient. The company, which was founded near Paris in 1924, stated that its goal under this new brand was to build a strong connection with customers via “an experience that is personalized, readily-available, consistent, meaningful, convenient, and secure — regardless of the channel.” This change echoes the overall industry trend of customer communication channels becoming more multi-faceted and varied, with an emphasis on omnichannel connection.
This is not the first major announcement made by the company in 2019. In January, Neopost unveiled its “Back to Growth” strategy during Capital Markets Day in Paris. The company stated that it would be focusing on growing four core lines of business: mail-related solutions (MRS), business process automation, customer experience management (CXM), and parcel locker solutions. The company will continue to do the same under the Quadient name, and all four lines of business have been brought under the same channel leadership in North America and Europe in an attempt to access the untapped synergies of each respective line.
Mail solutions have always been a strong generator of revenue for Neopost (70% of the company’s 2018 revenue resulted from this segment). However, the continual decrease in worldwide mail volume has had a negative impact on revenues for this segment; over the past four years, revenue from this line has been declining at a pace of four to six percent. Despite this decline, the MRS line of business remains a strong generator of recurring cash flows. In an interview with Mailing Systems Technology, Jeff Crouse, Chief Solutions Officer, Mail-Related Solutions, shared that Quadient will continue a number of Neopost’s strategies regarding this segment, with the ultimate focus being on growing this business even in the face of declining mail volumes.
“The core strategy around the mail-related solutions line of business is a reinvestment into MRS products, services, and marketing capabilities,” he noted. “We are bringing to market new solutions even now, and we believe that we have a significant opportunity to grow.”
Yet despite this emphasis on growth, during Capital Markets Day, the company projected that by 2022, less than 50% of sales will result from the MRS line. However, Crouse shared that this projection isn’t necessarily a negative for the MRS segment, but rather an indicator of the explosive growth that the other three lines of business expect to see in the next few years.
“We’re not going to achieve that ratio between MRS and other businesses by MRS shrinking at a significant pace,” Crouse opined. “Mail, and the growth of mail at Quadient, is something that we are driving and intend to achieve ourselves. What [that projection] really indicates is that the growth rates of the other three lines of businesses, which are obviously significantly higher than [that of] MRS, are going to continue to outgrow what we are doing in the mail. At the end of the day, you have a ratio where the MRS revenues [will be] less than 50% of the company’s total revenue. It represents our diversification.”
Crouse noted that this ties into the rebranding’s attempt to communicate both internally and externally that the company’s brand and mission spans different means of communications between customers. “We strive to, as the tagline says, focus on the types of connection between businesses and their customers that really matter. MRS revenues being less than 50% of that simply follows the evolution of the way that communication and connection are established today. We’re trying to leverage our history and our technology around MRS to evolve with customers and with the market.”
Nowhere is this evolution of the market and customer expectations perhaps more clear than with respect to worldwide declining mail volumes being counteracted by rapidly increasing parcel volumes across the globe. The United States Postal Service reports that while First-Class Mail volumes are down from 68.7 billion pieces in 2012 to 56.7 billion pieces in 2018, package volume delivered by the USPS went up from 3.5 billion pieces to 6.2 billion pieces during that same time period, largely due to the growth in e-commerce. Pitney Bowes’ annual Parcel Shipping Index found that parcel volume in the US alone was up to 13 billion parcels in 2018, and worldwide parcel volume shipped is expected to reach 200 billion by 2025. Along with this growth comes the desire of customers to have more say and flexibility in how and when they receive their shipments, which means that alternative delivery solutions like parcel lockers are growing in popularity.
In January, Neopost acquired Parcel Pending, a leading provider of innovative package management solutions, in an attempt to increase their share of the parcel locker market. “We’re very excited with the opportunity in this market, both in North America and in the regions we operate in around the world,” Crouse explained. “The acquisition [of Parcel Pending] is the best illustration of the exciting developments we see and where we’re investing in the overall market. We see great growth in not only the residential market but also colleges and universities.”
Overall, Crouse believes that this focus on growth and innovation is what best characterizes the company’s strategy and rebranding. “The Quadient rebranding allows our customers to change their expectations of what they think about us as a company. In the past, they would have thought of us in terms of specific products we do really well, whether that’s a postage meter or a parcel locker solution that we built for a university,” he shared. "Now, we serve them not as four separate products but as one company that is going to be able to integrate those solutions for customers. I think of this as a real opportunity, in the mailing world, to represent a brand-new face for our customers and set brand-new expectations of what they can get from Quadient.”
Amanda Armendariz is Editor, Mailing Systems Technology media, where she provides thought leadership on all segments of the mail industry. Follow her on Twitter @MailSystemsTech or email amanda.c@rbpub.com.
