Understand how the traditional retail and delivery supply chain is undergoing huge transformation and how this affects post and parcel organizations.

1. RETAILSUPPLYCHAIN
TRANSFORMATION
Accenture Post and Parcel
Industry Research 2019
THE CHANGING LAST MILE

2. Copyright © 2018 Accenture. All rights reserved. 2
Price
RETAILERSARE
WEAPONIZINGLASTMILE
Free Fast Free + Fast Control
WE ARE HERE

3. Copyright © 2018 Accenture. All rights reserved. 3
CONSUMERSDEMANDMORE SPEED
Of consumers are willing to pay for
same day or faster delivery
88%
Of online shoppers say knowing the
estimate or guaranteed delivery date
is important63%
Of consumers would consider
receiving their order via drones to
speed up delivery40%
Of consumers rate the speed of
delivery as the top feature they are
looking for in their delivery service
provider
28%
Of millennials consider an online
retailers’ ability to deliver on the
same day before purchasing via the
online store
30%
Of retailers offered same day
delivery in 201851%
Thetopreasonthatcustomersusesamedaydeliveryisthe
needforimmediatereceiptoftheirorders.
Source: https://www.gopeople.com.au/blog/same-day-delivery-trends-and-statistics-to-guide-your-business/

4. Copyright © 2018 Accenture. All rights reserved.
WHYLASTMILE MATTERS
Thebullseyeisbeingthe
firstretailertooffersame-
daydeliverynationwide.
“
Brian Cornell,
CEO of Target
Of customers increasingly expect
online providers to offer a one-hour
delivery service in metropolitan areas54%
Of customers consider “fast delivery”
to mean same-day delivery
96%
most important delivery consideration for
online shoppers is fast delivery, and is
preferred to a free delivery option
2nd
Sources: Accenture, Adaptive Retail Survey, 2017; MetaPack, 2017 State of eCommerce Delivery, Accenture analysis
4
Of millennials attach special importance
to ultra-fast delivery options
66%

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MOBILEIS FUELLINGTHECHANGE
Discovery Purchase
Of digital advertising is
mobile advertising
70.1%
Growth in mobile
advertising in 2017
30%
Of retailers focused on
enabling social selling
35%
Of ecommerce is mobile
commerce (mCommerce)
40%
Growth in mCommerce
in 2017
45%
Of ecommerce purchases are
apps generating 4x conversion
rate to conventional mobile
44%
App purchase data: http://www.businessinsider.com/mobile-apps-most-popular-e-commerce-channel-q4-2017-2018-2
Mobile advertising: https://forecasts-na1.emarketer.com/584b26021403070290f93a57/5851918a0626310a2c186a4d
Social selling: http://totalaccess.emarketer.com/article.aspx?r=1016811
Mobile ad growth: https://content-na1.emarketer.com/us-ad-spending
Mcommerce growth: http://totalaccess.emarketer.com/reports/viewer.aspx?r=2002139
Mcommerce marketshare: https://www.statista.com/statistics/249863/us-mobile-retail-commerce-
sales-as-percentage-of-e-commerce-sales/

6. Copyright © 2018 Accenture. All rights reserved.
ARTIFICIALINTELLIGENCEIS
SUPERCHARGINGTHECHANGE
Front Office AI—Transforms the Consumer
Recommendations
Predicting Buyer
Behavior
Inventory Placement
Fulfillment
Optimization
Order Management
Targeted Offers
Back Office AI—Transforms the Network
CONSUMERS’
CHANGING
EXPECTATIONS
More
Relevance
Greater
Convenience
Instant
Information
Expanded
Choice
Increased
Control
Default
Personalization
6

7. ECOMMERCEFULFILLMENT
METABOLISMIS
INCREASING
Faster Cycles
Fragmented Inventory &
Shipments
Shorter Distances
From Supply Chain
to Supply Network
1
2
3
4
7Copyright © 2018 Accenture. All rights reserved.

8. INVENTORY IS GETTINGCLOSER
Amazon’s Changing Fulfillment Landscape
1995 2005 2017
1 FACILITY 6 FACILITIES 787 FACILITIES
Including 458 Whole Foods
8Copyright © 2018 Accenture. All rights reserved.
Source: MWPVL.com, amazon.com,

9. Copyright © 2018 Accenture. All rights reserved.
Have consolidated demand planning,
replenishment, allocation and order
management for offline with online
INCREASEDFOCUSON
ONLINE-OFFLINESYNERGY
74%
Say they have strong
synchronization between
inventory and channels
58%
Have good real-time visibility of
inventory with 60% actively
improving that capability
57%
Increase in warehouses focused
on online-offline fulfillment15%
Of warehouses offer ecommerce
fulfillment services (up 20% over
2 years)
Retailers are quickly moving toward an online-offline approach that allows them to use their
offline capabilities as a strategic advantage online.
1/3
Rate integrating ecommerce
and in-store capabilities as
business critical
78%
Sources: Accenture, Adaptive Retail Survey, 2017; MetaPack, 2017 State of eCommerce Delivery, Accenture analysis
9

10. Copyright © 2018 Accenture. All rights reserved. 10
Daily Retail Transactions per Store, 11/17
THEONLINE-OFFLINESYNERGY
ADVANTAGE
12,000
8,000
4,000
Offline Online
DailyTransactionsperStore
0
Carrefour China Yonghui Hema
50%
ONLINE-OFFLINE SYNERGY
BENEFITS OFFLINE…
…AND ONLINE SALES
Increase in offline
transactions
with a robust online
presence
50%
Increase in online sales
in the first 6 weeks after
a new store opens
52%
Sources: Kleiner Perkins Internet Trends Report https://www.kleinerperkins.com/files/INTERNET_TRENDS_REPORT_2018.pdf
The Retail Bulletein https://www.theretailbulletin.com/news/insight_new_physical_stores_increase_retailer_website_traffic_by_52_07-08-17/

11. Copyright © 2018 Accenture. All rights reserved. 11
ADAPTING TO FAST AND FREE DEPENDS ON STARTING POINT
3EMERGINGMODELS FOR E-FULFILLMENT
Source: Company financial statements, Accenture analysis
END-TO-END CONTROL1
2
3
• Critical mass and size
• Own assets: conveyance and warehousing
• Digital-driven (AI, Analytics) operations
PARTNER ON LAST MILE
DELIVERY
PARTNER ON FULFILLMENT
AND LAST MILE
• Frequent consumer purchases and/or
highly impulsive categories
• Network of stores covering population
• Fulfillment from store
• Small, low frequency and/or limited
footprint retailers
• Limited or basic supply chain capabilities
• Limited resources to invest
Marketplaces
Groceries
Hypermarkets
Specialized
Most Other
Retailers
MODEL TYPICAL CRITERIA RETAILERS

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Logistics arms of Amazon and Alibaba are not much larger than the size
of most posts’ parcel businesses
MODEL01:OWN END TO END
-25%
-15%
-5%
5%
15%
25%
35%
45%
1100 10 13020 30 14010040 50 9060 70 80 120
USPS
Amazon Logistics
DPDHL
FedEX
LaPoste
RoyalMail
Amazon
UPS
Yamato
Alibaba
SingPost
Parcel+LogisticsRevenueCAGR
[FY2013toFY2016]
Parcel + Logistics Revenue [FY 2016] Postal organizations Integrators
[Bubble size indicates 2016 revenues]
Source: Company financial statements, Accenture analysis
01 02 03

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Competition is on the rise—Retailers
MODEL02:USEPARTNERS FOR
LAST MILE
TRADITIONAL PLAYERS
Instacart
Same Day: In all its 1,200 cities across 25 states in the USA; Partners:
Walmart
Same Day: Partnered with various new age players to offer same day
delivery in multiple regions. Partners:
Tesco
Same Day: Extended Same Day Click + Collect service to 300 locations
covering over 99% of UK households. It also launched one-hour grocery
delivery in London though a tie up with Quiqup.
NATIONAL
WEST
MIDWEST
SOUTH
NORTHEAST
Postmates
Doordash
Deliv
Google Home
Google Express
Source: BI Intelligence, CBInsights, Press Releases, Post&Parcel , Accenture analysis
01 02 03
Whole Foods
Petco
Costco
PCC Natural
Markets
Smart & Final
Mollie Stone’s
Markets
Sur la table
Gelson’s
Natural Grocers
Stater Bro’s
Markets
BevMo!
99 Ranch Market
Bashas’
Target
Cub Foods
Binny’s
Shop’n Save
Schnucks
H-E-B
Central Market
Spec’s
Total Wine
Publix
Food Lion
Fairway
Key Food Farm
Shoppers
Giant
Pricerite
Farm Fresh

14. Service % Population
Same Day 20%
Next Day 52%
2 Day 92%
3 Day 100%
4 Day 100%
Copyright © 2018 Accenture. All rights reserved. 14
Monarch FX
MODEL03:USE PARTNERSFOR
LOCAL FULFILMENTAND LASTMILE
Darkstore
Largest fulfillment center network
Enabling 1-hour delivery, same-day delivery and
the lowest rates for regular shopping
2018 Network & Coverage
Source: Company websites
01 02 03
Chino
Dallas
Atlanta
Columbus
N-NJ

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EXchain Shipwire
Shipwire is a global fulfillment company with
offices in China, Hong Kong and Europe; offers
same day delivery
With more than 10 years in service, EXchain is
a leading delivery fulfillment company in Hong
Kong; offers same day delivery
Source: https://www.chinaimportal.com/blog/fulfillment-centers-china-hong-kong/
01 02 03
MODEL03:USE PARTNERSFOR
LOCAL FULFILMENTAND LASTMILE

16. Copyright © 2018 Accenture. All rights reserved. 16
TECTONICPLATESARE MOVING
As the supply chain grows in strategic importance our research shows those
networks are fundamentally changing, creating a new delivery reality.
Local
Last Mile
Speed and
Agility
Ecosystem
for Scale
Retailers are focused
on inventory proximity
for cost and speed
Retailers are making
all elements of the
supply chain faster
and more agile
New models with new
partners will continue
evolve to achieve
synthetic scale

17. FOR MORE INFORMATION
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ABOUT ACCENTURE
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BRODY BUHLER
Global Managing Director,
Accenture Post & Parcel Industry
@brodybuhler
robert.b.buhler@accenture.com
Copyright © 2019 Accenture
All rights reserved.
Accenture and its logo
are trademarks of Accenture.
/in/andre-pharand/
ANDRE PHARAND
Global Consulting Managing Director
Accenture Post & Parcel Industry
@andre_pharand
andre.pharand@accenture.com
www.accenture.com/postal