Post Office gets £20m more public money to become a ‘digital retailer’

The Post Office is launching a new digital platform as part of its strategy to modernise the business and behave more like a retailer.

It published a strategy document, ‘Securing the future - Strategy 2020’, as the government unveiled a dedicated £20 million fund for investment in the Post Office’s 3,400 small branches that are usually found in deprived or relatively isolated communities. This is in addition to £640 million that postal affairs minister Jo Swinson has already announced for 2015 to 2018 to maintain the network of over 11,500 Post Office branches.

“We are outlining our strategy to secure the future of the Post Office with ambitious plans for a modern, digital and thriving business in 2020. We are modernising our branch network, increasing the range of financial products we offer and providing new digital platforms. We are going to be wherever our customers are, whether it is close to home, to work or online,” said Paula Vennells, chief executive of the Post Office.

Over 1,400 branches have been modernised since April 2012. In addition to refreshing the branch network, Vennells wanted the business to operate at a more “dynamic” pace, to go from just being a delivery channel to being like a “high street retailer”, like Sainsbury’s, Argos or Tesco.

“If you’re a channel, you look to somebody else, a supplier behind you to deliver [dynamism and energy]. If you’re a retailer, you do it yourself,” Vennells said.

In a bid to respond more dynamically to customers, the Post Office recently tendered for advanced data analytics services to improve its customer targeting.

But subpostmasters face job losses

Another part of the Post Office’s strategy is to provide investment and support for subpostmasters, for whom trading conditions “remain challenging”, to develop their businesses.

However, the communications union, CWU, said that the modernisation strategy disguises potential redundancy for 4,000 postmasters.

“The network transformation programme has been running for two years on a voluntary basis, but take-up by postmasters of the new-style operating Post Office models - mains and locals - has been poor, caused in the main by a one-sided contract and low remuneration rates,” the union said.

“The Post Office will be writing to around 4,000 postmasters telling them their Post Office branch does not fit in with their future plans. They will be put on notice that their Post Office will be shut down and the service transferred into a neighbouring retailer, typically a supermarket.

“If the Post Office is unable to find a neighbouring retailer to take on one of the new models, the existing Post Office branch continues to stay open, but will be left to wither on the vine and it is unlikely to be replaced once the postmaster resigns or retires.”

However, the Post Office said in its strategy document that subpostmasters leaving the network as part of the modernisation programme will receive “increased leavers’ payments”, “provided we are able to relocate the branch to a suitable retailer nearby”.

It was recently announced that the Post Office has launched a mediation scheme - overseen by former Lord Justice of Appeal Sir Anthony Hooper - for sub-postmasters to resolve complaints about its Fujitsu-built IT system.

The Horizon point of sale system has been the source of much controversy over allegedly problematic accounting – resulting in heavily disputed legal battles with sub-postmasters who claim that they have been wrongly accused of fraud. Some sub-postmasters have been sent to jail over the claims.

Copyright © 2013 IDG Communications, Inc.

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