Although e-commerce continues to grow, at the end of 2016 it still accounted for only 8.7% of total retail sales globally, with total B2C e-commerce accounting for sales of US$1.9tn.
The rationale for the INTERCONNECT is based on cross-border e-commerce and here volumes are forecast to grow at an annual average rate of 25%, up from US$300bn in 2015 to US$900bn by 2020.
It is in the delivery of cross-border e-commerce items that posts can benefit the most as they have a competitive advantage in final mile delivery by delivering to every address.
According to the IPC cross-border e-commerce shopper survey 2016, 72% of consumers purchasing goods cross-border have their items delivered by the post, and 76% of consumers prefer their cross-border goods are delivered to their home. The survey also found that 81% of cross-border purchases weighed less than 2kg and so could be delivered within the postal letters network.
INTERCONNECT covers cross-border packets up to 2kg as well as for parcels up to 30kg. INTERCONNECT also provides end-to-end reliability for consumers and retailers, as the participating postal operators have committed to standards for both the outbound and inbound delivery operations. In postal language this means a defined Leg 1, Leg 2 and Leg 3 standard will provide a reliable end-to-end delivery service by interconnecting the networks of postal operators through one single IT platform managed by IPC.
The IPC cross-border e-commerce shopper survey also showed that consumers rate the level of importance of all international tracking events very highly with ‘very/rather important’ varying between 72% and 86%. Delivering visibility to both the consumer and the e-retailer the foundation of INTERCONNECT.
Data is the key to the success of e-commerce – none more so than tracking events as items pass through the cross-border postal delivery network. Using INTERCONNECT, IPC collects and manages tracking events data through barcode, RFID, and/or Mail Registration Devices in airports, from sending to delivery, including for returned goods. It allows posts to work together and to manage their outbound, conveyance and inbound delivery performance to set standards in order to be able to and to offer e-retailers and their customers a fully tracked and reliable end-to-end delivery service conforming to the three service levels of INTERCONNECT: Premium, Standard and Economy. The resulting service provides a level of visibility for a cross-border purchase which is the same as for a domestic purchase.
Therefore given the incredible growth forecasts for the cross-border e-commerce market, it is in the mutual interests of postal operators to work together to create a cross-border end-to-end postal delivery network with IPC and to join the INTERCONNECT community.