Digital sales boom for Christmas: Australia Post CEO Christine Holgate

The postal service is gearing up for an expected 25 per cent increase in online shopping this December.

The 2020 Christmas period is expected to be the largest ever online shopping event in Australia, with a record $4 billion expected to be spent online as the COVID-19 pandemic has brought in a new era of online shopping, Australia Post chief executive Christine Holgate said on Wednesday.

In a speech to The Australian’s e-commerce summit on Wednesday, Ms Holgate said Australia Post was gearing up for an expected 25 per cent increase in online shopping this Christmas with plans to employ an additional 5,000 staff to deliver parcels and help in post offices and customer call centres.

Its Christmas planning also includes having 3,000 more vehicles on the road than last year, 18 dedicated air freighters, another 47 new delivery sites, 30 more post offices and other options for people to collect parcels.

“We are planning for a Christmas like no other,” she said.

Ms Holgate said the pandemic had seen the advent of an online shopping boom in Australia since March with eight million households shopping online, including a million new households which had shopped online for the first time, and 57 per cent of households reporting plans to shop more online in the future.

She said Australia Post had delivered 300 million parcels across Australia since the pandemic, with its branded parcels up 54 per cent year on year.

“Our growth in parcels from July to September was more than the growth for the entire year just two years ago,” she said.

“We have facilitated an additional $4.2 billion in e-commerce sales during the height of the crisis from March to August, on top of the $25 billion that Australia Post was already facilitating annually for Australia before COVID.”

She said the lock down in Victoria had created a spike in demand for e-commerce in the state with “parcels in Victoria were up 175 per cent through September.”

But she said it had also created significant restrictions for e-commerce with more than half of Australia’s e-commerce in the past originating from the state.

“This growth has been staggering but it put enormous pressure on our customer service and many painful lessons were learned,” she said.

Ms Holgate said e-commerce was “the industrial revolution of our decade.”

But she said it was a revolution which had taken place over weeks and not decades, which would “change the retail landscape of Australia forever.”

“This immense period of change has brought out the entrepreneurial spirit in Australians, with more new businesses being formed and leaders completely adapting their business models,” she said.

She said the big rise in e-commerce since COVID had “kept many businesses afloat that would have otherwise have folded.”

Ms Holgate said Australia Post was initially hit by the COVID-19 pandemic as letter delivery fell while the demand for parcel delivery surged, adding to delivery costs.

At the same time, COVID-19 travel restrictions saw a sharp drop in passenger air travel with passenger planes traditional carrying airfreight.

She said Australia Post also had to change its work practices to take into account the pandemic.

She said these trends, and discussions with post office businesses around the world, had led Australia Post to fear that it would soon be losing money.

“We had approximately $600 million in cash in the bank, which would cover wages for our employees and partners for around six weeks,” she said.

“We modelled scenarios for what our business could look like if the government closed us down or we became significantly restricted.”

“If the worst happened, in just three months, we could go from a modest profit to a significant loss.”

She said operational changes introduced included a move to split shifts, the purchase of thousands of bottles of sanitisers and face masks and the installation of safety screens in almost 4,000 post offices.

Australia Post moved some 4,500 employees to working from home in a matter of days.

It also moved to having photos as a proof of delivery of letters and parcels, uploading more than 500,000 extra photographs on the first day.

It had also chartered up to 17 planes and co-chartered planes with other companies to deliver parcels and opened another 16 new processing sites in the first few weeks.

Temporary regulatory relief had also allowed Australia Post to retain up to 2,000 postal delivery workers, who usually deliver mail on motor bikes, to deliver in vans allowing them to deliver an extra 40 million more parcels than in 2019.

She said this allowed Australia Post to avoid making a loss despite spending another $500 million compared to 2019.

She said Australia Post had opened the largest automated parcels sorting facility in the southern hemisphere in Brisbane before Christmas last year.

It was planning to open a new facility in Melbourne West next month which could process up to 140,000 parcels a day by Christmas.

It was also investing in Adelaide’s first automated facility and was “actively planning” its next major parcel super hub.

Ms Holgate said e-commerce presented “an incredible opportunity” for Australia to accelerate its economic recovery from the pandemic.

“As lockdowns forced many brick and mortar stores to close, and customers to stay home, businesses turned to e-commerce during COVID to help reach existing customers and target new markets,” she said.

“There are so many lessons to be learned from this time which can help our country going forward.”