(MGMT29010) business innovation assignment exploring innovative practices that the Australian post can utilize to reduce postage package theft

Question

Task: How can the Australian postal services use business innovation assignment strategies to identify suitable innovations that can be used to reduce or stop postal package theft?

Answer

Introduction
Package theft has been identified on this business innovation assignment as a major concern for communities around the world and the popularity of online shopping and home delivery have resulted in the increase in number of parcels stolen from neighbourhoods. Package thieves, otherwise popularly known as “Porch Pirates” are a growing concern for e-commerce websites, logistics companies and even home security vendors as it affects all (DeliverySafe, 2022). A lot of online shopping customers have either changed their plans to stay home for getting parcels directly from the delivery person or reduced their shopping frequency to avoid their packages from being stolen. On this business innovation assignment it is observes that Although home security systems have provided with CCTV cameras that directly stream live footage of the front porch to the customer’s smartphone, in most cases, the package content are either used or destroyed before the thieves are apprehended by the police. Also, porch pirates have been using masks to prevent identification and recovery of stolen packages might take several days making it a pertinent issue.
This is a major reason, that logistics and delivery companies are keen on developing anti-theft package delivery systems that would help alerting customers and police authorities about stealing in real-time and subdue the porch pirates to a great extent (Parcel Pending, 2017). Australia Post, the government postal service in Australia is still one of the leading package delivery companies in the country and is planning on coming up with a robust system to prevent stealing of parcels.

business innovation assignment - The Big Idea
In 2019, Australia Post invested extensively in technology-based infrastructure programmes to broaden its product and service range. Although letter deliveries dropped after 2015, about half of its revenue came from parcel delivery and is still preferred by many Australians due to its accountability on parcels delivered (auspost, 2022).as per the business innovation assignment findings, a cost-effective yet hi-tech anti-theft system would cater to major customer pains and ensure efficient logistics services through innovation.

The Problem to be Solved
The major problems that Australia Post customers and online shoppers face due to increased stealing of packages are as follows.
? Change in plans to stay at home for receiving packages directly from delivery person.
? No accountability from e-commerce organizations and logistics companies for stolen packages.
? One in five people in Australia had their packages or parcels stolen from the front door due to increase in number of porch pirates.
? Inability to prevent stealing through home security systems despite monitoring the house through live feed.
? Inadequate support from local authorities and police due to lack of infrastructure to prevent stealing in real time.
? Majority of the stolen packages are either consumer, destroyed or recovered after considerable time leading to loss of millions of dollars each year.

How can package theft be prevented in real-time through proactive effort from the neighbourhood security personnel and damage worth millions be stopped?

Problem Insight
A 2021 business innovation assignment survey across various regions of Australia revealed that package or parcel theft was a common problem in Australian neighbourhoods. While online shopping in Australia reaches about $5 billion during the Christmas, almost 58% of people complain that their packages were stolen due to their absence during the time of delivery (Neighbourhood Watch, 2022). While it is the highest in South Australia with 22.2% followed by Western Australia and New South Wales at 15.5% and 12.5% respectively, Queensland have the lowest rate at 7.5% (Hughes, 2022). Additionally, 45% of the Australians also complained that they are not provided with other delivery options that ensure better security.

Figure 1: Parcels Stole from Outside in Australia (2020-2021)
(Source: Hughes, 2022)

Despite installation of state-of-the-art security systems at home, lack of a connectivity system between the home owners, logistics companies and local security personnel, no form of effective measure can be taken. Use of technology and inter-connectivity between the stakeholders is necessary to purse porch pirates in real time and retrieve package by catching them red-handed.

business innovation assignment - Target Customers
The target customer segment for this novel delivery service by Australia Post identified on this business innovation assignment are the customers who use logistics services to get their online shopping packages delivered or receive parcels from their friends and families via post. As of 2022, the market size for online shopping have increased by 8.9% and has reached $62.3 billion where over 5 million households participate each month (Chavda, 2022). Customers who are away at workplaces and unable to receive the parcels at home are the key target customers for this service. Online shoppers who had to leave house due to sudden personal plans would also be targeted by Australia Post.

Portfolio of Generated Solution Concepts
Australia Post has been selected for development of the new anti-theft security system due to the following reasons. • Nationwide coverage through its 4,330 outlets.
• Government backed funding to develop security measures.
• Ease of sharing information with security personnel through inter-agency communication.
• Serves more than a million customers every day.
Based on technological innovation through smart product, connect devices and Internet of Things (IoTs), the 3 most effective concepts are as follows.

business innovation assignmentConcept 1:
Installing electronic mail box outside the front door that can only be opened through security code shared by the logistics company with the customer and delivery person. This would prevent unauthorized access but would require heavy upfront installation cost.

business innovation assignmentConcept 2:
Motion sensor activated chip provided with the parcel by Australia Post that should be pre-registered to customer id and tracked by both the company and the customers through their smartphone devices. Package delivery can be tracked in real-time during delivery as well as any displacement would trigger alarm indicating stealing by porch pirates. business innovation assignmentConcept 3:
Geo-location tracking of delivery process further extended through smart connected devices where the customer can check package location even after delivery. Pre-installed security system would include a grid network connected with the package, customer, logistics company and neighbourhood security personnel (Harvard Business Review, 2016).

Solution Selection Analysis
The motion sensor chip in ‘Concept 2’ has been selected as the optimal solution to prevent stealing of packages from the front door. It is not only a cost-effective solution but can also make the delivery process quite efficient where customers can remotely track movement of their packages without consistently checking through live footage from their home security systems. The solution should consist of the following aspects.

? A minimal upfront service charge by Australia Post to wrap the parcel in a special smart packaging consisting of a motion sensor device.
? Sensor device registered to customer id allowing customers to track package through Australia Post smartphone app right from the delivery hub up to receiving of package at hand.
? After package is delivered by the logistics staff, customer remote confirmation through app using the grid network between them.
? Any movement or displacement by anyone other than the customer would be detected if sensor chip is not deactivated from the smartphone app.
? Alert option from the app triggered by the person would be detected at company headquarters and nearby patrolling security personnel dispatched at customer address.
? Returning of smart packaging and sensor chip to Australia Post outlets by customers providing them with additional credit score and preventing any extra charge on future packages.
Novel Value Proposition and Benefits

Australia Post:
Get parcels and packages delivered to your doorstep with diminished risk of being stolen by porch pirates. Ease of tracking parcels delivered at door step through smart connected devices and security alert through grid system allowing security personnel to catch package thieves in real time is another important point identified on this business innovation assignment.

Market Size and Competition
The business innovation assignment research shows, the parcel delivery service by Australia Post has a stable revenue of nearly $3 billion, almost half of their total revenue of $6.37 billion (Marsh, 2022). The average market size of online shopping in Australia is about $47 billion with about 5 million households engaging in online shopping. E-commerce websites hire various logistics services to deliver the packages where private companies like the Toll Group and Linfox are the main competitors.

Competitive Advantage
Despite its countrywide outlets and robust logistics infrastructure, Australia Post is not preferred by the customers over private logisticscompanies due to the lack of fast delivery services. However, Australia Post can gain considerable competitive advantage by offering secured delivery of packages with minimal risk of them being stolen.

Strategic Fit
E-commerce websites like Amazon, Woolworths, Ozbargain, etc. as well as logistics companies like DB Schenker, Linfox, Aramex, etc. offer services up to the delivery point beyond which any damage or misplacement of the package is the sole responsibility of the customer. The business innovation assignment proposes that Australia Post can put use their recent investment on technological infrastructure for extending the services until the package is safely acquired by the customers, thus allowing them a lucrative business edge over its competitors.

Critical Business Model Assumption and Uncertainties
Assumptions:
? Customers would be willing to pay a minimal registration fee for covering cost of the motion sensor chip due to lack of any other secured package services.
? The high internet penetration rate and increased smartphone ownership would enable most Australians to utilize the grid network system and track their packages remotely.
? As both the postal service and local police authorities are government agencies, interlinking the grid network would not require any special protocol.

User Desirability:
With the increase in number of packages stealing events in the recent years, about 45% of Australians have expressed the need for a more secured way of parcel delivery in their absence (Canberra Weekly, 2020). Also, teenagers and young adults being the majority of online shopping customers, require a tech-enabled solution that they can adopt easily and track their packages in real-time.

Business Viability:
The business is initially capital intensive where an upfront cost is required to develop sensor chip induced special packaging. The business model of Australia Post is self-funding and profits are generated by using its assets and resources which is backed by its $7.5 billion revenue stream (Baker, 2022). As the customers willing to get a secured delivery service would be paying a registration fee, return on investment is immediate with a slow trickle of revenue through future subscriptions.

business innovation assignmentTechnical Feasibility:
The technological advancements in smart connected products and microchip development makes the entire premise of value proposition quite feasible. Also, the upgraded technological infrastructure at Australia Post in 2019 can support the grid network required for connectivity among the stakeholders.

Argumentation for the Selection of Innovation Tools
Value Proposition Canvas:
This business model tool helps position the product offerings of a company around the customer value requirements. Perspectives of both sides involved is represented through this model where the customer pain points and solutions offered by the company can be shown [Appendix A].

Business Model Canvas:
This is a visual representation of the business model of a company consisting of the key strategic factors that helps in analysing the business strategy. The 9 strategic attributes identifies on this business innovation assignment will help visualize the overall functioning of the business. [Appendix B]
Innovation Model:

This tool helps balance the three aspects of desirability, viability and feasibility of a business idea for developing a unique value proposition.Aligning key aspects from all three attributes help to reduce costs, risks and chances of failure associated with a new business idea [Appendix C].

Candid and Critical Self-Reflection
The reflective section is based from a perspective of a tech savvy young adult who has experienced incidents of package stealing and knows how frustrating it is to come home expecting a parcel and finding it has been stolen. With heavy digitalization, most young people prefer online shopping over physical retail and paying upfront digitally to avoid any hassle of cash payment. For this reason, I was keen on conceptualizing various methods through which packages can be delivered more securely or track package thieves in real-time. However, I realized that due to the high upfront cost of setting up smart-connected-products through motion-sensor microchip as well as installation of security mail box has prevented implementation of this value proposition. However, asking for an initial registration fee by Australia Post can reduce the time of ROI making it a viable option. Moreover, the draft for each conceptual idea has been recorded and stored that can be later analysed to develop more effective security methods to prevent package stealing.

Conclusion
The rapid digitalization of everyday aspects only imply that online shopping would go up over the years and business for logistics companies is about to increase. Moreover, with the increased hectic lifestyle and more family members working jobs would result in delivery of packages at the doorstep when no one is at home. Package contents vary a lot in cost and value and is subject to get damaged if not received by the customer on time. This creates a lucrative business prospect for secured delivery of packages preventing it from being stolen or at least recovered immediately after taken by porch pirates.From the business innovation assignment research it is proposed that the Australia Post should take advantage of this value proposition through their existing infrastructure and nationwide outlet positioning and gain competitive advantage over the private logistics competitors.

Reference List
auspost. (2022). Use a 24/7 Parcel Locker.business innovation assignment Auspost.com.au. https://auspost.com.au/receiving/collection-points/use-a-247-parcel-locker?fm=search-organic:parcel:1 Baker, E. (2022, February 24). Australia Post reports revenue growth for HY22. Parcel and Postal Technology International. https://www.parcelandpostaltechnologyinternational.com/news/operations/australia-post-reports-revenue-growth-for-hy22.html

Bland, D. J., & Osterwalder, A. (2019). Testing business ideas: A field guide for rapid experimentation. John Wiley & Sons.
Canberra Weekly. (2020, December 16). One in four Aussies experience parcel theft by “porch pirates.” Canberra Weekly. https://canberraweekly.com.au/one-in-four-aussies-experience-parcel-theft/
Carter, M., & Carter, C. (2020). The creative business model canvas. Social Enterprise Journal.
Chavda, S. (2022, May 11). Australia’s Online Shopping Behaviour Report - 2022. Savvy. business innovation assignmenthttps://www.savvy.com.au/
australias-online-shopping-behaviour-report-2022/#:~:text=On%20average%2C%20more%20than%20five

DeliverySafe. (2022). Who is Responsible for Package Theft and What is Being Done about It?DeliverySafe. https://deliverysafe.com/blogs/news/who-is-responsible-for-package-theft-and-what-is-being-done-about-it
Harvard Business Review. (2016, February 12). How Smart, Connected Products Are Transforming Companies. Harvard Business Review. https://hbr.org/2015/10/how-smart-connected-products-are-transforming-companies Hughes, C. (2022). Australia: packages or parcels stolen from outside their door by state 2021. Statista.
https://www.statista.com/statistics/1256172/australia-packages-or-parcels-stolen-from-outside-their-door-by-state/ Marsh, S. (2022). Australia Post boosts revenue to $4.80 billion on the back of largest parcel volumes in history. Www.9news.com.au. https://www.9news.com.au/national/australia-post-boosts-revenue-to-480-billion-on-the-back-of-largest-parcel-volumes-in-history/5a2f7aff-14c8-4036-9ac3-979c06298e96
Neighbourhood Watch. (2022). How to prevent parcel theft. Neighbourhood Watch Victoria | Let’s Watch out for Each Other. business innovation assignmenthttps://nhw.com.au/articles-and-resources/parcel-theft/ Osterwalder, A., Pigneur, Y., Bernarda, G., & Smith, A. (2015). Value proposition design: How to create products and services customers want. John Wiley & Sons.
Parcel Pending. (2017, September 25). How to Prevent Package Theft. Parcel Pending. business innovation assignmenthttps://www.parcelpending.com/blog/top-5-scary-facts-package-theft-prevent/

Appendices
Appendix A: Value-Proposition Canvas

(Source: Osterwalder et al., 2015)

Appendix B: Business Model Canvas

(Source: Bland & Osterwalder, 2019)