PostNL N.V. (PNL) Earnings Call Transcript & Summary

Welcome at PostNL. Thank you for joining our first Deep Dive on Digital Next. My name is Jochem van de Laarschot. I'm the Director of Communications and Investor Relations at PostNL. This is the first time we organized a deep dive for investors and the financial markets. It allows us to engage with you on content and topics not directly related to the hard financial facts and figure. Today will be all about digital and our digital strategy. It will be about the key activities in digitalizing our business to realize our ambition to be your favorite deliverer. Our program for today. Bart Delmulle, our Chief Digital Officer, will kick off. Bart will elaborate on Digital Next and zoom in at transforming the core commercial engine at PostNL. He will be followed by Renée van Geffen, our project lead for last-mile delivery. She will present delivery preferences, a project that will provide consumers with more control over-delivery of their online orders. After that, we open the floor to your questions to be answered by Bart, by Renée and by Marcel Krom, PostNL's Chief Information Officer. The presentations will be made available through our website where you can also find a replay of the event later on. Time to introduce Bart Delmulle. He joined PostNL last February as Chief Digital Officer, a new role in the company at the level of the Executive Committee. Most recently, he was a partner at Bain & Co. Before being, he was a company global leader in the Simple & Digital practice at McKinsey & Co. In these roles, he advised several Dutch and European companies in their transformational digital journeys. Bart brings a broad experience in the broader tech, digital and e-commerce space to the table. He has a distinctive track record for creating value in digital and customer experience transformation. Bart, over to you.

Good afternoon, everybody, also from my side. It's a pleasure to be here and to talk to you through Digital Next. Today in a short presentation, I want to do 3 things: I want to quickly recap why we're doing Digital Next and our Digital Next Acceleration and how we're approaching it; and then deep dive on the transformation of our commercial core to show you real examples of what we've been doing and what we're working on; and lastly, indicating the way forward and how we're going to approach it in the years to come. The starting point is, of course, as already pointed out by Jochem, that you want to be the favorite deliverer. What does this mean? We want to deliver special moments, and we want to do so by being the leading logistics and postal service provider into and from the Benelux. But of course, the world is an ever-evolving space, and especially our market is evolving rapidly. It does 2 things. It raises the expectations of our customers and consumers drastically, but it also provides opportunities to reinvent our operations. The bar for customer experience is rising all the time. Everything you get in this ever-digital world is very simple, easy-to-use and very digital. On top, there's many more digital services that are possible. Also in our industry, there's a lot of data that we can use to offer better services to our customers that help them in turn to be successful. And of course, our platform approach is simplifying everything. On the other side, there's more and more real-time data. For example, now also the data that we get from our 240,000 roll container trackers that we can use to drive and steer our operations in real time. And at the same time, there has been massive advances on robotization and automation, for example, for processing but also for picking or for cross-docking. And of course, it is a more and more open world. In this world, we need to be connected and integrated seamlessly with our customers. So how is Digital Next going to contribute to this? Our vision is actually to be the most efficient and innovative e-commerce and postal logistics platform; into and from the Benelux, of course; that is really seamlessly integrated with both our customers and consumers; and that we are driven by data. And together with our customers, we want to deliver distinctive experiences to our customers. So what do we promise? Three things. One, we want to make it very easy and smart to interact with us, customers -- in the way our customers and consumers want it. We want to make it very easy for our customers to become customers and then very easy to do business with us, whether in our daily sending cycle or whether at any service from us. Secondly, we want to run the most efficient and adaptable supply chain, again, data-driven, so that we actually can provide the flexibility and speed to our customers that they need. And we want to offer more innovative products, normal products, traditional products, but also digital products and services and platform that actually helps them to be successful in an ever-growing e-commerce market and postal market. And to do so, we will actually are not starting from scratch. We actually have made major steps in the past years on many aspects. We have very much modernized our -- big steps in modernizing our IT. We have done away with a lot of legacy. We have lots of applications that are native to the cloud. We have modernized our core systems. But we also have made major steps already in automating our operations, automating sorting, but also robotization and picking. And we also have made major steps already on our digital front end, our interaction layer, both on the B2C side and the B2B side. On the B2C side, with our app and our bots, and I'll come to it. On the B2B side with our portals, our APIs and plug-ins. I'll also talk about those. So how are we approaching it? We are taking a programmatic approach to do this acceleration, consisting of 3 value drivers and 3 foundations. The 3 value drivers are: One, to transform our commercial engine, that's what we will discuss today; transforming our core logistics and operations; and on top of this, better, healthier, more digital core; also innovating in terms of services, services to our consumers, for our customers, but also moving more towards an open platform. To enable this, there's 3 things you're working on. We are working on our IT foundation, ever-modernizing this even more, but also making it faster so that we can actually bring faster change to the market. And secondly, improving our data foundation. Making more data, more higher-quality data, easier available for the business to use and exploit. And of course, there's a big people aspect, especially in a company like PostNL. We're also changing our DNA. We want to go from doing digital to being digital. There are some critical aspects in there. For example, becoming a truly agile enterprise, but also stepping our digital -- up our digital skills and capabilities and really changing towards a more digital culture. If I now dive into our commercial engine, we look at it in 4 big components. First of all, the simplification and making it smarter of our product portfolio. Both as a value driver in its own right, but also as an enabler to digitize because there's a lot of complexity in it, logical for a company like us, and we will need to reduce that complexity in order to be able to digitize. So it's almost a prerequisite for the rest of our digitalization. Secondly, and that's a very big focus for us. As a service company, with the sum of all the customer journeys that you actually have, you want to actually deliver seamless journeys to our customers and consumers, both from a customer interaction point of view, but also in an internal point of view, and we want this to be [ a light ]. Thirdly, we want to make a tremendous shift towards digital-first channel mix, to our self-service, both in B2B and B2C. And lastly, we want to do this smart. We are investing, and we have already invested in creating one very good view, both on our customers, our e-commerce customers, for example -- but also of our consumers. [ One clan-built ], as you call it in Dutch, where we actually have a very good view, a 360 view, on our consumers. In everything we do, we really take a digital mindset. There's 4 fundamental pillars underpinning all this. First, simplicity, I mentioned it already. You can't digitize what's not simple. There's a lot of legacy. We need to reduce that complexity. Secondly, make things smarter, add intelligence at data and at AI so that we can be more individualized, that we can be more proactive, that we make everything smarter. And thirdly, of course, simple by design -- digital by design. A digital-first mindset. We do things digital. If we can't, we do it physical for those moments of true -- that truly matter, for example, but then we even do it better by adding intelligence. For example, by giving good tools to our front-line, to our [ verlosser ], deliverers, but also, for example, in all the call centers. And underpinned by that needs to be a real customer obsession. You will see this coming back. We want to do this outside-in, starting from and with our customers and consumers. We've done a lot already, and we are advancing. We will now talk -- or I will now talk through some examples, and then later will Renée dive into our consumer and control initiatives. I'll do so by talking quickly through 5 examples. One of the things we do, and I mentioned, is really rethinking our customer journeys. For example, I become a customer, I make a return, I receive, I get help, both for consumers and our customers. As I said already, we're a service company. In fact, we're almost -- the sum of all this journeys, if you fix those and redesign those for a digital world, one by one, we will actually have transformed the company. To do so, we really have a structured, repeatable approach that we're deploying across the company, a journey factory, in which we are now in wave 1, where we started with, for example, I return and I get help. If I go into the I return journey. Where we're at, actually quite far. What are a couple of examples? We're, for example, injecting AI so that we have more predictability in returns for our customers so that they can plan better and deal better with it. We're also infusing digital tools so that actually we get more to label as returns that we are sure that the consumer has sent it back. So there is more certainty. We are investing kind of changing the interaction layer. So there's more proactive communication to our customers so that they know what's coming and not, and there's [ less ] predictability. But we're also building in, for example, technology so that we actually know what the feedback is of our customers so that we can act on it and get ever better. And we are deploying kind of the IT systems for that. If I change to more the interactions and the channels and start with the consumers. We are shifting quite dramatically to a self-service kind of environment, structured or starting from our big and strong PostNL app, on which we have 7 million users and in which lie 6.2 million accounts. An app that has a rating of 4.5 already, a very good rating. An app that we will continue to build out as a secure communication channel so that customers know, consumers know that we are talking to them, and they are talking to us so that we can have secure in-app communication, but also use it as a platform for kind of additional services. For example, the traffic meters, so that they know whether or not there is a lot of traffic at a retail point or not. We will complement that with our self-service channels in which we continue to invest. We have made good steps on our bots in B2C, but also B2B. We've done with Sam, for example, which we're actually continuing to build out. At the moment, we have 300,000 conversations per month, half of which actually lead to resolution through the bots, which is a major step forward. And of course, we're going to complement that with our other channels, also online channels, postnl.nl; but also physical channels and our call centers, where we're improving. One of the things we're also doing in all this is to make it more personalized, individualized, so that customers truly get what they want and to also make it proactive. If I shift to the customer side of things. We're also expanding there, our channels and offering towards self-service. We have our portals, mypost.nl, where we already have 80,000 users, more or less the whole base -- customer base is migrated to it. On this portal, our customers can actually do full self-service and find a lot of functionality that helps them in their business. For example, pre-announcements, of insights in their business, insights in their invoices, insights and where cases stand and in case they need help. We also have already developed a dedicated portal for our smaller customers that actually need more standardized products, a more simple portal through which they can self-service them again. And of course, we do all the personalized dashboards for our customers on that, so that they can actually see and check the performance of our delivery, that they can see how many returns are coming. Functionality we're building out. So it becomes, really true, one view on their business. In addition to that, we're also building the channels, of course, for our digital interactions. At the moment, we have 200 APIs already, which are being used all the time, which are also growing quite rapidly, with 50% where -- which are being used for Track & Trace services, with also label generation and other shipment services. This is growing quite dramatically. We already have 7 billion API calls per year. If you think about that, that's actually 5, 6x as much as that we are processing parcels per day. So you could say that we're already quite fantastic or quite a significant digital player. And that we're complementing also, which is here on the right, with plug-ins. We already have a number of plug-ins. The latest one we announced the Shopify plug-in, again, which allows our customers to actually better run their business, which will have to do with pre-announcement or delivery options, and we're continuing to build those out. Last example. Last example is around our last mile. Also there and in our retail, we continue to drive for self-service and automation. At the moment, the rate is around 8% in terms of self service, and we continue to build that out. We are piloting a number of things, for example, our new Cleveron in Utrecht, but also all kind of new self-service concepts in retail, which also there will actually drive kind of the better self-service of our customers. Just to highlight a little bit what we're doing beyond our commercial core and what we are doing in our operations and then also on the business models. In parallel to this, we're also transforming our logistics and operations, starting from a single vision with 3 pillars. One, we want to really move towards a fully data-driven and real-time supply chain where we can use all the data to really steer it. That's why this year, we have developed -- or introduced, sorry, the 240,000 IoT trackers on our roll containers. But we're also actually doing machine learning so that we can actually do better forecasting so that we can have better real-time alignment with our customers. Secondly, we continue to invest in the robotization and automation of our core logistics. We do robotization in our processing. We do automation in the packing. And of course, we are continuing to evolve our cross-ops, also into automating that. And lastly, third component. We're also digitizing our front line. The whole delivery, the depots. We are providing tools to our drivers to be more productive. For example, machine learning-based tool that helps them to load their vans, but their van loading team so that they are then more productive when they actually do the delivery. But we're also digitizing, for example, the tools they have, to come back, to debrief, which allows them to do it faster, but at the same time, again, allows us to capture data that we can use to actually make and optimize our delivery process. Once we have this solid core and digitized core, we have an opportunity to actually add to it. And we have prioritized 3 digital innovations or business model we want to double down on and invest in. Those 3 should be additive and reinforce our core. The first one is consumer services. As indicated, we want to build from our very strong app. We actually want to turn that into a secure communication channel, drive to in-app communication and make it a true engagement platform in which they interact with us all the time and the other way around in a personalized fashion. So that we'd actually get to know them better, even better, and can even serve them better. Secondly, we want to -- based on all the data we have, whether it's operationally or linked to our daily sending cycle or insight in our consumers, we want to actually help our customers by providing them even more data and insights in real-time so that they can run their business better and so that they are more successful. Building on our APIs, but also with the plug-ins. And lastly, we want to evolve more to an open platform. We want to open up our app platform so that we can add new operators. New operators, for example, green operators or CMD that are more flexible than us so that we even have a higher density and a better proposition towards our e-commerce players in terms of last mile. Those 3 should also reinforce each other. If we, for example, add green networks, you can also think about new revenue models again on the consumer side. They will also reinforce each other. More options with attract more customers, e-commerce customers, will again attract more consumers. So it's a flywheel we're going to put in motion for PostNL. Of course, all this needs the foundation to make it happen. We are strengthening our IT foundation. We continue to modernize. We shift to a cloud-based application landscape. We continue to serve -- to move to a service architecture, to improve and build out our internal API, so that we actually can develop faster and accelerate this transformation much faster, but also are more agile and more adaptable in the market so we can recompose ourselves. Secondly, as said, we also continue, and that's a big priority, to invest in our data foundation, making the data available, quality data easily available for the business. So we're working at the moment on quite some initiatives on that to make that happen, so that we can really unleash all the data we have. But also, in addition, how to use that data? So we're setting up and we're thinking about a use case factory where we can actually more rapidly identify, prioritize and deploy the use cases like the ones we've done in the past. And lastly, it's about our digital DNA, a very strong focus point and where we're investing a lot of time and attention and energy with a couple of components. Our agile model, which we are evolving, which had a strong starting point, which we're bringing to the next level so that we're truly agile at scale. We have now more than 1,000 people working in our agile teams delivering all this. They are actually delivering 700 features by quarter, which is quite significant. And the acceleration over the past year has allowed us to be -- to deliver, in fact, 60% more features than we did last year. So year-on-year, 60% more productivity in our whole agile engine, 2/3 of that is all-digital features, and that at even higher reliability than it used to be before. But we're also investing in our people, in building the capabilities and skills. We for example have a big digital academy in which we continuously train 900 core people in all the elements of digital and also all the things we're doing, which we're also scaling up. And we are also building and investing in building new ways of working, new capabilities, dev ops, machine learning ops, self engineering, so that we actually more and more, get it into our genes to do digital and to be digital. So how are we going to go forward? I will not go through this entirely. But we have a clear plan, that's the message, where we are now in a phase of focused acceleration across all the dimensions I talked about, where you've seen some of the big initiatives, which we're then rapidly going to scale and then going to embed. And we're going to work systematically across those 6 dimensions, and we know where we need to be on all these 6 dimensions. We will also report back to them -- on them to you on a periodic basis. But it's not rigid. It's well thought through, but it's not rigid. We also have a test and learn approach. We will actually see what works, test and adapt along the way. That's how it is. We are sure that we will discover a lot in the years to come that you might have not thought about, but that we still need to pick up, given that the world continues to evolve very rapidly amongst us. Maybe before I close. If you think and listen about this presentation and you listen a little bit to the undertone and a couple of the key aspects, there's a couple of elements to point out. First, we are starting from a very strong foundation that has been put in place over the past years, through this team, and especially on the leadership of Marcel, which will also join us later. Secondly, we actually have a well thought through, aligned, well sequenced and doable plan. In fact, in this transformation, we really think a lot about the do-ability. In the end, all the things we need to do, the digitization, we need to do still needs to be made. And there's quite some thinking to be done on that to make sure that we can do as much as possible with the resources we have. Third, we are not only focusing on what value creation levers. We're also focusing on how to get it done and with whom to get it done. That's where it typically goes wrong and where there's too little time invested. We have taken the opposite and really are overinvesting on that and over-indexing on it. Fourth, agile, as I mentioned. We have a good plan, but we will still test and learn and adapt along the way. And will do so with our customers and our consumers. We'll do it with them and will do it in kind of an open way. And for sure, we will focus on the value creation, capturing the benefits. So what will this bring if we do this and we do this successfully? For our customers, it will be an easy company to do business with. And we will jointly deliver great experience to the consumers. I will help them to be successful in a thriving e-commerce market. Secondly, for our consumers, they will get these distinctive experiences. And they will be in control. We will put them in control over what they receive. And third, for operators will be a platform, a platform of opportunities in which they can connect. So what will it bring then for us and our employees? For our employees, a thriving company where it's exciting to work in a dynamic environment, where there are opportunities to be part of the digital world and to learn digital capabilities. So to become an even more attractive employer that attracts, develops and retains talent. And then of course, for PostNL and the shareholders a more perform-ant company, EBITDA and cash flow, but also a healthier company, a company that's better positioned for the future. And lastly, also almost a goal in its own right, a more faster and more adaptive company. Because if there's one thing that we all know, is that in a digital and more digital world, you end up in the state of continuous change.

Thank you very much, Bart. We look forward to see you in the Q&A later on. We move on to our next speaker, Renée van Geffen. Renée is our driving force behind innovation in an important and rapidly changing part of the customer journey. She has several years of experience in e-commerce, logistics and product management. In recent years, Renée was responsible for digital products at PostNL. She was involved in the innovation of Track & Trace and consumer in control services. Renée, over to you.

Good afternoon. The last mile is where we make the difference for customers and our consumers. We may deliver post and parcels on a large scale, but we're working really hard to making the delivery of a parcel a personal experience. It's the combination between seamless digital solutions and real contact between the deliverer and the receiver that hits the sweet spot and helps us achieving our ambition of being the favored deliverer in the Benelux region. PostNL strongly focuses on constantly improving its customer journeys. We know from customer research that when consumers have been given control over their delivery, that their satisfaction is significantly higher. So what we do is we give control to the consumers. And this may sound simple, but it's a major call on our logistic capabilities, and it requires innovation in terms of information and interaction concepts. On February 15 this year, we introduced the delivery preferences in the Netherlands. And this is a great example of how we're changing our core commercial engine. And it's one of the pillars needed for accelerating our digitalization. This new service enables us to achieve 3 important goals. First, we increase the digital engagement with receivers and boost their satisfaction; second, we collect new relevant data about receivers, and with that, we can design further new services and increase our competitiveness; and third, we gain operational efficiency. So before we go into this a little further, I'd first like to share with you what the delivery preferences are and how they work in the real world. And this next video has that story. [Presentation]

As you could see in the video, it takes just a few clicks. And then as a consumer, you've set your delivery preferences. But behind the scenes, all kinds of things are now kicking into action to make sure that we deliver your parcel according to your preferences. And to create a seamless journey, we have to fully align our digital interactions with our operational processes. This starts with the e-commerce players. They send out their parcel with a bar code, but they also send us in advance a digital data file containing all relevant data about the parcel, for example, the receiver's email address. And this data sets off a whole chain of processes. For example, our machine learning model will predict the day of arrival at our sorting center. But we also use this data file to match the parcel to PostNL account and therewith to the delivery preferences. And of course, we comply with privacy rules and regulations at all times. Only people with highly validated PostNL accounts are able to set their delivery preferences. That's to say, we must be completely sure always that the parcel is addressed to and meant for the person to whom the PostNL account belongs to. Today, we have 6.2 million PostNL accounts, of which 2.4 million have the highly validated status, and this provides a strong foundation and a springboard for further growth. So the delivery preferences. When we started in the Netherlands, only on a small scale. So we took the first steps, and unfortunately, we were not able to set live the standard preference, straight to PostNL location, due to COVID-19, but we were able to introduce the delivery preferences, not at home. So this year, we started small, but in the following weeks, we rolled out the service throughout the whole country. And up until now, we send out 1.8 million emails to people with PostNL accounts, inviting them to set their preferences, and 140,000 of them have already done so. In addition, another 11,000 people have set their delivery preferences on their own initiative. So if we look at the results, the options that people have chosen, we see that 24% have chosen a pre-agreed safe place, 31% opted for the retail location of PostNL and 45% of the people chose delivery at neighbors when not at home. We also see in our data that frequent online shoppers are over-representative. They set their delivery preferences 1.7x more often than non-frequent online shoppers. So this new service enables us to deliver more parcels at the preferred location at first attempt. And from consumer satisfaction research, we know that satisfaction can be up to 40% higher. If we -- if consumers have control over the delivery of the parcel as compared to a failed home delivery attempt without exercising this control. In addition, the service also enables us to increase the digital engagement that we have with receivers. People who've set their delivery preferences are seen online -- 30% more online on our platform. And this is key as it -- as a strong relationship with consumers strengthens the core of our business. So this new service does not only increase our competitiveness and increase consumer satisfaction. We -- it also provides us with an opportunity to gain more operational efficiency. Please note that not all delivery options hold the same price tag. So to achieve structural consumer satisfaction and operational efficiency, we have to strike a balance in the options we offer, when and where. And we do this on the basis of our data. So the delivery preferences only have just gone live, and we're really pleased with the first results. So the next few weeks and months, we'll spend strengthening the foundations and ensuring high quality levels. So one example. We will introduce a photo when the parcel's delivered on the agreed spots. But we see new opportunities. For one thing, the segment of frequent online shoppers is bound to grow, increasing the potential for this new service. And by adding more options, the relevance of the delivery preferences will grow as well. So what the best strategy is depends on the -- sorry. It depends on our data and the things we find in there. So only time will tell what that is. Thank you very much.

Thank you very much, Renée. We will now move on to Q&A. Next to Bart and Renée, we are happy to have Marcel Krom with us. He is Chief Information Officer and member of the Executive Committee of PostNL. Since 2009, he is one of the driving forces behind the digitalization of PostNL. Marcel and his team built the strong IT and data foundation, on which we are building and accelerating our digital transformation today. He was also the winner of the CIO of the year award 2020 in recognition of his work on the best customer experience, innovation and efficiency. So please welcome on the stage Bart, Marcel and Renée. Some practical information first before we begin. People invited to join this virtual meeting can indicate that they would like to ask a question. [Operator Instructions] Just to be sure, this feature is not available to people following this session via the webcast. When it is your turn to ask a question, you will get a pop-up about using your microphone and camera. On the bottom of the pop up, please click on the right green button, and then we will be able to get you live-connected to the studio to ask your questions.

But while I'm here, I'll take the liberty to ask the first question myself to you, Marcel. What is the best decision that we took in the last, let's say, decade when it comes to digitalization?

I think we made a lot of decisions in the last 10 years. I think one of the most important decisions is that we kept on working on our IT infrastructure during good times and during bad times. And what I mean with that is that, in 2012, where it was -- where we had a difficult time, we made the real choice to go fully for the cloud. And with moving to the cloud, we also made 2 extra decisions that is taking out legacy relentlessly but we also went into a new enterprise architecture, which was a decomposing of our functionality. And it sounds a little bit complex. But if you have big systems which are tied together, then it's very hard to change very fast. So we made smaller functionalities, and that is what we have done for the -- from 2012 to 2017. And the next level is that we have built digital building blocks, like an API system, like a data lake, like the [ blue ridge ], which enables us to build digital business models. And the next step is that we will go fully native into the cloud solutions with micro-services which we can tie together via very strong interfacing via APIs. And that scalability is a real necessity to make progress in digital, but also to be more flexible. So it's, I think, relentlessly the same choices in making our landscape more flexible and more scalable.

Thank you, Marcel. [Operator Instructions] I'll ask a second question to you, Bart. You have just recently joined PostNL. Can you tell us a little bit about your first impressions when arriving on -- at the company?

Yes. And as I pointed out, building on Marcel, there's an extremely strong foundation to build from on 3 dimensions: First, it's the IT infrastructure that Marcel has just pointed out, which has been extremely purposeful and very goal-oriented. So it's all additive. I think secondly, of course, the degree of robotization and automation there is already, in the process, in the picking and so forth, which, again, also is something PostNL is very strong at, and we can build from. And I think then the third component is really the build-out of the digital front end. So the build-out of all the digital channels, both on B2C and B2B and where that stands, which gives us, in fact, if you all combine it and combine it also with the knowledge there is already in the company, a good starting point to exploit it. It's not a digital transformation where some things have been done on the front end. And then when you look inside it, there's maybe not so much to see. Here, it's exactly the opposite, strong foundation to build from.

And when you look at customer centricity, which is a fundamental part of digitalization, where do you think PostNL is currently in the journey?

We are quite strong. We are still the favorite [ bezorgservice ]. The challenge is that we need to remain in an ever-changing landscape, as I pointed out, because expectations are rising all -- every day on the consumer side, driven by the digital natives, which make it very simple and easy to use. And of course, our digital per se, but also the kind of -- with the customers, where the digitalization is very important because it's not so much about the interactions between us as people and the companies, but more and more about the data that goes between both parties, in fact.

Given your background, I'm assuming you are well positioned to compare what you see at PostNL with what is happening at peers, also in the international context. Any observations there to make?

That's a same observation, a strong starting point. But yes, as I said, the world is moving, so we need to move also at pace. And so that's why this is not really a digital transformation, but it's the acceleration of the digital transformation. That's why we have a lot of attention also on -- yes, our operating model and how we are able to deliver faster digital innovation to the market. So our agile next, building the digital capabilities, getting to a digital culture. We don't want to just do digital, we want to be digital, in fact.

Thank you. I'm looking at the camera to see if anyone is raising their hand at this moment to ask a question. [Operator Instructions] If you're not asking the questions, then I will. Renée, a question for you with regard to the option to leave a parcel at a safe place when you're not at home. The advantages for both consumers and PostNL are clear, but how can we be sure that the parcel is still there when it is left in an open space around the house?

Well, the service is called safe place. So we really ask consumers to find a place around their house that's deemed safe. And upon delivery, we ask the deliver to assess that. So if he thinks that this place is not safe, for whatever reason, he will deliver the parcel at their neighbors or even at a PostNL retail location. But not all house halls -- or house types have a space around them where they can find a safe place. And that's why we're developing a parcel locker at this moment that you can install right next to your door so that more people have access to safe place around their house and can use the delivery preferences safe place.

The project has been running for a number of months, and we've seen first examples. When you look specifically at consumers, can you dig a little bit deeper into their responses, the sort of feedback that we get?

Well, most people are really enthusiastic about this new service. We see some hiccups. So some people, if they want to use safe place, for example, they said, "Well, just throw it over the fence." For example. So we have to -- well, everybody is still learning, right? So consumers are learning what are safe places. We are learning, "Oh, we have to think about this and instruct consumers better. We have to sometimes help our drivers a little bit to really use the service appropriately." But mainly positive reactions.

Thank you. We talked a little bit about peers. There's a similar question when it comes to the, let's call them, the smaller players, the start-ups who can move really fast into digital. How can we compete with that sort of group that is up and coming at the moment?

That's a good question. That's always the question. I think it's very important that we actually have a healthy core. That's why we have so much emphasis on it, that's why 80% of our efforts is on that. If you really digitize all our customer interactions, make it better, make a better experience, both for customers and consumers, create kind of these digital highways with our customers; but at the same time also really transform our operations and ultimately [ do sort ] them, I think then we'll have a better basis to do all these experiments on the new business models. Because then, we will actually be more successful in setting them up and bringing them to maturity. At the same time, will it allow us to actually exploit kind of the assets that we have already. We have very many assets, the attackers don't always have. It's just about us making it possible to use those in an attacker game. For example, if you talk about really being more of an open platform, yes, we are already acting like that internally. All the technology exists for that, it is fully decoupled. So we can actually just exploit that to become more of a platform that is open for third parties, as an example.

And maybe looking slightly broader to the market as a whole, so to say, and to the digital space that we are entering more and more. What are the -- some of the trends that you see that will impact basically everyone all around us?

We've talked about many. The big question is, how will the platform worlds play out in our industry? That has played out in very many industries. When there is friction, there's also a friction in our industry. The question is -- and we are not there yet, but what will be the impact beyond our industry? And how will that change actually how companies work and interact with each other? And also, how will it actually make it simpler for consumers? And will it displace some things that exist today?

Marcel, next question to you, it's about data integrity because data, obviously, is one of the key elements in everything we do in this area. Of course, there are concerns when it comes to cybersecurity and all that. What can you say about the measures that PostNL is taking to make sure that the data of our consumers, of our customers, is safe at all times?

Yes, that's a variety of measures. We have strict agreements with our partners who deliver the technology, outer cybersecurity part. We also have an internal cybersecurity department who gives us the lead, how to control all those aspects. And we have a combination of tech players around us who help us to protect our environment. So outer cybersecurity part, we do all we can. But of course, you never know whether it's enough because the world of cybersecurity is changing fairly rapidly. So you need to stay -- yes, you need to stay very, very, very alert. You see that each year, yes, we invest more into cybersecurity to protect our assets. And if you look into data integrity, then the generation of data, the preservation of data and the uses of data is, of course, technical, maybe a little bit difficult. But also out of privacy regulation, you need to adapt to those. And especially with the new regulation, we have to be very careful and to instruct our people and also to guide our people and to learn a lot about those new kind of regulation, what you can do and what you cannot do with data, to keep it as trustful as that we are as PostNL.

Thank you. We move on to the screen to Andre Mulder of Kepler Cheuvreux, who is online. Andre, please go ahead.

A question on the appearance of the Americans on the B2C market in the Netherlands. They're usually B2B players, but they are now also act as a B2C. I'm sure you're perfectly aware of what everybody is doing. So how do you look at these players? Where are you in compared to these players? Are you better than them? Or are you doing things differently? What can you tell us about that?

Bart, I think that's a question for you or for Marcel. So the question Andre is asking is how do we compare to the American companies that are coming to Europe and moving into B2C?

I think one of the -- I think Bart will add on. I think one of the major differences between those companies and us is that we are really looking into the infrastructure of the Benelux, how we can make a differentiation in our own markets. And what we see is that, especially on the area that Renée also has elaborated a lot on, is that the connection we have with the consumer, with the preferences, but also in the trust which we have with that customer group, is one of the big differences, I think, if you compare it to those players. Bart?

Yes. So yes, we of course have a very good relation with our customers. We also have a fantastic customer experience with -- from the consumers, sorry. And we're actually investing quite a lot to continue to build on that, both to get to know them, but also to drive the engagement with them, but also to deliver an even better experience to them. And that's the way we'll actually also solidify this relation. So as I pointed out, for example, we now have this app. We have 7 million of them. 6.2 million accounts are sitting behind that. Quite some of those are really very, very well validated. We will -- to actually drive kind of continuous engagement on this app between us and our consumers so that we strengthen this relationship. It's -- I use always the example. It's a little bit like when you're in home alarm, your challenge is actually to shift out -- or to make sure that people actually arm their alarms. The moment you actually add climate control and that kind of things, and app to your alarm system, actually, consumers start actually using -- start using the app and actually start interacting with you all the day because they actually check their climate control or the air quality and so forth. And at this moment, you're in this continuous dialogue which strengthens continuously kind of the relation, but at the same time, also allows you to capture more and more data, learn and learn more and more from them, yes, which actually allows you again to do many things to their benefit. That's actually something we focus on quite a lot. We have something which is called our one central consumer view, in which you're actually building up all these knowledge so that we can also deliver kind of very personalized experiences to these consumers. When you come to the PostNL website as a consumer, you actually get, at this moment, a personalized experience already.

Andre, does that answer your question?

Yes.

[Operator Instructions] It's, I think, a good moment to speak -- to talk about the automated parcel machines. There's quite a lot of things in development going on with new companies entering the market, existing -- expanding abroad when it comes to this side of the delivery. I'm not sure whether to look to you, Renée, or to you, Bart. But can you answer the question?

Sure.

Yes. That's fine.

Yes. Of course, there's also a lot of innovation on that front. As we've seen all the announcements, there are also all the announcements that are in the Dutch market, even. Yes, technology makes, again, many things possible on the delivery side and in the last mile. At the moment, we are -- and as I pointed out, we already have 8% self-service in our last mile, both kind of in last mile, but also our retail. We're actually also investing on that and actually evolving our last mile, and we actually have a broad range of things that we're doing there. For example, on the individual level, we will have actually the individual parcel lockers that Renée mentioned that can complete -- that we again can combine and which we can make smart together with all the delivery options. But we're also looking kind of a different APM. So us, we already have APMs in the market, but we're also looking at different variants. We have a very big, the Cleveron that we're actually at the moment testing also in Utrecht, as one example. We're looking also to scale up the more traditional APMs. And then from a retail side, from the self-service side, of course there, we also have a lot of things going on and a lot of pilots. Personally, I think the landscape will evolve, like in every market, especially when you look like to the Polish market, how it looks there. But it will be a function of actually -- how actually the geography looks like and what will be the competition.

We got a follow-up question online, which is, how do you expect the economics of the safe box or the investments around them to work? Also towards clients? If you understand what I mean.

To customers, you mean?

So we have to make investments to create the safe box project and to make sure that, that is one more option that we deliver. One investor asks, how does that work in terms of economies?

Marcel, as you know, do you want to?

Yes. What we try to achieve, and that's always a balance, is to see in what kind of areas you can have an APM and where the -- we make expectations out of our data. We know how much time it takes before an APM is economically viable. So if you look into the data, then we know in which areas we can put an APM and after how many months it will be economically viable. So out of that perspective, you can make a business case for the APMs and also the areas where you put those APMs. So this is the economical perspective. Next to the economical perspective, you also have the customer experience, strategic investment, of course, where we see that customers really want to have an APM in their neighborhood. But we have made the business cases based on the area, the drop rates and how -- and the customer preferences to see where the APMs are economically viable.

That's actually a nice bridge, segue to a next question for Renée. The solution that you have presented of delivery preferences, how does it impact the time it takes for the deliverer to deliver the package? And also how does it impact drop duplication and the hit rate?

Thank you. Well, let's start with time the deliverer spends at the door. That depends on the option chosen, right? So for a safe place, most we find, from our first results, that the most safe places are really close to the front door. So it doesn't take too much time extra to deliver the parcel. Actually, it takes less time than the delivery at the neighbors. And we see that, well, 24% of the people have chosen safe place, that mainly saves us time because those parcels would normally, most likely, have come to a retail location. So that takes, obviously, more time to deliver. How does it impact our hit rate? Well, if people are not at home, they probably still won't be at home, but they've set their delivery preferences. So maybe we could say that all parcels delivered in a safe place count as a first-time right, a hit rate parcel. So then in that sense, we would increase hit rate as well and drop the duplication. While for home delivery, not so much. But for all parcels that are rerouted to a retail location, yes, we will increase the drop duplication even more if we, after the COVID-19 crisis and our retailers have more capacity, introduce the standard preferences straight to a PostNL location. All those parcels, we won't have in their normal -- we won't put them in the normal delivery routes, but send them straight to a PostNL location. So many operational advantages.

You talked about COVID-19 and its impact, Bart. A question to you. When looking at everything digital, things were moving fast already. But if we've learned one thing in the last 12 to 14 months, is that they could be sped up easily, even further as a result of the pandemic. If you look at what happened, how do you reflect on the progress that has been made in general, but also specifically at PostNL?

Yes. So this is not specific to our industry, but the adoption of digital has actually just been massively pushed forward in the past year due to COVID, also with us. And we've seen that both in the interactions, the shift to digital sales, digital service and so forth. But we also have seen it more in the operations. We also have actually had to deal with much more, higher unpredictable peaks sometimes. So we also have had to, yes, on the short term, leverage actually all our data analytics to the max to actually to be able to deal with it. So it also has been a very good exercise in actually seeing how far can we actually push our operational model and to which extent can we actually leverage all the technology and digital technology that we have today to actually improve our operations when there's actually enormous volumes.

Thank you. We have no further questions at this stage. We are going to organize more deep dives focused on Digital Next, but also on other topics. For instance, ESG more specifically, our efforts to improve the environmental metrics of PostNL. This is for the second half of the year. And we also hope to invite you, if possible, face-to-face, let's hope so, to welcome you to the Netherlands, where we are working hard to open the first small parcel sorting center, a fairly new and innovative approach to sorting parcels with shoebox size, which will allow us to increase our capacity by many folds. I would like to thank you for taking the time to be with us here and for taking questions. We would welcome your feedback on this deep dive, so we will send you a quick survey to collect your comments. And as said, the presentations and the replay of this event will be made available through our website. If you have any further questions, please don't hesitate to contact the IR team at PostNL. Thank you very much, and see you next time.