AUSTRALIA Post is looking to ride the e-commerce wave and expand the portfolio of services sold at post offices, according to chairman David Mortimer.
However, in an interview with The Australian, he said the company would also need to step up its investment in the parcel delivery business to keep up with the needs of today's more demanding consumers.
While Australia Post has suffered from a sharp drop off in letter delivery with the rise of email, it is enjoying a strong upsurge in its parcels business with the growth of online shopping in Australia.
"Seventy per cent of our parcel business is generated through e-commerce," Mr Mortimer said.
"The increase has been quite dramatic. It is a completely different way of doing business. The parcel business is growing quite rapidly, which means you have capacity issues to deal with.
"We have got to adjust the structure of the business, which is being done at this very moment."
Mr Mortimer said consumers were far more demanding these days, especially with fewer people at home during the day to receive parcel deliveries.
New services have included longer trading hours over the Christmas period for many post offices and the creation of super stores.
The first super store opened in November in Brisbane, with dedicated lockers so parcels can be picked up at any time.
The new stores have vending machines for postage and packing services as well as ATMs.
New services include sending customers SMS messages when parcels are delivered and the trial of drive-in facilities for picking up parcels.
Australia Post's pre-tax profit jumped from $253 million to $332m last financial year, before restructuring provisions. This followed a rise in the price of stamps as well as a stronger performance in the parcels business.
Mr Mortimer said the letters business in Australia had been contracting "a little more than we would have expected".
"We have got to adjust the structure of the business for that," he said.
Australia Post chief executive Ahmed Fahour, opening the Brisbane super store last month, said the internet was the core business's worst enemy. "It's destroying letter writing," he said.
"But it's also my best friend because more and more Australians are shopping online, and we can deliver the parcels."
Mr Mortimer said Australia was establishing 100,000 new homes a year that had to be serviced by Australia Post while the total number of letters being delivered was falling, making the business much less viable.
"The arithmetic is fairly clear," he said. "You are not going to make money out of letters."
And so Australia Post was looking at a series of concepts to make it easier for people to receive parcels.
"You might want to receive parcels at the office or at home at a certain time of day," he said.
Mr Mortimer said he wanted to see more services made available in post offices to help its licensees grow their revenue base.
Australia Post recently expanded its services to include travel insurance and banking products.
The super stores also have foreign exchange and travel advisory services and online shopping facilities.
"We need to get more product through the retail stores so that our licensees can make a satisfactory return," he said.
"That is why we have offered some financial services and we have reached agreements with some of the banks to distribute some of their products."
But Mr Mortimer said the Post Office did not want to expand into direct banking services.
"We will never be a banker," he said. "We don't have the resources and we don't have the trained people to do banking business. We will simply be an agent."
He said consumers in Brisbane could have done all their Christmas shopping online at the new super store.
"The reality is that online purchasing is just going to continue to grow exponentially," he said. "We have no choice but to be part of it."
Mr Mortimer said Mr Fahour, who took over the top job two years ago, was "driving the e-commerce very effectively".
"He is a good chief executive and there is still a lot to do with the business," he said.
"I think he is enjoying it. He is doing a wonderful job and we hope he is there for a long while."
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