Ecommerce could save Royal Mail given the chance

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Let’s start with some facts. Royal Mail letter volumes are greatly diminished in recent years and that has put them under pressure because they simply aren’t making the money they used to from stamps. Emails and text messages have seen to that too. We used to pen a missive to friends and family but no more. We, the people of Britain, just don’t lick a stamp and post a letter anymore. And that isn’t gonna change any time soon.

But we do send more parcels. Hello ecommerce. The advent of online trading has seen us Brits send more larger items in the post. But we don’t just use our national postal service in the same way, in part thanks to greater choice, we used to and now Royal Mail must be profitable. Privatisation heralded a new era that requires returns. There’s no going back.

And yet it does seem that Royal Mail is somewhat suicidal when confronted with a trend so new it’s been blindingly obvious for way more than a decade. Amazon innovates and leads the charge. Drone delivery may be pie in the sky (ahem) but evening delivery is real already. And you can get Saturday and Sunday deliveries from numerous carriers as normal already. Royal Mail isn’t even considering evenings, let alone Sundays for shame.

No such concerns were central to recent union threats in angry negotiations over potential strikes. Our beloved posties should have been arguing for the freedom, and associated renumeration, to work every weekend and fighting for evening and Sunday deliveries. But the concerns of the CWU were firmly embedded in the 20th century,

It’s said that Moya Greene, the current CEO of Royal Mail, will be moving on and replaced in 2018. We wish her well. But a change at the top table won’t save Royal Mail. A complete and radical reimagination of the business is required urgently. But is that even a possibility? Tamebay isn’t optimistic.

And make no mistake, we are talking about a much loved national institution that we want to prosper and succeed. Royal Mail is amazing and successful when it seeks to be.

The universal service which means a first class stamp will carry the same item between Epson and Ealing and also the Isle of Wight and the Isle of Skye for the same price. That facility is too important to lose. Indeed, it’s a vital article of national pride alongside HMQ, the BBC and yorkshire puddings. The UK would be worse off without the Royal Mail fighting fierce.

But modernisation is vital. Many RM people I meet smugly nod that Amazon is their biggest client. That is doubtless true. But Amazon (not other couriers) is also Royal Mail’s biggest competitor. Amazon is a fulfilment company that is building out its delivery network at a rate of knots every week. And the sooner that everyone acknowledges that, the better. The Royal Mail should fear Amazon.

7 Responses

  1. Royal Mail think they are too big for e-commerce.

    Collection times are on their terms not the terms of the marketplace cut offs.

    Late deliveries affecting metrics are nothing to them.

    They need to seriously look at their operations and modernise to have a chance.

  2. The service they offer their ecommerece customers is so poor. The introduction of these £25 charges is stupid when no common sense is used with them.

    I’m afraid Royal Mail is dragged down by being originaly Goverment owned and like any business with this problem is often carrying staff who think they are entitled to everything without having to really work hard for it, there is often a district lake of drive and enthusiasm from the people I’ve had contact with.

    It will eventually be broken up I’m sure.

  3. Don’t write off letters too quickly. Direct Mail is still very effective and even the most technology focused businesses are finding that it achieves cut through levels to audiences that are swamped with digital advertisements. The best ecommerce companies use it very well and many are investing more in both Direct Mail and printed catalogue. IKEA did a cracking ad on this subject last year.

  4. Royal Mail is in a very, very positive place. Profits are up. Pensions and pay sorted. Share price very good. Royal Mail are a business now, not a service. So cost cutting will mean the business is streamlined. So unless you are willing to pay premium rates, don’t except premium service.

  5. As a postman for 15 years my feeling is that Royal Mail are stuck in the dark ages and are very badly run from top to bottom and that’s not going to change very soon!

  6. “RM people I meet smugly nod that Amazon is their biggest client”. These will be the people that will be stopping RMG from innovating and modernising, the very people who have held RMG back since it went private. These are the people RMG want to get shot off and quick smart also.
    Amazon only look after Amazon, and while it is an important client, their is so much more scope away from Amazon.
    RMG have WHAT everyone else wants a true National Network in place. They could even open up a marketplace is the so chose I suppose as they have the most important thing already “the logistics”… place.
    Am not saying they need to deliver on a Sunday (kinda suits us they dont we all need some time off)…but evenings should be a must by now, lockers like Amazon, etc….
    One of the reasons I spent so much of my money in their shares as I thought it was a no-brainer with the growth of e-commerce. Sadly they have never moved with the times and like so many think in the short term and have no real plan for the future. Am glad Moya is now going but really wish they had brought in a new face.


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