The new GDPR regulations due to launch in the UK at the end of this week could have a negative effect on Royal Mail revenues, according to reports that have been broadly agreed with by Royal Mail executives. Specifically, the letters revenue they get from targeted snail mail could well be impacted negatively by the new regulations that give consumers and recipients more rights.
The new rules mean that the penalties are much stiffer if businesses and organisations contact people by digital and other means, such as direct mail through the post, than before if they are found to be in breach of GDPR. And the concern for Royal Mail seems to be that businesses will be scaling back direct marketing, perhaps only in the short term, as they determine whether they are compliant.
There is a risk that some of our customers will reduce volumes of marketing mail as they get themselves into a state of compliance with the regulations.
– Moya Greene, CEO, Royal Mail
Ever since the advent of email, and in a situation that has deteriorated over time, people are sending fewer letters. That is hardly a surprise and a trend that has been true for 20 years. So, increasingly, the letters division of Royal Mail has relied on institutional customers such as banks and utilities, and also marketing firms, to keep it going. The new data protection rules though, it would seem, mean that commercial marketers are going to be more cautious about using their lists because they could be subject to harsher penalties if they are found in breach.
What should be predominantly be of worry to ecommerce merchants is the fact that Royal Mail is going to rely more heavily on revenues from parcels from ecommerce in the years to come and that could be more expensive to merchants. And it is also worth remarking on the recent disharmony at Royal Mail which was very much focussed on letters when the the future of Royal Mail revenues is so clearly centred elsewhere.
