Autumn 2009

The industrial action at Royal Mail by the Communication Workers Union has cast a long shadow over the home shopping market.

Business Secretary Peter Mandelson's comments during the days prior to the first strike day summed up much of the feeling throughout the industry. 'Candidly, I think it is suicidal. Taking industrial action will not resolve this dispute. It will only serve to drive more customers away from Royal Mail.'

IMRG, the online retailer's association, found this opinion echoed in a poll of its members. No fewer than 77 per cent feared that a strike would discourage consumers from shopping online this Christmas: and this at a time when the home shopping market has been climbing back from a recession-induced dip (see story elsewhere on this page).

James Roper, IMRG's chief executive, commented: 'With mail volumes diminishing, you might expect the postal union to appreciate the huge opportunity that the e-retail industry is trying to give to Royal Mail.' IMRG says sales expectations for the fourth quarter 2009, if in line with current year-on-year growth figures, would be £15.5 billion.

 

According to data from the Centre for Economics and Business Research, assembled on behalf of shopping comparison service Kelkoo, the cost of a strike to retailers could amount to £270 million (compared with £50 million for high street retailers).

Significantly, Kelkoo found that 94 per cent of shoppers would be unlikely to place further orders with a retailer that failed to deliver. 'The timing of the strike beggars belief,' commented Kelkoo UK managing director Bruce Fair.

Not surprisingly, those retailers that could do so were quick to put contingency delivery plans in place. John Lewis, for instance, declared that it would switch carriers during the strikes to avoid delays on its delivery services, and confidently predicted: 'We have ensured that postal strikes don't affect our customers.'

This company is one of a growing number that use the MetaPack delivery management system to allocate consignments intelligently to appropriate parcels carriers. However, even MetaPack chief executive Patrick Wall has pointed out that not all retailers can simply switch carriers in this way. 'There simply isn't enough capacity in the market.'

Others in the delivery market have also taken the opportunity to point customers in their direction. For instance, Collect+, the new high-street drop-off service jointly owned by Home Delivery Network and PayPoint, emailed potential customers with a 'beat the strikes' message; and HDN itself brought forward the formal announcement of a new sub-2kg service to rival Royal Mail's second-class packet delivery.