I was interested to read last month that Royal Mail has announced a year-on-year profits fall of around 21%, and one of the main reasons cited for this is the entry of Amazon into the parcel delivery business. Not only has Amazon taken away custom from Royal Mail (it was one of its largest clients), it has also set up as a delivery business in its own right and become a competitor, grabbing 2-3% of the UK parcel market in as many months.
The rapid growth of online shopping had seemed like a great opportunity for Royal Mail, but like most monopoly markets where competition is introduced, it has seen its projections plummet faster than a parcel labelled ‘Fragile’ falls off the back of one of its lorries.
This week I have been at a conference listening to the future of retail, and in particular the needs of the youth of today, also knowns as millennials. What they want is personalisation – they want to shop the way they live – 100% connected – and want to do everything online that they can in a physical store, and vice versa. Retailers should know who they are, and should change their business models to fit their lives – being available whenever or wherever they want them.
Some great examples referred to include Jeansonline, where the delivery driver waits for 15 minutes after delivering a purchase to see whether there is anything to return; and Volvo, which is running a pilot scheme where the car owner texts the location of their Volvo, and a temporary keycode, and the delivery driver puts their goods in the boot while they are at work.
Another example is Doddle – a recently formed joint venture with Network Rail, which intends to open 300 parcel collection points at railway stations across the country. It will give customers easy access to their online purchases, retailers a cheap delivery system (redelivery is expensive), all linked to railway stations that are generally well signposted, with plenty of car parking spaces, assuming customers are not already passing through on their way home.
The speed that some of these initiatives are coming to market is both exciting and frightening for us marketers.
Developing the new products is great fun, but reacting to a competitor move can be incredibly frustrating, which I am sure the board of Royal Mail are finding out right now.