What is the real cost of strike action?
As the dust settles on the piles of undelivered mail sitting in sorting offices nationwide following the first of what could be a series of national strikes last week, many have turned their attention to assessing the potential financial cost of the dispute.
The DMA this week estimated the cost to business of lost, postponed or cancelled direct mail campaigns could total £10m, while others have put the total bill at £1.5bn.
Direct marketers have also been queuing up to issue the Royal Mail with dire warnings about its future.
Advertiser body ISBA said companies could move their business away permanently and turn from direct mail to email as a consequence of strike action.
Robert Keitch, chief of membership and brand at the DMA recently warned that the strikes “will only serve to undermine the commercial value of post as a means of doing business”.
As cheerleader-in-chief for and a major producer of direct mail, the Royal Mail needs to be alert to warnings from such an informed sources.
Further food for thought came from shadow business secretary Kenneth Clarke, who, perhaps sensing a political opportunity to appear as a tough-talking decision maker, revealed the Tories would move quickly to privatise the service if elected next May. Indeed, to this end he said that “private, confidential meetings” had already been had with potential suitors.
So, has strike action irretrievably dented the long-term prospects of direct mail as a marketing channel, as some are suggesting? And has it hastened the fundamental change to the structure of UK mail services a sell-off would undoubtedly cause?
With regards to the former, the worst case scenario is far from being reached but even before the strike action, the new digital world meant the Royal Mail was already handling 10% less mail each year as the use of email and the internet grows. The strike action will only accelerate this shift.
And although Clarke’s hard-hitting words will be interpreted by some as political posturing timed to win over wavering voters, the frustration caused by the strikes could be well harden the Tories’ resolve to succeed where the Government failed in July and find a private investor.
