Consignia goes online to save post offices: Geoffrey Spiteri
Troubled group is fighting to stop the tide of retrenchment, writes
Geoffrey Spiteri
Consignia, formerly the Post Office, is turning to online shopping to
save its troubled rural postal network.
Faced with declining market share and competition from increased email
and internet use, the distribution group was forced to close a record 547
local post offices last year. The organisation has also said it will have to
cut 2,100 administrative jobs as part of its cost-cutting strategy.
Now, in an effort to increase customer traffic at local branches,
online shoppers using Consignia's worldofshopping.com website will be given
the option of nominating a local post office as an alternative delivery
address.
In trials of the scheme in the West Country, 75 per cent of customers
who entered post offices were there specifically to collect online purchases.
The good news for post masters and post mistresses struggling to keep their
businesses afloat is that they will be paid a small, set fee for each package
they handle. The good news for Consignia is that it will benefit from a cut in
the number of expensive failed deliveries.
Under the present system, undelivered packages are returned to one of
1,500 post office depots nationwide, to be claimed by the customer or
redelivered to the same address. With the new scheme there will be fewer
redeliveries, and packages will be sent directly to post offices, where
customers will be able to take advantage of later opening hours to reclaim
them at their leisure.
In addition to Consignia's online worldofshopping.com, three other
independent retailers, including Pinault Printemps Redoute's mail-order
division, Redcats, have signed up to the scheme. It is hoped that by the end
of the year a further 200 will help.
David Taylor, managing director of home shopping at Consignia, said:
"The key factors restraining the growth in online home shopping have been the
perceived lack of security on the internet, difficult website navigation and
problems with delivery.
"We aim to improve the latter by widening choice for the consumer and
improving the delivery experience."
The announcement of the initiative follows Friday's publication of a
report by Merrill Lynch showing the value of online shopping in the UK to have
doubled from just over $3bn in 2000 to more than $6bn in 2001, with the UK
accounting for 36 per cent of total online shopping in Europe.
Peter Bradshaw, head of European internet research at Merrill Lynch,
said the comparative success of e-commerce in the UK could be attributed to
Post Office efficiency. "On a relative basis, the UK's Post Office clocks the
opposition.," he said. "A typical delivery in Italy or the US might take up to
two weeks. In the UK, a typical delivery takes two days."
Despite the praise, Consignia has not had an easy ride since its
rebranding in March. In the past year, an estimated 62,000 working days were
lost to strikes, and a planned 1p increase on the cost of first- and second-
class stamps, a move which would have netted an extra pounds 96m a year for
the company, was withdrawn.
Competition from internet and e-mail services was blamed by Consignia
for a decline in pre-tax earnings of pounds 371m in the year to March 2001.
The decline looks as though it will continue, with the breaking up of
the company's monopoly later this year.
Caption: All change: Consignia is the new name, but using the web is
the new game
Copyright: Independent Newspapers(UK) Limited
INDEPENDENT ON SUNDAY, 15th July 2001
