Article: Who will be handling your mail in 2003?
Who'll be handling your mail in 2003 – An scanned article from Direct Marketing Association, May 2001
THERE WAS a time when dealing with the post in the UK was a simple affair.
There were few competitors, few options, limited customer service and you paid the asking rate because not many of us had the knowledge to do otherwise.
With the appointment of the new industry regulator, Postcomm, bringing with it new licensing regulation and impartial marketplace development, the mail delivery industry stands on the brink of change not seen since the introduction of Oftel in 1984. I am sure there are few people who would not agree that in the other utilities choice has improved. Nowadays you can buy your electricity from the gas board, your phone calls from the electricity board and postage through the Internet. Customer service has come on in leaps and bounds and in real terms prices have reduced. I use the term other because in reality the postal service is another utility which we use like a light switch. Nobody thinks twice about whether a light comes on at the press of a button. How many ever consider the intricacies of a postal service? The forthcoming deregulation of the UK postal market will change all this. People will wake up to the potential of choice and we can look forward to an era when nothing will stay quite the same.
So how will this affect the UK domestic market? Look around you. Maybe some of you are still thinking about the light bulb, maybe some of you are wondering when you can buy a mailing campaign through BT! Some may speculate on the likelihood of foreign operators preparing for an assault on the domestic market in 2003. I think this is unlikely. The reality is that the Post Office, recently rebranded to Consignia Plc to make them a more marketable global proposition, is one of the most reliable operators in the world. As it stands, there are no postal operators able to offer an alternative to Royal Mail for national marketing campaigns. At the same time, the distribution options for publishers of magazines and journals are limited. lt takes time for any major sector to reinvent itself. lt took the telecommunications sector ten years before true and viable competition to BT started to establish itself and even today BT holds the lion's share of the revenues and margins.
Power held
DESPITE GOVERNMENT protestations in favour of liberating the postal services market, the Royal Mail has yet to experience any real blow to its power Hopes for reductions in the weight limit permitted to be carried by private operators to reasonable levels were dashed recently in Europe and will stay over the 100 gram per item mark for the foreseeable future.The public sector argument is that huge job losses will follow and the universal service obligation (USO) provided by the Post Office would be compromised. Actually this need not be the case, as has been proved in countries, such as Sweden, where national deregulation has resulted in greater competition, without loss of service.
Undoubtedly jobs in the public sector will be lost, and will continue to be, as working practices improve and competition intensifies. Some of these jobs, however; will be recreated in the private sector; resulting in a healthy evolution, without which everything stagnates.
Hopefully it won't be as long as ten years before some of the 'new kids on the block' develop their service proposition and evolve a credible alternative to Royal Mail for your national mailing campaigns or your magazine distribution. In fact, the last couple of years have seen some of the main European post offices making inroads into the market and establishing themselves as entry points to their home markets and further afield.
TNT was the first foreign Post Office to introduce itself as an alternative international mailing service to post offices around the world. At first it was viewed with scepticism, criticism and legal action from incumbents, desperate to protect pristinely profrtable monopolies dating back hundreds of years. Now, twenty years on, there is a myriad of choice for your overseas mailing campaigns or distribution needs.
I believe TNT was instrumental in opening up opportunities for some of the biggest sectors that we see today in print I publishing and consolidation. Without our competitive influence, the Printflow and Airstream solutions, that have evolved to service your Sorted and Unsorted business needs would never have developed. Today the commoditisation of the export market is complete. Service levels are better than they've ever been and are cheaper; in real terms, than five, ten and fifteen years ago. You might want to print your mailing in the target country in the local language and distribute directly You might want to offer your target group the option to buy your product or subscription in a local currency or perhaps you just want to clean your database against the latest postcode address file. All of these services are available now.
Through aggressive expansion plans, innovation and change, the Dutch Post Office rose to become one of the largest PTTs in the world with a national population of just 16 million. We would love to be the only thorn in the side of Royal Mail, but it would be unreasonable not to expect others to share this ambition.
Meanwhile, the creation of larger and more sophisticated alternative distribution networks is affecting traditional modes of postal delivery The chances are that by 2005 there will be only a few super PTTs left; all the rest will be part of, or strategic partners to, these global superpowers in the postal marketThis could be seen as a retrograde step, but I view the current climate of acquisition throughout the DM chain as only a positive one. All potential areas of supporting clients needs are being attended to with big business plans and even bigger budgets. Differentiation is now the key Excellent customer service, innovative products and personalised account management are now the new gods. Not that relative speed and cost are forgotten. It is just that these new enhancements must be there to attract and maintain the most fiercely fought over business.
What should you expect? Well, as a minimum, choice. Choice offered by partners with global experience, keen to impress with dedicated products and support. Competition always drives up service levels, removes complacency (where it and road tests the honesty of the market rate. My advice, ally yourself with those that know what they're doing and hang on for the ride.
