Royal Mail anticipates e-commerce growth thanks to superfast broadband rollout
Royal Mail believes the expansion of superfast broadband in the UK could add more than half a billion pounds to the nation’s e-commerce sales. The company’s research suggests that Britain’s spending on online shopping has already grown by £225m since superfast broadband arrived, equivalent to a £23 a year or 3.1% increase per superfast broadband user.
So far, about 73% of the UK population has access to superfast broadband.
But, further expansion of the super fast broadband network could add a further £515m a year in online sales, once it reaches 90-95% of the population by 2017.
The analysis carried out by the Centre for Economic and Business Research suggested that consumers in Scotland and Wales have increased their e-commerce spending most since receiving superfast broadband, respectively by 5.5% and 4.4%.
Royal Mail said since more of the population in Scotland and Wales live further from brick-and-mortar shopping, internet shopping is seen as more convenient.
Nick Landon, the managing director of Royal Mail Parcels, said superfast broadband was proving a “catalyst” encouraging people to spend more online.
“To support the online retailing market, Royal Mail is continuing to explore ways to improve our flexibility and provide more options for people to receive items they have ordered online,” he said.
“At the end of June our express parcels business, Parcelforce Worldwide, began delivering seven days a week when it launched Sunday deliveries. Royal Mail is to pilot Sunday afternoon opening at around 100 of its delivery offices across the UK. Royal Mail will also trial Sunday parcel deliveries later this summer to addresses within the M25 motorway.”
UK e-commerce industry body IMRG says online shopping is growing by about 16% a year at the moment, despite a “disappointing” summer.
Royal Mail has struggled recently to translate this continuing growth into an uplift for its parcel revenues, with its performance impacted by the intense competition in the UK parcel industry, the introduction by e-commerce giant Amazon of its own delivery services, as well as lingering effects of last year’s introduction of size-based parcel pricing.
