Ofcom Communications Market Report: Letter volumes down but people still value postal service
In its latest Communications Market Report, published today (3 August), the UK regulator Ofcom has noted that although the total addressed letters volumes fell by 4% between 2015 and 2016 to 11.8bn items, nearly nine in ten people (88%) said that they value the option to be able to use the postal service. Ofcom said that the decline in letter volumes “was driven by a 9% decline in Royal Mail’s end-to end letter volume, to 4.7bn items, which accounted for 40% of total letter volumes in 2016”.
And, as one would expect, the postal service was most prized by the older generation. Around 82% of 16-24s said they valued being able to use the post, and this rose to 85% among 25-44s; 91% from the 45-64s; 93% for the 65-74s and 97% among the over 75s.
Other key metrics in the report included the statistic that letter volumes delivered by operators other than Royal Mail have risen from 9m in 2011 to 16m in 2016; and the direct mail share of total advertising spend has declined from 11.4% to 8.0%.
The report noted that the total domestic parcel volume in 2015 – the only year for which it gave a figure – was 1.6bn.
In its analysis of the UK’s parcel market, Ofcom noted: “Online activity continues to drive developments in e-commerce and delivery networks.”
Ofcom added that “price is the consumer’s main concern”, with more than 50% of online shoppers not completing orders online because “delivery charges were too high”.
While most people still say that their first preference is for home delivery, about half have used a click and collect service to pick up their order in a store. Twelve per cent said they had had a purchase delivered to a parcel shop, 11% to a post office, and 6% said they had had a delivery made to a parcel locker.
UK consumers are now more aware of faster delivery options and Ofcom commented: “More than half (55%) of adults have used next day delivery, 14% have used same-day delivery, and 4% have used within-the-hour delivery.”
But – as many independent reports have also flagged up – consumers are often more interested in free, or at least cheap, delivery, than they are in fast delivery. According to Ofcom: “The relatively limited use of same-day and within-the-hour delivery may also reflect consumers’ unwillingness to pay a premium for delivery.”
On page 224 of the report, Ofcom relayed the findings of a survey in which adults who had received one or more parcels in the past month were provided with a list of companies and asked from which of these they had received a parcel delivery.
Ofcom said: “More than eight in ten (83%) said that Royal Mail had delivered a parcel(s) to them, while just over a quarter (27%) had received one or more from Hermes. A further five companies had delivered a parcel(s) to between 10% and 20% of those who had received one: Yodel (19%), Amazon Logistics (17%), DPD (16%), Parcelforce (13%) and DHL (12%).”