Editor's Blog Section

From Opinion column issue 53 – Autumn 2009

Almost all home shopping is delivered by parcels carriers or mail services. Carriers are the lifeblood of this entire retail sector. Some are even involved in two-man deliveries (Nightfreight, for instance).

No wonder, then, that the Royal Mail workers’ strike action has sent shudders through the e-retail market. The concern is not so much over short-term delivery problems (worrying though these are), but rather over the potential loss of confidence among shoppers afraid to buy in case their goods will fail to arrive.

Figures from IMRG, the online retail organisation, underline this. In a poll of members, an alarming 77 per cent said they believed a strike would discourage consumers from shopping online this Christmas.

Its impact is not limited to Royal Mail’s own customers. As John Coghlan, chief executive of private express and mail carrier DX, commented when the dispute was looming: “The financial health of Royal Mail is important to us all. The size of the whole market is linked to Royal Mail. They are a major gorilla in the market.”

Jonathan Middleton, head of group development and integration at UK Mail, made a similar comment to us. “The dispute is not good for us or our customers. It’s damaging to the home shopping medium as a whole.”

Some online retailers have reassured customers that deliveries won’t be affected (Amazon, for instance), but not all are fortunate enough to be able to switch supplier; the capacity just isn’t there in the market.

Like all disputes, this one will be resolved in the end, but it will leave a lot of e-retailers reeling from the impact. Seldom has an entire retail sector been so reliant on one single transport operator, and few in the industry will want to find themselves at such risk again. Many retailers will be determined not to rely on Royal Mail any longer.

Welcome though this may be for rivals, it’s hard to see it as a reason for celebration. Perhaps the one positive to emerge will be that all carriers, Royal Mail and others, will place even more attention on service delivery in their drive to attract customers and sustain the direct shopping sector. The pressure will be on.