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Figure 6.1
UK postal services industry 2006 2007 2008 2009 2010 2011 2012
Addressed mail volumes 22.0bn 21.6bn 20.6bn 18.6bn 17.5bn 16.6bn 15.7bn
Addressed mail revenues £6.8bn £6.8bn £6.8bn £6.6bn £6.5bn £6.7bn £7.2bn
Proportion of access mail in total mail 9.6% 16.9% 24.6% 32.7% 39.9% 43.6% 46.0%
Value of UK e-retail market £30.2bn £35.2bn £43.8bn £49.8bn £58.8bn £68.0bn £78.2bn
Source: Royal Mail Regulatory Financial Statements, Royal Mail Wholesale, Royal Mail Group Annual Reports. Revenue figures are nominal. Note: Addressed mail volumes and revenues include Royal Mail total mails (excluding Parcelforce and unaddressed), access revenues and end-to-end delivered addressed letter mail. This does not include courier or express volumes and revenues. Royal Mail calendar year volume and revenue figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and estimates of 2011-12 performance informed by Royal Mail’s Report and Accounts and are therefore not directly comparable with Royal Mail’s published accounts. .
UK postal industry key metrics
Figure 6.2
2
Products or services bought online in the past six months
% Bought online
Source: Kantar Media Omnibus , March 2013 Base: All who use online shopping in the UK (N=1221) Q.10A: Which products or services have you bought online in the last 6 months?
5% 6%
15% 18%
22% 26% 27%
30% 32% 33%
38% 39%
44% 59%
0% 10% 20% 30% 40% 50% 60% 70%
Big value items e.g car/home Financial products New utility supplier
New furniture Household devices
Online groceries or takeaway food Digital multimedia
Electrical devices e.g.TV/stereos Car/home/travel insurance
Cinema/theatre tickets Transport
Hotel/holiday bookings Physical mutlitmedia Clothing or footwear
Figure 6.3
3
8% 9% 9%
12% 14% 15%
25% 30%
36% 38%
41% 54%
0% 10% 20% 30% 40% 50% 60%
Recommendation from newspaper/magazine Delivery provider
Recommendation from website Official/ quality looking site
Website predominantly listed on search page Have seen produict/service in shop
Comparison sites Delivery options
Recommendation from friends/family/colleagues Cheapest site for service / product
Security of site Well know or reputable sites/brands
Factors that influence choice of online vendor
% influenced by factor
Source: Kantar Media Omnibus Base: All who use online shopping in the UK (N=1221) Q.10B: And when buying these products online, which factors influence your decision of which website to buy these from?
Figure 6.4
4
40%
25%
11% 6% 6%
3% 1% 0%
10%
20%
30%
40%
50%
Any delivery concerns
Delivery costs too
high
Not be at home to receive delivery
Item too valuable to
send by post
Delivery not available in
area
Did not want to use
particular provider
Would take too long to
be delivered
Delivery concerns preventing online purchasing
% Reason concerned by delivery
Source: Kantar Media Omnibus Base: All who use online shopping in the UK (N=1221) Q.14: Have delivery concerns ever prevented you from buying items online? If yes, which of the following reasons prevented you from shopping?
5
23%
4%
17%
11%
5% 3% 2% 0%
12%
2% 0% 0% 6%
3% 3% 3% 1% 2% 2% 0% 5%
10% 15% 20% 25%
Bette
r del
iver
y se
rvic
e
Sim
pler
retu
rns
proc
ess
Spee
d of
resp
onse
to
quer
ies
Con
tact
det
ails
eas
ier t
o fin
d
Live
cha
t ser
vice
UK
base
d ca
ll ce
ntre
Free
phon
e co
ntac
t nu
mbe
r
FAQ
's e
asie
r to
find
Mor
e pr
oduc
t inf
orm
atio
n
Show
sto
ck le
vels
Cus
tom
er re
view
s
Show
com
petit
or p
rices
Bette
r web
site
Secu
re w
ebsi
te
Low
er p
rices
Onl
ine
offe
rs
Bette
r loy
alty
sch
eme
Trai
n st
aff b
ette
r
Valu
e cu
stom
ers
Source: “Keeping your customers satisfied: The rise of online satisfaction “IMRG/eDigitalResearch, June 2013 Base: Online customers aged 16+ (n=1,660) Question: What one thing could retailers do to most improve their customer service?
Key improvement areas for online customers Proportion of respondents (%)
Delivery Customer service contact Information Website Price Other
Figure 6.5
6
Factors influencing choice of delivery method % Influenced by factor
3% 3%
6% 7%
13% 15%
25% 33%
38% 59%
0% 10% 20% 30% 40% 50% 60% 70%
Environmental factors Existing subscription to delivery service
Weekend delivery Specific delivery company
signed for delivery Delivery on a nominated day\time
Order tracking Speed of delivery
Cheapest delivery option Free delivery
Source: Kantar Media Omnibus Base: All who use online shopping in the UK (N=1221) Q.13: And which of the following factors influence your decision on which delivery method you choose? PROBE: Any others?
Figure 6.6
Figure 6.7
7
57%
40%
3%
Economy
Specified day (including next day)
Specified time
Source: Ofcom analysis of IMRG/Metapack Delivery Index, January – December 2012 Note: Specified time includes, AM, PM, Before 10am, Evening and School run; Specified day includes Same day and Next day. Proportions rebased to exclude International
Service types used for the fulfilment of e-retail, by proportion: 2012
8
90% 86% 91% 96%
4% 7% 3% 2% 4% 5% 4% 1%
Total 16-34 35-54 55+ 0%
20%
40%
60%
80%
100%
To post office To store Friends/families home Work Home
Where items bought online are ‘usually’ delivered % Delivered to
Source: Kantar Media Omnibus Base: All who use online shopping in the UK (N=1221) Q.12: When shopping online where do you usually get the items delivered to?
Figure 6.8
9
Consumer delivery decisions in online shopping Delivery decision tree after choosing to buy an item online
Item selected to buy
Choose delivery option
Cost Speed Convenience
Choose delivery destination
Home Work Friend / Family Store Other
Figure 6.9
6,843 6,764 6,661 6,517 6,704 7,185
6,755 6,653 6,522 6,371 6,551
7,022
6,254 5,922 5,601 5,281 5,279 5,569
501 731 921 1,090 1,272 1,453
88 112 140 142 150 157 0
2,000
4,000
6,000
8,000
2007 2008 2009 2010 2011 2012
Total mail
Royal Mail total mail Royal Mail end-to-end Royal Mail access
Access operators
10
Figure 6.10 Mail revenue: 2007 to 2012 Revenue (£m)
Source: Royal Mail Regulatory Financial Statements, operator returns to Ofcom, Ofcom estimates. Note: Royal Mail end-to-end refers to Royal Mail total mail revenues excepting access. Royal Mail calendar year revenue figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and estimates of 2012-13 performance informed by Royal Mail’s Report and Accounts and are therefore not directly comparable with Royal Mail’s published accounts. Addressed mail only. Figures are nominal.
21,587 20,553 18,632 17,527
16,657 15,675 17,946
15,489 12,528
10,519 9,502 8,444
3,641 5,064 6,092 6,996 7,147 7,213
0
5,000
10,000
15,000
20,000
25,000
2007 2008 2009 2010 2011 2012
Total mail
Royal Mail end-to-end
Total access
11
Figure 6.11
Mail volumes: 2007 to 2012
Volume (million items)
Source: Royal Mail Wholesale, Royal Mail Regulatory Financial Statements, Operators’ returns, Ofcom estimates Note: Royal Mail end-to-end refers to Royal Mail total mail volumes excepting access. Royal Mail calendar year volume figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and estimates of 2012-13 performance informed by Royal Mail’s Report and Accounts and are therefore not directly comparable with Royal Mail’s published accounts. Addressed mail only.
17% 25%
33% 40% 43% 46%
0%
10%
20%
30%
40%
50%
2007 2008 2009 2010 2011 2012
12
Figure 6.12
Proportion of access mail in total mail: 2007 to 2012
Proportion of access in total mail volume
Source: Royal Mail Wholesale, Royal Mail Regulatory Financial Statements, Operators’ returns, Ofcom estimates
Year on year growth rate of access volumes
71.8% 39.1% 20.3% 14.8% 2.2% 0.9%
Figure 6.13
13
88.2 87.7 81.3 80.1
11.3 11.7 16.3 16.8 0.5 0.7 2.4 3.3
0%
20%
40%
60%
80%
100%
2011 2012 2011 2012
Volume Revenue
Packet/A3 Large Letters Letters
Source: Royal Mail Wholesale, 2011-12 to 2012-13
Access volumes and Royal Mail’s access revenue, by format: 2011 to 2012 Proportion of format in total access mail (%)
Figure 6.14
14
11.8 11.3 8.5
18.0
0
5
10
15
20
2009 2010 2011 2012
Source: Operators’ returns
Other operators’ end-to-end delivered volumes: 2009 to 2012 Volume (million items)
Figure 6.15
15
34p 36p 39p 41p
46p
60p 60p
24p 27p
30p 32p 36p
50p 50p
0
20
40
60
2007 2008 2009 2010 2011 2012 2013
First Class Second Class
Source: Royal Mail. Figures are nominal.
First and Second Class stamp prices Price (p)
Figure 6.16
16
Source: Ofcom Residential Postal Tracker, Q3 2012-Q2 2013 Base: All respondents (n = 4844 16+, 1338 16-34, 1582 35-54, 1924 55+) QH2A-H. SHOWCARD - AGREEMENT WITH STATEMENTS ABOUT SENDING/ RECEIVING POST
Attitudes to sending / receiving post
Adults 16+
16-34 35-54 55+
I prefer to send letters or emails to companies rather than make a phone call so I have a written record 61% 62% 65% 56%
I trust second class post to get there in reasonable timeframe 59% 55% 56% 66%
I love to send and receive letters and cards 58% 52% 57% 67% I prefer to send emails rather than letters whenever possible 53% 68% 57% 33%
I would feel cut off from society if I can't send/don’t receive post 51% 41% 48% 63%
I only send mail first class if it needs to get there next day 50% 45% 48% 56%
I only use post if there is no alternative 44% 54% 41% 36% I send fewer letters due to cost 29% 25% 29% 33%
Proportion of all respondents agreeing with each statement % Ranked by adults 16+
Figure 6.17
17
18 26 14 15
22 28
21 16
18 18
17 18
25 20
27 29
9 5 11 12
6 3 9 8
0%
25%
50%
75%
100%
Adults 16+ 16-34 35-54 55+
Don't know
21+ items
11-20 items
5-10 items
3 or 4 items
1 or 2 items
None/ don't send mail
Source: Ofcom Residential Postal Tracker, Q3 2012-Q2 2013 Base: All respondents (n = 4844 16+, 1338 16-34, 1582 35-54, 1924 55+) QC1. Approximately how many items of post - including letters, cards and parcels - have you personally
sent in the last month?
Approximate number of items of post sent per month (including letters, cards and parcels)
Items of post sent per month (% of respondents) 7.0 7.8 8.7
Mean number of items sent per month 4.5
Figure 6.18
18
38
29 37
58
38
22
38
24 32
47 39
25
43
29 34
58
42
24
33 32
43
66
31
18
0
20
40
60
80
Formal letters Payments for bills Personal letters Invitations/greetings cards/postcards
Larger parcels Smaller parcels
Adults 16+ 16-34 35-54 55+
Source: Ofcom Residential Postal Tracker, Q3 2012-Q2 2013 Base: All who have personally sent any items of post in the last week (n = 3889 16+, 956 16-34, 1330 35-54, 1603 55+) QC5. Which of these types of mail would you say you have personally sent in the last month by post? (MULTICODE)
Type of post sent in the past month
Proportion of consumers (%) Net parcels: 16+ = 40% 16-34 = 42% 35-54 = 44% 55+ = 34%
Net letters: 16+ = 62% 16-34 = 61% 35-54 = 63% 55+ = 63%
Figure 6.19
19
-10%
0%
-12% -17% -20%
-10%
0%
10%
20%
Adults 16+ 16-34 35-54 55+
Source: Ofcom Residential Postal Tracker, Q3 2012-Q2 2013 Base: All respondents (n = 4844 16+, 1338 16-34, 1582 35-54, 1924 55+) QC10: Compared with two years ago, would you say that the number of items you send through the post has...increased greatly, increased slightly, stayed the same, decreased slightly, decreased greatly? Note: chart shows net percentage (% who claim their use has increased - % those who claim their use has decreased)
Net percentage of respondents reporting increasing or decreasing amount of post sent in the past two years
Figure 6.20
20
14 11
35 30
17 17
21 23
13 17 1 2
0%
25%
50%
75%
100%
First Class Stamp Second Class Stamp
Don't know
Very poor
Fairly poor
Neither good nor poor Fairly good
Very good
Source: Ofcom Residential Postal Tracker, Q3 2012-Q2 2013 Base: All respondents (n = 484416+) QF3/4. It currently costs 60p/50p to send a standard letter first /second class within the UK. How would you rate the Royal Mail's first/second class service in terms of value for money
Perceived value for money of First and Second Class stamps Value for money of First and Second Class stamp s(% of respondents)
40% Total who agree First or Second Stamps are good value for money
49%
Figure 6.21
21
8 12 5 7 16
24 10 14
17 20
16 16
34 29
40 34
18 12
22 21
6 3 7 8
0%
25%
50%
75%
100%
Adults 16+ 16-34 35-54 55+
Don't know
21+ items
11-20 items
5-10 items
3 or 4 items
1 or 2 items
None
Source: Ofcom Residential Postal Tracker, Q3 2012-Q2 2013 Base: All respondents (n = 4844 UK, 1338 16-34, 1582 35-54, 1924 55+) QD1. Approximately how many items of post - including letters, cards and parcels - have you personally received in the last week?
Approximate number of items of post received per month (including letters, cards and parcels)
Items of post received per month (% of respondents) 8.4 9.6 9.4
Mean number of items received per week 6.0
Figure 6.22
22
45 50 46
81
28 33 32
26 35
17
41 39 36
74
21 25 33 29 27
11
48 57
49
87
28 37 39
28
40
19
46 54 53
80
34 36
25 19
38
20
0
30
60
90
Letters from organisations you have a relationship
with
Standard circulars from organisations you have a relationship
with
Addressed direct mail from other
organisations
Bills/invoices/ statements
Personal letters
Invitations / greetings
cards
Larger parcels
Smaller parcels
Catalogues / brochures
Subscription magazines
Adults 16+ 16-34 35-54 55+
Source: Ofcom Residential Postal Tracker, Q3 2012-Q2 2013 Base: All respondents (n = 4844 UK, 1338 16-34, 1582 35-54, 1924 55+) QD4. SHOWCARD Please think about items that are addressed to you personally rather than leaflets or charity collection envelopes or bags that may come through your letterbox. Which of these types of items would you say you have personally received through the post in the last month? (MULTI CODE)
Type of post received in the past month Proportion of consumers (%) Net parcels:
16+ = 40% 16-34 = 43% 35-54 = 45% 55+ = 31%
Net letters: 16+ = 60% 16-34 = 53% 35-54 = 61% 55+ = 63%
Net publications:
16+ = 41% 16-34 = 32% 35-54 = 47% 55+ = 44%
Figure 6.23
23
18 26
36 28
7 5
22 24 20
6
18 20 22
38
8 5
22 26
13 5
17 26
42
23
6 6
27 28 22
8
19
34
51
17 8 6
16 14
29
7
0
20
40
60
80
Letters from organisations you have a relationship
with
Standard circulars from organisations you have a relationship
with
Addressed direct mail from other
organisations
Bills/invoices/ statements
Personal letters
Invitations / greetings
cards
Larger parcels
Smaller parcels
Catalogues / brochures
Subscription magazines
Adults 16+ 16-34 35-54 55+
Source: Ofcom Residential Postal Tracker, Q3 2012-Q2 2013 Base: All who say the number of items received by post has increased compared to two years ago (n = 1181 16+, 466 16-34, 371 35-54, 344 55+) QD6. Which of these types of addressed items are you personally receiving more often through the post now? (MULTICODE)
Type of post being received more often Proportion of consumers (%) Net parcels:
16+ = 34% 16-34 = 37% 35-54 = 38% 55+ = 21%
Net letters: 16+ = 24% 16-34 = 25% 35-54 = 21% 55+ = 24%
Net publications:
16+ = 23% 16-34 = 16% 35-54 = 25% 55+ = 32%
24
24
40
11
18
7
0%
20%
40%
60%
80%
100%
Reliance on post
Not at all reliant
Not very reliant
Neither
Fairly reliant
Very reliant
Reliance on, and satisfaction with, postal service Proportion of all respondents %
39
48
8 4 2
Satisfaction with postal service
Very dissatisfied
Fairly dissatisfied
Neither
Fairly satisfied
Very satisfied
Source: Ofcom Residential Postal Tracker, Q3 2012-Q2 2013 Base: All respondents (n = 4844 UK, 1338 16-34, 1582 35-54, 1924 55+) QE1. How reliant would you say you are on post as a way of communicating? (SINGLE CODE) QE2. Thinking about your experience of using the postal service to send and receive mail, how would
you rate your overall satisfaction with the postal service? (SINGLE CODE)
Figure 6.24
Figure 6.25
25
Source: Ofcom Business Postal Tracker, Q3 2012-Q2 2013 Base : All respondents (n = 1604 UK) QV1. On average, how much money does your organisation spend per month on sending mail items? Please think about all the letters, packets and parcels you may send as an organisation.
Monthly spend on sending postal items Monthly spend (% of respondents)
69%
18% 7% 5%
0%
20%
40%
60%
80%
100%
<£83 (less than £1k per annum)
£83-£208 (£1k-£2.5k pa)
£209-£420 (£2.5k-£5k pa)
£420< (more than £5k pa)
Figure 6.26
26
Source: Ofcom Business Postal Tracker, Q3 2012-Q2 2013 Base: All respondents (n = 1604) QV2a. On average, how many letter items does your organisation send per month? Please think ONLY about all the letters and large letters you may send as an organisation.
Volume of letters sent each month Proportion of respondents (%)
45% 61%
27% 28%
19%
19%
26% 17%
15% 10%
18% 21%
14% 7%
16% 23%
5% 2% 11% 6%
3% 1% 2% 6%
0%
20%
40%
60%
80%
100%
All businesses Administrative only Critical for communications
Core to business operations
500+
250-499
100-249
50-99
25-49
0-24
Role of post in the organisation
Figure 6.27
27
Source: Ofcom Business Postal Tracker, Q3 2012-Q2 2013 Base: All respondents (n = 1604) QV4. And who does your organisation use for its mail service?
Postal operators used Proportion of respondents (%)
73% 78% 69% 68%
24% 19% 28% 31%
2% 2% 2% 1%
0%
20%
40%
60%
80%
100%
All businesses Administrative only Critical for communications
Core to business operations
Other provider only
Royal Mail + other provider
Royal Mail only
Role of post in the organisation
Figure 6.28
28
65% 60% 48%
33%
16% 16%
33%
0%
20%
40%
60%
80%
100%
Standard 1st class stamp
Standard 2nd class stamp
Large letter 1st class
Large letter 2nd class
Franked 1st class
Franked 2nd class
Standard parcels
Source: Ofcom Business Postal Tracker, Q3 2012-Q2 2013 Base : All respondents using RM standard delivery services (n = 1460) QV6d. Which, if any, of the following Royal Mail services does your organisation use to send your standard mail?
Royal Mail services used to send standard mail Proportion of respondents (%)
Figure 6.29
29
Source: Ofcom Business Postal Tracker, Q3 2012-Q2 2013 Base: All respondents (n = 1604, less than £1k = 1016, £1k-£2.5k = 311, £2.5k-£5k = 127, more than £5k = 150) QS1. In the next 12 months, do you anticipate the volume of mail your organisation sends to increase, decrease or stay about the same?
Predicted change in volume of sent mail by businesses over the next year
Proportion of respondents (%)
15% 16% 13% 11% 9%
76% 79% 73%
65% 60%
9% 5% 13% 24% 31%
0%
20%
40%
60%
80%
100%
All businesses Less than £1k £1k-£2.5k £2.5k-£5k More than 5k
Increase
Stay the same
Decrease
Annual spend on post