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Choosing Your Postal Partner in the UK

Date: February, 2010 --

No doubt you have heard about the travails of Royal Mail and its labor union, the Communication Workers Union. There has been substantial labor unrest including full strike action, most seriously during the December 2009 Christmas period. The union is concerned about the pace and depth of modernization of the postal system. Much, if not most, of sortation in Royal Mail is still accomplished by hand, an anachronism that everyone understands must be replaced with machinery. This is but one of many job-threatening improvements that Royal Mail must make in order to survive.

But should you even think of not mailing into the UK? The answer to that is extremely simple: absolutely not. Currently Royal Mail is operating quite normally. And in any event, there are excellent alternatives.

First of all, the incumbent postal operator has shown itself to be extremely flexible and proactive in using its non-striking management personnel to clear the backlog of mail. We were advised by our contacts that have personal relations with Royal Mail personnel that in the frenzied strike period during the pre-Christmas period, special attention was paid to inbound international letters, which were cleared in time and on schedule.

Second, it must be admitted that there has been some migration of major customers to competitors. Reports from the London company Post-Switch, which advises companies on mailing alternatives, indicate that some 45 companies have found alternative mail service providers in the last month or so. One important migrant, Lands' End, switched its 10 million items per year business to DHL and TNT. Presumably, that figure represents both parcels and catalogs.

It also appears that mailings of a significant size can realize significant savings. A source at Post-Switch is reported to have advised that a 50,000 piece mailing could save 3.6 pence per piece using the Dutch-based company, TNT. In addition, TNT has already announced it is planning to launch "final mile" delivery to homes and offices throughout the country if it is successful in convincing the government to exempt its service from VAT. Royal Mail does not have to collect VAT on letters posted through it. This has been a point of contention with the private carriers in the liberalization of the market.

And if you are thinking of simply totally switching to digital, think again. Royal Mail’s latest Home Shopping Tracker study showed what marketers have observed in the US –shoppers are tending more and more to research prices and products across multiple channels. The research found that 63% of people surveyed refer to a catalogue as part of their buying decision even if they make the final purchase in-store or online. And 45% look at a print catalogue before making an online purchase. Surprisingly, the USPS found that people who buy online are 45% more likely to purchase if they have seen the company’s catalog. You still need a catalog, or a direct mail piece WITH the digital effort to make it happen.

In conclusion, the UK market remains an extremely attractive one for mailers from the US. Royal Mail continues to function on all cylinders. Alternatives are there if needed, and Data Services is there to help you every step of the way.