Online companies in jeopardy, due to postal strike...

Date Published 17/10/2007 - Click here for more recent news

Online companies in jeopardy, due to postal strike...

 According to analyst firm Forrester, online retail sales in Europe will more than double in the next five years to 263 billion Euros as the number of online shoppers grows to 174 million*.

 

* Ecommerce 2006-2011 Forecast, Forrester

 

Whereas when focusing attention to the much publicised Christmas shopping frenzy, Interactive Media in Retail Group (IMRG) cite UK spend of £7.6 bn in the run-up to Christmas 2006 and their research suggests this will rise to £10 bn in the run-up to Christmas 2007.  In the same timeframe, another analyst Netrank, give an alternative view and report "online sales are set for a massive 60% year on year increase with UK consumers expected to spend a record high of £17bn this festive season".  What’s a few £bn between analysts/forecasters, eh?

 

So is it all good news for the e-retailers in the run-up to Christmas 2007 - or are there likely to be some pitfalls along they way?  Well yes, actually – one potentially disastrous one, too. And it’s the recently ‘resolved’ Royal Mail postal strike that’s causing a few collywobbles in the on-line industry.

 

A recent article in The Telegraph headlined Internet retailers fear disastrous Xmas sales, lamented on the findings of another IMRG report that opined that:  The worst postal strike for nearly 20 years is "destroying online companies" and will hit internet Christmas sales because customers can no longer buy confidently over the web, and further warned that “the industry has been badly hit by the industrial unrest gripping the postal network.”

 

James Roper, IMRG's chief executive, said: "The strike is destroying the industry.  Our industry works on confidence and trust of the customers.  The Royal Mail is the only doorstep delivery business in the UK.  The uncertainty that this is bringing into the market place is a nightmare. It is particularly hard for small firms who do not have the means to engage a replacement carrier at short notice."

 

So what’s to be made of that gloomy message from IMRG about the Xmas on-line shopping prospects?  Well here in EASIserv.com towers we take the view that there’s genuinely some concern abroad at the moment; but we also think that the people who ought to be most concerned are those who work in the Royal Mail – whatever their role and or status.  Because there’s definitely more than just a whiff of uncertainty in the air at the moment that the Royal Mail is an organisation that cannot be trusted to deliver.  And it’s this very lack of trust that undermines their long-term position as a serious carrier of choice to many e-tailers.

 

As a case in point on Monday of this week we had some time-dependent (but very bulky) documentation that we urgently needed to get transported from Northampton to the South of England.  Normally we would have taken it to the local Post Office and sent it via one of their premium services, and yet,... and yet…..we couldn’t quite trust the Royal Mail to deliver. 

 

Despite the fact that the ‘strike’ was over (courtesy of the High Court) – we couldn’t be certain that some wild-cat secondary affair might not break out somewhere that would put our critical delivery in jeopardy.  So in the end we decided to drive it across town to DHL Couriers and gave the job to them: ironically we had to drive past the local Royal Mail main depot en route - that still had the detritus of the recently withdrawn picket-line strewn by the gate.  It cost more to send the package via DHL but we had no doubts that they’d deliver it – which they duly did.  That’s the feeling of uncertainty that will find a resonance with many e-tailers - and we think they’ll do what we did, and find an alternative carrier.

 

So at EASIserv.com towers we sincerely hope that the optimistic festive season sales targets do indeed come to pass but we also don’t entirely share IMRG’s pessimistic view that the recent strike will destroy online companies this Xmas – whether or not it contributes to (further) destroying the Royal Mail or not, is another matter entirely.

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