Christmas parcel volumes have increased 421% since 2008 according to courier comparison website Parcel2Go.com with consumers increasingly snubbing the high street in favour of shopping online. In December 2013, the number of parcels which passed through the network rose 13% compared with December 2012, reaching a record high of 335,814 items. With increasingly encouraging signs of economic recovery and ever more businesses making the transition to digital retail, this trend is only set to continue – not just at Christmas but all year round. However, businesses which fail to keep up with this trend are in severe danger of losing market share, Parcel2Go.com warns.
In the age of eCommerce, parcel volumes have become commonly cited as a dependable indicator of consumer spending, and therefore, of overall economic outlook. With many prophesying 2014 as the year that Britain finally wades into more optimistic fiscal waters, Parcel2Go.com is forecasting an imminent explosion in parcel volumes. This would mean strong growth in a sector that has stayed relatively resilient throughout the recession. For consumers, businesses and retailers; the primary concerns remain centred on cost and convenience and delivery. 2013 was a year of change following the privatisation of Royal Mail, but the true results of it are only now becoming apparent.
Industry expert James Greenbury, CEO of Parcel2Go.com sets out his predictions for 2014 (and beyond):
1. eCommerce booms amid High Street gloom – Online sales currently account for 10% of all retail in the UK having represented just 2.7% in January 2007. If, as seems likely, this trend continues at a similar rate, we predict that within five years online retail will represent 15% of the sector as a whole. This signifies a phenomenal growth opportunity for forward-thinking retailers and delivery companies but also speaks to the increasingly prevalent preference for consumers to buy online.
2. Retailers vertically integrating delivery services – As retail becomes an ever more digital affair, we expect to see the big guns imminently launching their own courier networks. Behemoth Amazon has the wherewithal to boast one of the biggest courier networks by this time next year, granting it more control and a second source of revenue. In an age when we’re more likely to be in front of a screen than a person when making a purchase, the added opportunity for customer interaction will be a valuable asset in building brand loyalty.
3. More competition, lower costs – The privatisation of Royal Mail just shy of its 500th birthday was a pivotal moment for the parcel sector. Whilst questions remain over what this will mean for prices, the good news is that it has unlocked opportunity in the industry as never before. An even playing field will mean increased competition as providers seek to stake their claim on a sector which offers strong growth potential. Due to this, Parcel2Go.com is predicting it will have over half a million active customers who will send more than five million parcels in 2014.
4. Posties wearing orange not red – The privatisation of Royal Mail may well also lead to a change of postal provider as the less profitable last-mile deliveries are passed on by the Royal Mail. TNT Post has already said it will roll out an end-to-end postal service to rival the Royal Mail and 2014 might be the year that other providers jump on the bandwagon.
5. More convenience, more choice – Drop shops, Click and Collect, Collect+ and parcel lockers all enjoyed a meteoric rise in 2013 and this is a trend that is going to continue apace in 2014. Indeed, they are quickly becoming an absolute necessity as e-Tailers come to the realisation that the convenience consumers enjoy of buying online is often negated by the inconvenience of having to go out of their way to collect. These services are also capable of practically eradicating failed deliveries – something which currently comes at a huge financial cost to parcel companies, not to mention the environmental cost of the extra miles covered.
6. Businesses who don’t embrace online will get left behind – Christmas 2013 saw an unprecedented number of parcels sent and this is due in large part to the prevalence of online shopping. Retailers who fail to offer their customers an online option are at serious risk of being left behind. This is also true of retailers who have an online store but are not taking it seriously.
7. The last post? – Short of all email providers simultaneously deciding to throw in the towel, 2014 will see yet another decline in the humble letter. Royal Mail’s half year financial report showed a 6% decrease in addressed letter volumes. Given the consistent price rises of stamps over recent years, members of the public shouldn’t be surprised to find the service all but phased out at some point in the future. At the end of last year, the Canadian equivalent of Royal Mail announced the end of last mile delivery, and with former Canada Post CEO Moya Greene at the helm of Royal Mail, it wouldn’t be a dramatic surprise if the UK was to follow suit.
8. Drones, robots, clockwork carrier pigeons – Online retailers and delivery companies have made some extremely bold claims about how technology might be used in the future. Whether they can deliver on this remains to be seen but it surely can’t be too long until consumers are able to make a purchase online and have it delivered quite literally into their hands within hours.
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