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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Royal Mail pilots Sunday services to meet online shoppers' needs

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Royal Mail pilots Sunday services to meet online shoppers' needs
Royal Mail pilots Sunday services to meet online shoppers' needs
Royal Mail is trialling Sunday deliveries and collections as it adapts its services to the needs of online shoppers.

The postal service is to open around 100 delivery offices, those that handle the highest volumes of parcels, on Sunday afternoons in the summer, while also trialling Sunday deliveries within the M25. Parcelforce Worldwide, its express parcels business, will also launch Sunday deliveries nationwide in June for online shoppers who order from retailers taking part in a pilot service.

The service will also become available to contract customers across the UK.

“Through these new Sunday services we are exploring ways to improve our flexibility and provide more options for people to receive items they have ordered online,” said Moya Greene, chief executive of the Royal Mail. “The support of the Communication Workers Union has enabled us to respond quickly to a changing market, underlining the importance of the ground-breaking agenda for growth agreement.”

The Royal Mail has also opened its distribution network later on Saturdays as well as on Sundays. That means larger traders can get Saturday and Sunday orders to Royal Mail earlier for Monday delivery.

Other moves to tailor delivery services to the needs of online shoppers include the extension of the ‘delivery to neighbour’ service across the UK, and free redelivery to their home or a neighbour. The Royal Mail and Post Office last year launched a click and collect service, Local Collect, which uses Post Office branches. Post Office data shows 99% of the UK population lives within three miles of a post office branch.

The announcement of the service came just before the Royal Mail reported full-year revenues of £9.4bn in the year to March 30, up by 2% on the same time last year, while pre-tax profits grew to £1.7bn from £283m last time, although underlying profits stood at £363m, up from £304m last time. Parcels, said the Royal Mail's statement, now account for more than half - 51% - of its business, after it grew by 7% compared to a 2% decline for letters.

But the Royal Mail said while its volumes were "driven largely by growth in ecommerce, we do not benefit from growth in all areas of e-retailing." As an example, the company said, it did not operate in all online segments and was under represented in some, such as clothing and shoe returns. "We are now focusing on faster-growing market segments," it said.

It cited the diversity of its parcel customer base as a benefit. About a quarter of its domestic parcel revenue comes from large and medium-sized companies - with its single largest customer accounting for six per cent of revenue in the UK parcels and inland letters division. The remaining three-quarters comes from individuals and small and medium sized companies as well as micro companies. "We believe the breadth of our customer base and our strategy of supporting SMEs to grow through ecommerce means we are not as exposed to the actions of our largest customers as some of our competitors," said the Royal Mail statement.

Our view: Royal Mail is not the first delivery organisation to trial Sunday deliveries, but it is the largest, so the move it is now making towards the kind of flexibility that customers now aspire to is certainly significant. We have no doubt this trial will become a full service, and one that's appreciated by shoppers as they look to buy in the way that best suits them.

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