Ofcom publishes 2017 Communications Market Report

The UK postal and delivery sector regulator Ofcom has shown in its latest Communication Market Report that while the total addressed letters volume fell by 4% between 2015-16, 88% of people say that they value the option to use the postal service.

According to Ofcom the decline in letter volumes “was driven by a 9% decline in Royal Mail’s end-to end letter volume, to 4.7bn items, which accounted for 40% of total letter volumes in 2016″.

Royal Mail is most prized by the older generation. 82% of 16-24 year olds said they valued being able to use the post, rising to 85% in 25-44, 91% between ages 45-64, 93% among the 65-74 group and 97% among those over 75 years old.

Letters delivered by other operators than Royal Mail have risen from 9 million in 2011 to 16 million in 2016, while the direct mail share of total advertising spend has declined from 11.4% to 8%.

2015 was the only year that Ofcom reported parcel volumes and these were 1.6 billion pieces.

In its analysis of the UK’s parcel market, Ofcom noted that: “Online activity continues to drive developments in e-commerce and delivery networks.”

Ofcom noted that “price is the consumer’s main concern”, with more than 50% of online shoppers not completing orders online because “delivery charges were too high”.

While most people still say that their first preference is for home delivery, about half have used a click and collect service to pick up their order in a store. Twelve per cent said they had had a purchase delivered to a parcel shop, 11% to a post office, and 6% said they had had a delivery made to a parcel locker.

UK consumers are now more aware of faster delivery options and Ofcom noted that: “More than half (55%) of adults have used next day delivery, 14% have used same-day delivery, and 4% have used within-the-hour delivery.”

But – as many independent reports have noted – consumers are often more interested in free, or at least cheap, delivery, than they are in fast delivery. According to Ofcom: “The relatively limited use of same-day and within-the-hour delivery may also reflect consumers’ unwillingness to pay a premium for delivery.”

On page 224 of the report, Ofcom relays the findings of a survey in which adults who had received one or more parcels in the past month were provided with a list of companies and asked from which of these they had received a parcel delivery.

Ofcom noted: “More than eight in ten (83%) said that Royal Mail had delivered a parcel(s) to them, while just over a quarter (27%) had received one or more from Hermes. A further five companies had delivered a parcel(s) to between 10% and 20% of those who had received one: Yodel (19%), Amazon Logistics (17%), DPD (16%), Parcelforce (13%) and DHL (12%).”
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