Royal Mail plans to introduce parcel lockers, which will enable people to collect their online orders from anywhere in the UK. The company is racing to keep up with competitors such as Amazon.
Nick Landon told reporters that the chief commercial officer of the former state-owned company was “actively” working on the installation of lockers to store parcels for customers until they can collect them, copying the service provided by the US ecommerce firm and other competitors.
These proposals are part of the ongoing efforts by the postal service, which has been around for 507 years, to meet the demand for online shopping delivery services that operate 24 hours a day. Royal Mail is the UK’s biggest delivery group. However, it has lost share due to postal workers resisting plans to change their working practices.
The lockers, which let consumers collect their online purchases whenever they want to rather than wait at home for the package to arrive, could also reduce reliance on postal workers.
As ecommerce has grown globally, parcel lockers have become more popular. This has allowed other couriers and companies to reduce their labour costs.
Landon stated in an interview, that consumers and shippers “are becoming increasingly reliant on parcel lockers” and that Royal Mail must “address the entire market”. He added that “it won’t take long” before they are developed.
InPost, a Polish company that had installed over 4,800 parcel lockers across the UK by last year, has reported a ninefold increase in its global revenue to $1.8bn for the four years up to 2022. This is a sign of increasing competition in the delivery industry.
Alex Irving, logistics analyst at Bernstein said that InPost was constantly opening new branches, unlike Royal Mail, because it is profitable. Alex Irving, logistics industry analyst at Bernstein, said InPost was opening new locations “all the time” and that it is profitable unlike Royal Mail.
Royal Mail’s dominant market position has been further weakened after postal workers walked off for 18 days in the last year. Retailers have therefore sent more parcels via rival couriers. According to Pitney Bowes, the company’s share in UK parcel volumes fell from 34% to 25% between 2020 and 2022.
Royal Mail and the union of postal workers agreed to change delivery times, Sunday working in exchange for higher pay. The group is still struggling with vacancies and low service .
Ofcom, the industry regulator, said in December that it was “concerned” about Royal Mail’s lack of progress. . . It has not been able to give us a timeframe for when it will improve its performance”.
Landon stated that the company is focused on “a place where we’re profitable” and on “a situation where we’re growing and winning market share through great service”.
He said that this would “first be demonstrated by what we deliver at Christmas, and then really focussed service enhancements for next year”.