Postal Vote - 10 September 2010

Not surpisingly the government have announed they intend to sell or privatise the Royal Mail and will put options to parliament as soon as the legislative timetable permits. The startling facts are that letter post has declined in volume 15% in the last 5 years and is expected to shrink a further 20% in the next 5 years. Whilst parcel delivery has increased with online shopping, this market has already been deregulated and swallowed up by a host of other commercial groups. So what is to become of dear old letter post........

It is a fact that broadband is now in a majority of homes in the country including yours (you are reading this). Because advertisers have been switching their advertising spend from traditional mailshots through the door, which mostly had a low conversion rate, to more targetted spending online, even unwanted mail has declined!

But that does not explain all of the previous declines or forecast future ones.

The young generation have little experience of using mail as a means of communication. For some time they have used broadband as a means of sending messages, pictures or jokes. Facebook, Youtube; you name it. There is an inbuilt timebomb here. As this generation gets older, they, and generations behind them, will use traditional mail less and less.

If Royal Mail are to survive (by that I mean the brand associated with delivering letters) they have to change radically. This could for example, mean converting post offices into pick up centres for people collecting parcels when they have been at work all day. Online, Royal Mail could offer a secure online service which enables me to send you a letter and attachements. They cannot just be another Facebook but this is probably the closest example of the future. The utilitarian part of online mail delivery is important too. I need a receipt to be sure my mail was delivered to the intended person. There could be a host of useful online facilities developed (or adopted) by the Royal Mail brand. Yes, even describing the history behind a picture on an intelligent stamp may have its place as part of the bigger service.

At the end of the day, whether the Royal Mail is privatsied or sold or kept public will not save it. Fundamentally, they have to re-engineer themselves into a different sector and will inevitably face a major culture shift.