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Figure 6.1
UK postal services industry 2010 2011 2012 2013 2014
Addressed letter volumes 15.6bn 14.6bn 13.5bn 12.9bn 12.7bn
Addressed letter revenues £4.1bn £4.1bn £4.2bn £4.2bn £4.3bn
Proportion of access in total mail 44% 49% 54% 56% 56%
Letter volumes delivered by operators other than Royal Mail
11.3m 8.5m 18.0m 56.1m 158.5m
Direct mail share of total advertising spend 15.9% 14.9% 14.5% 14.1% 13.9%
Source: Royal Mail Regulatory Financial Statements, Royal Mail Wholesale, Royal Mail Group Annual Reports, AA/Warc, Nielsen. Note: Royal Mail calendar year volume figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and unaudited submissions to Ofcom and are therefore not directly comparable with Royal Mail’s published accounts. Royal Mail figures relate to the "Reported Business”. Prior data are not comparable. Figures are nominal.
UK postal services industry key metrics
Figure 6.2
2
43.8 49.8
58.8 68.0
78.2 91.0
104.0
0
20
40
60
80
100
2008 2009 2010 2011 2012 2013 2014
Source: Interactive Media in Retail Group, January 2015
Value of UK e-commerce sales, 2008-2014 Value (£ billion)
Figure 6.3
3
11
26
28
49
56
0% 10% 20% 30% 40% 50% 60%
The provider used for delivery
Offers range of delivery options
Offers click & collect in store
Deliveries are quick and efficient
Offers free delivery
Source: YouGov, Innovations in Retailing, fieldwork March 2015. Base: All adults 16+, 2114. Q: Which, if any, of the following do you consider to be important factors
when you are choosing a retailer? Please choose all that apply.
Delivery and fulfilment factors considered to be important when choosing a retailer
% of respondents stating each factor
Figure 6.4
4
24
32
32
39
40
43
61
63
0% 20% 40% 60% 80%
Delivery to alternative collection points
Able to amend delivery details after order
Delivery options which include Sundays
One hour time slots for delivery
Click and collect
Texts with exact time of product delivery
Tracking of parcel/goods in real time
Email confirmation at all stages of delivery
Source: YouGov, Innovations in Retailing, fieldwork March 2015. Base: All adults 16+, 2114. Q: Which, if any, of the following systems do you like to have in place, as
standard, when ordering online (including via your mobile)? Please choose all that apply.
Features of delivery that consumers like to have in place when shopping online
% of respondents stating each feature
Figure 6.5
5
60
4
6
14
16
0% 20% 40% 60%
Not prepared to pay to upgrade at all
Change delivery details after order
Real time tracking
Specified delivery time
Faster delivery time
Source: YouGov, Innovations in Retailing, fieldwork March 2015. Base: All adults 16+, 2114. Q: Still thinking of online deliveries, which of the following statements do you
agree with? Please choose all that apply.
Appetite to pay for enhanced delivery features % of respondents that would be prepared to pay for each feature
Figure 6.6
6
3% 3% 4%
40% 30% 36%
57% 67% 60%
0%
20%
40%
60%
80%
100%
2012 2013 2014
Economy
Specified day(including next day)
Specified time
Source: Ofcom analysis of IMRG / Metapack Delivery Index, January 2012-December 2014. Note: Specified time includes: AM, PM, before 10am, evening and school run. ‘Specified day’ includes
same day, next day and Sunday. Proportions rebased to exclude international.
Service types used for e-retail fulfilment: 2012-2013 Proportion of parcels (%)
Figure 6.7
7
0 1 1 2 3
6 6
14 68
0% 20% 40% 60% 80%
OtherDelivery to Post Office
Delivery to parcel shopDelivery to parcel locker
Delivery to relatives/friends homeDelivery to work
Don’t know Click and Collect
Home delivery
Source: YouGov, Innovations in Retailing, fieldwork March 2015. Base: All adults 16+, 2114. Q: Now thinking about shopping online (including via your mobile) and the
delivery of your purchases, in general which of the following do you prefer?
Preferred delivery location for online shopping % of respondents
Figure 6.8
8
57
31
6 0 0 0 1 4 5
14
35
21
9 4 2
9
0%
20%
40%
60%
1-3 days 4-6 days 7-10 days 11-14 days Up to 3weeks
Up to 4weeks
Longerthan amonth
Don’t know
UK retailer Overseas retailer
Source: YouGov, Innovations in Retailing, fieldwork March 2015. Base: All adults 16+, 2114. Q: EXCLUDING large goods/furniture, if you were to order a product from a
UK retailer/overseas retailer (e.g. a book, DVD, dress, phone etc.), how long would you consider an acceptable time for standard delivery to your chosen address?
Delivery time expectations, UK retailers and overseas retailers % of respondents
Figure 6.9
9
59
42
46
45
45
25
51
49
46
46
16
7
5
9
9
0 20 40 60 80 100
Northern Ireland*
Scotland
Wales
England
All adults 16+
Yes No Don’t know
Source: YouGov, Innovations in Retailing, fieldwork March 2015. Base: All adults 16+, 2114, England, 1771, Wales, 104, Scotland. 178, Northern Ireland, 51. Q: Have you
ever not ordered a product because of concerns over the delivery? *Note: Base size for Northern Ireland is <100.
Whether delivery concerns have ever stopped an order being made % of respondents
Figure 6.10
10
8
8
17
21
24
51
55
0 20 40 60
Item was too valuable
Unable to arrange a suitable delivery location
Return charges were too high
Previous poor experience with retailer/deliverer
Was not able to arrange a suitable delivery time
Delivery time was too long
Delivery charges were too high
Source: YouGov, Innovations in Retailing, fieldwork March 2015. Base: All adults 16+ who have not ordered a product due to delivery concerns, 954. Q: Why did your
concerns regarding delivery stop you from ordering the product? Please choose all that apply.
Delivery concerns that have stopped an order being made % of respondents
Figure 6. 11
11
4,084 4,059 4,156 4,236 4,255
3,936 3,905 3,993 4,062 4,055 2,856 2,635 2,552 2,568 2,543
1,080 1,270 1,441 1,494 1,512
142 150 157 163 164 6 4 5 11 35 0
1,000
2,000
3,000
4,000
5,000
2010 2011 2012 2013 2014
Total market
Royal Mail total
Royal Mail end-to-end*
Royal Mailaccess
Accessoperators
End-to-endoperators
Source: Royal Mail Regulatory Financial Statements, operator returns to Ofcom, Ofcom estimates. Royal Mail calendar year revenue figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and unaudited submissions to Ofcom and are therefore not directly comparable with Royal Mail’s published accounts. Royal Mail figures relate to the "Reported Business”. *Royal Mail end-to-end is an Ofcom calculation and refers to Royal Mail total letters revenues excepting access. Royal Mail access revenues are as per its Regulatory Financial Statements and include a small amount of parcels. The effect of this is that Royal Mail’s access revenues are slightly overstated and its end-to-end revenues are slightly understated. Prior data are not comparable. Figures are nominal.
Addressed letter revenues: 2010-2014 Revenue (£m)
Figure 6. 12
12
15,567 14,598 13,482 12,874 12,681
8,650
7,423 6,236 5,633 5,424
6,906
7,166 7,228 7,185 7,098
11 9 18 56 159 0
6,000
12,000
18,000
2010 2011 2012 2013 2014
Total mail
Royal Mail end-to-end*
Royal Mailaccess
Other operatorsend-to-endletters
Source: Royal Mail Regulatory Financial Statements, operator returns to Ofcom, Ofcom estimates. Royal Mail calendar year volume figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and unaudited submissions to Ofcom and are therefore not directly comparable with Royal Mail’s published accounts. Royal Mail figures relate to the "Reported Business”. *Royal Mail end-to-end is an Ofcom calculation and refers to Royal Mail total letters volumes excepting access. Royal Mail access volumes are as per its Regulatory Financial Statements and include a small amount of parcels. The effect of this is that Royal Mail’s access volumes are slightly overstated and its end-to-end volumes are slightly understated. Prior data are not comparable.
Addressed letter volumes: 2010 -2014 Volume (million items)
44% 49% 54% 56% 56%
0%
20%
40%
60%
2010 2011 2012 2013 2014
13
Figure 6. 13
Proportion of access in total mail: 2010-2014
Proportion of access in total mail volume
Source: Royal Mail Regulatory Financial Statements, Operators’ returns, Ofcom estimates
Year on year growth rate of access volumes 13.1% 3.8% 0.9% -0.6% -1.2%
Figure 6. 14
14
11.3 8.5 18.0 56.1
158.5
0
40
80
120
160
2010 2011 2012 2013 2014
Source: Ofcom analysis of operators’ returns
Other operators’ end-to-end delivered volumes: 2010 to 2014 Volume (million items)
Figure 6. 15
15
49 48
24 26
5 5 9 9 9 8 4 4
0%
20%
40%
60%
80%
100%
2013-14 2014-15
OtherInternationalSocialPublishingMarketingBusiness
Source: Royal Mail plc, full year 2014-15 results, and Royal Mail plc, full year 2013-14 results Note: relates to Royal Mail revenue and not the total market, so accounts for c.95% of total revenue
Letter revenue, by type of mail: 2013-14 to 2014-15 Proportion of letters revenue generated by each type (%)
Figure 6. 16
16
1,719 1,648 1,569 1,490 1,459
15.9% 14.9% 14.5% 14.1% 13.9%
0%
6%
12%
18%
0
500
1000
1500
2000
2010 2011 2012 2013 2014
Spend on direct mail Direct mail share of advertising spend
Source: AA/Warc Advertising Expenditure report / Nielsen. Figures are nominal.
UK direct mail advertising spend and share of total advertising: 2010 - 2014 Spend (£m) Share of total advertising spend (%)
Figure 6. 17
17
Source: AA/Warc Expenditure report / Nielsen
Share of direct mail expenditure, by sector: 2010-2014 Share of spend (%)
31.9% 31.3% 29.3% 28.7%
30.8%
21.2% 20.2% 19.2% 20.1% 19.2%
16.8% 18.4%
17.4% 17.6% 18.0%
0%
10%
20%
30%
40%
2010 2011 2012 2013 2014
RetailFinancialGovernmentIndustrialServicesDurablesConsumables
Figure 6. 18
18
6,437 6,424 6,196 5,515 4,909
13.9% 14.3% 15.1% 14.8% 14.9%
0
5
10
15
0
2,500
5,000
7,500
2010 2011 2012 2013 2014
Subscription circulation Share of total print circulation
Source: Mediatel/ABC, 6-monthly net average circulation and subscription sales
Magazine subscription circulation: 2010-2014 Average subscription circulation (thousands) Share of print circulation (%)
Figure 6. 19
19
48 52 61
66 75
90 90 93 95
40 42 47 51
58 69 69 73 74
34 36 39 41
46
60 60 62 63
24 27 30 32 36
50 50 53 54
0
20
40
60
80
100
2007 2008 2009 2010 2011 2012 2013 2014 2015
First ClassLarge Letter
Second ClassLarge Letter
First Class
Second Class
Source: Royal Mail. Figures are nominal. Prices refer to Royal Mail First and Second Class Standard and Large Letter list prices for letters up to 100g,
First and Second Class single piece stamp prices: 2007-2015 Price (p)
Figure 6. 20
20
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All respondents (n = 3557 adults 16+, 996 16-34, 1205 35-54, 1356 55+) QC1. Approximately how many items of post – including letters, cards and parcels – have you personally sent in the last month?
Number of items sent per month
Items of post sent per month (% of respondents)
23 33 21 18
21 25
20 18
19 17
21 19
23 18
25 26
8 5 9 10 5 3 4 9 1
0%
20%
40%
60%
80%
100%
Adults 16+ 16-34 35-54 55+
Don't know21+ items11-20 items5-10 items3 or 4 items1 or 2 itemsNone
6.0
Mean number of items sent per month
4.0 5.7 7.9
Figure 6. 21
21
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All respondents (n = 3557 adults 16+, 996 16-34, 1205 35-54, 1356 55+) QC2. And how many of these items sent in the last month were parcels rather than letters or cards?
Number of parcels sent per month
Parcels sent per month (% of respondents)
70 69 66 75
20 21 22 17
5 5 7 4 3 4 3 3 1 1 2 1
0%
20%
40%
60%
80%
100%
Adults 16+ 16-34 35-54 55+
Don't know
21+ parcels
11-20 parcels
5-10 parcels
3 or 4 parcels
1 or 2 parcels
None
1.1
Mean number of parcels sent per month
0.9 1.1 1.1
Figure 6. 22
22
32
49
81
44
57
64
47
54
63
40
53
70
0 10 20 30 40 50 60 70 80 90
Parcels
Formal mail
Personal mail
16+16-3435-5455+
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All who have personally sent any items of post in the last month (n = 2685 adults 16+, 652 16-34, 948 35-54, 1085 55+) QC5. Which of these types of mail would you say you have personally sent in the last month by post? (MULTICODE)
Categories of mail sent in the past month Proportion of consumers (%)
Figure 6. 23
23
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All who have personally sent any items of post in the last month (n = 2685 adults 16+, 652 16-34, 948 35-54, 1085 55+) QC5. Which of these types of mail would you say you have personally sent in the last month by post? (MULTICODE)
Types of mail sent in the past month Proportion of consumers (%)
38 28 30
56
39
22
43
25 26
48 46
24
43
30 29
49 43
25 31 29
35
68
30 18
0
20
40
60
80
Formal letters Payments forbills
Personal letters Invitations/greetings cards/
postcards
Larger parcels Smaller parcels
Adults 16+ 16-34 35-54 55+
Figure 6.24
24
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All respondents (n = 3557 adults 16+, 996 16-34, 1205 35-54, 1356 55+) QC10. SHOWCARD Compared with two years ago, would you say that the number of items you send through the post has... increased greatly, increased slightly, stayed the same, decreased slightly, decreased greatly?
Percentage of respondents reporting an increasing or decreasing amount of post sent in the past two years
15
22
16
9
23
17
24 26
05
1015202530
Adults 16+ 16-34 35-54 55+
Increase Decrease
Proportion of consumers (%)
-8pp 5pp -8pp -17pp Net increase:
Figure 6.25
25
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All who say that the number of items sent by post has decreased, compared to two years ago (n = 812 adults 16+, 164 16-34, 311 35-54, 337 55+) QC13. As your use of post has decreased compared with two years ago, which, if any, of these other forms of communication are you using more instead of post? (MULTICODE)
Methods of communication being used instead of post Proportion of consumers (%)
65
29 25 22 19 13 8 11
77
47 37 37
7 12 16 4
75
33 29 28 16 12 11 9
51
16 16 8
27 13
2
18
0
20
40
60
80
100
Email Textmessaging/
SMS
Mobilephone calls
Socialnetworkingsites/ apps
Landlinephone calls
In-person/face-to-face
InstantMessaging
None inparticular
Adults 16+ 16-34 35-54 55+
Figure 6. 26
26
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All respondents (n = 3557 adults 16+, 996 16-34, 1205 35-54, 1356 55+) QD1. Approximately how many items of post – including letters, cards and parcels – have you personally received in the last week?
Number of items received per week
6 11 3 5 14
21
9 13
17 18
15 17
39 32
45 38
18 13 21 20 6 5 6 6
0%
20%
40%
60%
80%
100%
Adults 16+ 16-34 35-54 55+
Don't know21+ items11-20 items5-10 items3 or 4 items1 or 2 itemsNone
Items of post received per week (% of respondents) 8.5
Mean number of items received per week
7.1 9.2 8.9
Figure 6.27
27
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All respondents (n = 3557 adults 16+, 996 16-34, 1205 35-54, 1356 55+) QD2. And how many of these items received in the last week were parcels rather than letters or cards?
Number of parcels received per week
Number of parcels received per week (% of respondents)
64 62 57 73
23 24 27 18
7 6 10 4 4 5 4 3
0%
20%
40%
60%
80%
100%
Adults 16+ 16-34 35-54 55+
Don't know
21+ parcels
11-20 parcels
5-10 parcels
3 or 4 parcels
1 or 2 parcels
None
0.9
Mean number of parcels received per week
1.0 1.1 0.7
Figure 6.28
28
Source: Ofcom Residential Postal Tracker, Q4 2013-Q1 2014 Base: All who have received a parcel in the last week (n = 796 adults 16+) QD17. Thinking of the parcels that you have received in the last week, which of these companies delivered the parcels? (MULTICODE) Chart shows companies mentioned by more than 1% of those receiving any parcels in the last week
Proportion of consumers reporting delivery of parcels by company Company parcels delivered by (% of all who have received a parcel in the past week)
46%
26%
21%
7%
Only RoyalMail
Royal Mailand anyother/sOnly other/s
Don't know
72
12 10 7 7 7 6 4 3 0 %
20 %
40 %
60 %
80 %
Figure 6.29
29
42
68
83
41 44 39
57
76
46 37 39
72
90
47 47 46
71 83
30
47
0
20
40
60
80
100
Personal mail Direct mail Transactionalmail
Parcels Publications
16+16-3435-5455+
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All respondents (n = 3557 adults 16+, 996 16-34, 1205 35-54, 1356 55+) QD4. Please think about items that are addressed to you personally rather than leaflets or charity collection envelopes or bags that may come through your letterbox. Which of these types of items would you say you have personally received through the post in the last month? (MULTICODE)
Categories of mail received in the past week Proportion of consumers receiving each type of mail (%)
Figure 6.30
30
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All respondents (n = 3557 adults 16+) QD4. Please think about items that are addressed to you personally rather than leaflets or charity collection envelopes or bags that may come through your letterbox. Which of these types of items would you say you have personally received through the post in the last month? (MULTICODE)
Types of mail received in the past week Proportion of respondents who have received each type of mail (%)
17 21
27 30
35 38
44 49
55 83
0 20 40 60 80 100
Subscription magazinesPersonal lettersSmaller parcels
Invitations/ greetings cardsLarger parcels
Catalogues/ brochuresAddressed direct mail
Letters from organisations you knowStandard circulars
Bills/ invoices/ statements
Figure 6.31
31
Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 3557 adults 16+, 996 16-34, 1205 35-54, 1356 55+) QF1. As far as you know, how much does it currently cost to send a standard letter by First Class using a stamp? (single code) Note: Our research was conducted before April 2015, when the price of a First Class stamp increased from 62p to 63p.
Awareness of the price of a First Class stamp Proportion of respondents (%)
33 31 35 33
11 7 11 13
22 25 22 20
33 36 32 33
0%
20%
40%
60%
80%
100%
Adults 16+ 16-34 35-54 55+
Don't know
Incorrect price- over 62p
Correct price -62p
Incorrect price- under 62p
Figure 6.32
32
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All respondents (n = 3557 adults 16+, 996 16-34, 1205 35-54, 1356 55+) QF2. As far as you know, how much does it currently cost to send a standard letter by second class using a stamp? (SINGLE CODE)
Awareness of the price of a Second Class stamp Proportion of respondents (%)
39 36 43 39
4 2 3 7
11 13 9 12
45 49 45 42
0%
20%
40%
60%
80%
100%
Adults 16+ 16-34 35-54 55+
Don't know
Incorrect price- over 53p
Correct price -53p
Incorrect price- under 53p
Figure 6.33
33
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All respondents (n = 3557 adults 16+) QF3/4. It currently costs 62p/53p to send a standard letter First/ Second Class within the UK. How would you rate the Royal Mail's First/ Second Class service in terms of value for money? (SINGLE CODE)
Perception of value for money of First and Second Class stamps
Proportion of respondents (%)
17 15
40 34
16 16
16 20
11 14
0%
20%
40%
60%
80%
100%
First Class Stamp Second Class Stamp
Don't know
Very poor
Fairly poor
Neither goodnor poorFairly good
Very good
56%
Total who agree First or Second Class stamps are good value for money
48%
Figure 6.34
34
Source: Ofcom Residential Postal Tracker, Q2 2014 - Q1 2015 Base: All respondents (n = 3557 adults 16+, 996 16-34, 1205 35-54, 1356 55+) QH2A-H. Agreement with statements about sending/ receiving post
Attitudes to post – proportion of consumers agreeing to each statement Adults
16+ 16-34 35-54 55+
I prefer to send letters or emails to companies rather than make a phone call, so that I have a written record
60 65 64 53
I prefer to send emails rather than letters whenever possible 54 73 59 35
I only use post if there is no alternative 44 52 46 37
I send fewer letters by post now due to the cost 29 26 26 35
I would feel cut off from society if I can't send or don't receive post 51 38 47 64
I only send my mail First Class if it needs to get there the next day 53 53 50 56
I trust Second Class post to get there in a reasonable timeframe 61 59 60 65
Figure 6.35
35
Source: Ofcom Residential Postal Tracker, Q3 2014 - Q1 2015 Base: All respondents (n = 2354 adults 16+, 675 16-34, 802 35-54, 877 55+) QE6. How reliant would you say you are on post in terms of letters and cards as a way of communicating? (SINGLE CODE)
Reliance on letters and cards as a way of communicating Proportion of respondents (%)
22 16 21 28
35 33
39 33
10 11
11 9
21 23
19 21
11 16 9 9
0%
20%
40%
60%
80%
100%
Adults 16+ 16-34 35-54 55+
Don't know
Not at all reliant
Not very reliant
Neither
Fairly reliant
Very reliant