News & Press

A new report from Consumer Focus – Sense and Sustainability – explores how 21^st century consumers are likely to use the postal service in the future given the range of communication options available to them.

The report is intended to encourage debate on how the postal service should change to meet the needs of consumers in the digital age, as use of mobile phones and the internet replaces letter writing. In particular it explores the possible implications for the universal postal service obligation¹.

 The research² revealed that consumers’ habits when communicating for personal and business reasons have changed over recent years and are continuing to change, and that in the future they will use the postal service in a different way. Consumers are placing a different emphasis on the service, with a shift from sending letters to receiving parcels, which means a greater interest in making deliveries more convenient. E-retail is a significant growth sector and the postal service has a key role to play for businesses, especially small and medium enterprises (SMEs) ³.

 Key findings from the research also showed that:

• residential consumers may be willing to accept a reduced number of postal deliveries during the week, although SME consumers would only be willing to accept losing the Saturday delivery
• residential consumers are also prepared to see the removal of the distinction between First and Second Class post as they see little meaningful difference in service quality between the two
• consumers want several ‘paybacks’ for a reduction in service frequency:

- greater innovation in delivery options for packets and parcels

- extending the number and range of pick up points to include longer opening hours and more convenient locations

- maintaining the current pricing structure (‘one price goes anywhere’)

- regulation of reliability and punctuality

• the majority of consumers felt that vulnerable groups, such as low income households, older people or those with disabilities, would be further excluded by wider use of electronic forms of communication and wanted the postal regulator, Ofcom, to be given powers to protect these consumers.

 Kellin McCloskey, Head of Postal Policy, Consumer Focus Post said:

‘The communications market is changing dramatically and quickly, and post cannot be left behind. Consumers tell us that post will still have a role in their lives in five years’ time and the postal service must reflect their changing needs. We know that this will require a difficult debate that potentially involves changes to existing regulation and legislation, but that is all the more important that we begin this discussion now.

 ‘There is a growing tension between the substance of the universal postal service and its sustainability. Consumers should not be obliged to pay a premium for a ‘gold-plated’ service.  But that means that policymakers will need to think long and hard about how to ensure that technological advance and changing markets deliver good value and service to consumers, particularly the most vulnerable.’

 ENDS

 Notes to editors:

• Following the Government’s consumer advocacy reforms, Consumer Focus will continue to act in the consumer interest across a wide-range of sectors until our general advocacy role passes to Citizens Advice in April 2013. As part of the reforms, Consumer Focus will establish a new unit to identify and represent consumers’ interests in complex, regulated sectors, including energy and postal issues and, in Scotland, water. Our Annual Plan for 2012-13 is available online.
•  Consumer Focus intends to use the findings from this report to feed into Ofcom’s consultation on the extent to which the postal market is meeting the current needs of consumers, which is anticipate to start in the autumn.
• Consumer Focus has also put together some video clips from Big Sofa to illustrate these findings.

1. The Universal Service is specified in legislation and regulated by Ofcom. It is defined by:

-       The delivery of mail to every UK address

-       The collection of mail from every post office and postbox

-       Service six days a week for letters (including Saturday)

-       Service five days a week for parcels (Monday to Friday)

-       Affordable prices

-       ‘One price goes anywhere’: anyone in the UK can send post to any other part of the UK at the same price

2. Undertaken by Accent, the research comprised 28 focus groups across the UK with small and medium enterprises (SME) and residential customers, including four sessions with under-18s.

 

3. The postal service is facing two fundamental changes which are driven by technology. Mail volumes are falling significantly every year due to increased use of mobile phones, email and social networks. However, increases in online shopping mean an rise in ‘fulfilment’ mail volumes i.e. packets and parcels ordered online which need to be delivered. See Ofcom’s Communications Market report (2012) for further information about the changing communications market.