Stephen Logan

Online Retailers to Feel the Pinch of Postal Strikes

21st Oct 2009 News, Industry News 3 minutes to read

The impending postal strikes, which are due to take place across the UK on Thursday and Friday, have forced many major companies to seek alternative delivery methods. However, without the budget to cover the additional cost of using a specialist courier service, or the product quantities to justify such a move, many online businesses may be set to suffer more than most.

After years of massive gains for the online ecommerce industry, these postal strikes have offered something of a wakeup call to businesses of all sizes. With Christmas rapidly approaching, consumers are looking to secure the last of the bargains and get their shopping done for the festive season nice and early. This makes the current strike plans all the more galling for Internet-based companies.

Amazon and John Lewis were amongst the first businesses to implement changes in their delivery policy. With Royal Mail seemingly going into meltdown and strikes affecting their ability to meet demand for the foreseeable future, both have found alternative couriers to ensure uninterrupted service.

Whilst this is all well and good for huge businesses, sending millions of pounds worth of stock each week, what about smaller retailers who have a far smaller demand? The cost, in most instances, of finding an alternative postal service is markedly higher. This means one of three things for companies who have already been stretched by the recession:

1)    Charge customers for extra postage, but risk turning some away;
2)    Incur the extra cost, make a short term loss and revert once Royal Mail’s normal service resumes;
3)    Continue using Royal Mail but make customers aware that there could be delays as a result of strike action.

It’s not an easy decision, and whichever way you look at it, your business will be effected. With wildcat strikes likely to continue, this may not be the last time this year that the national postal service is in turmoil either. Therefore the importance of having a solid contingency plan can’t be overstated.

The concern of the speed of deliveries has already made some consumers think twice about going online to buy goods. Despite these concerns, the BBC has reported that spending is actually up 8% since last year, with online retailers making £3.9bn last month. It also suggests that annual growth would pick up to around 15% once business picked up once again.

So whilst the postal strike is far from helping the UK’s ecommerce sector, the forecast isn’t at all gloomy. In fact this may serve as a long overdue wake up call for any businesses that have perhaps become complacent too. Customers don’t just want good value online, they expect high standards of service too – which includes the time taken to receive orders. It is therefore hugely important that companies start reviewing delivery options and ensuring that they are able to provide a continuous level of service, regardless of ongoing postal disputes.

As more retailers move online and high street shopping continues to suffer as a consequence, the marketplace is likely to become far more crowded. This makes the need to be providing effective  services all the more important, whilst you still need to consider how to attract those all important customers in the first place.

Postal strikes are a nuisance for business, regardless of any political or union perspectives. But the shortfall in delivery people needn’t ruin your company or the services you provide. Alternatives are available and the online industry itself is thriving. Don’t lose sight of your website itself in these tumultuous times. These issues should serve to spur you on and cast your net wider; after all, getting more customers in the future will help to limit any financial shortfalls now.

With the Internet now the most popular medium for UK advertisers, it’s certainly not a time to be throwing in the towel.

So while online businesses prepare for a buffering, this should only be seen as a blip. Don’t take your delivery responsibilities to customers lightly, but also ensure that you aren’t overlooking the bread and butter of any ecommerce company, the website. The busiest time for both Royal Mail and retailers alike is now upon us, so don’t allow your website to fall behind the competition.

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