Supporting letters
Addressed letter volumes declined by 7% in the first half of the financial year, excluding elections mailings. We expect a similar level of decline for the full year. But, we’re still expecting to see a 4-6% annual decline in volumes in the medium term.
Stephen Agar, managing director, Consumer and Network Access, explains what we’re doing to support our letters business.
‘Letters have been in structural decline for some time, but they’re still a core part of our business model and will be for many years to come,’ he said. ‘We get a competitive advantage from combined letters and letterboxable parcel delivery. By delivering them together on one trip to the front door, letters help parcels and parcels help letters. So we’re focusing on doing everything we can to support this part of our business.
‘We have done a lot to improve the efficiency of our letters operation but there’s scope to do more. 85% of letters are now walked sequenced and we want to keep driving that up. We’re working with the industry to put more letters into trays, particularly large letters, and the current trials underway with the CWU give us the chance to really modernise the way we do things.'
It has been a difficult year for letters so far. We have seen a drop off in marketing mail, partly because of the new GDPR data protection regulations.
‘Customers are concerned about using their marketing data, because data requirements have become much more stringent,’ said Stephen. ‘Despite this, we are sticking to our medium-term forecast of a 4-6% decline per annum. This has reflected the rate of decline for the last 10 years.’
We’re introducing other new services for our letters customers. Magazine publishers are struggling for shelf space in supermarkets and on the High Street so we’re launching a new service that encourages them to focus on magazine subscriptions instead. We’re also putting barcodes on redirections so we can count and track the items more easily.
‘Most of the postage that we buy as consumers is used at Christmas time,’ said Stephen. ‘That’s why it’s vital that we both deliver a great service and remember to cancel stamps. If we don’t cancel stamps, we run the risk of carrying letters for nothing next year.'
