The Post Office: a STORAGE and a DELIVERY business

Originally published by Hugh Salmon, Jul 15 2010, 11:24 PM following an earlier post on 20 Nov 2009

Today, Thursday 15 July, there is a letter from the Managing Director of eBay UK published in the Daily Telegraph:

Here is what she says:

Royal Mail’s challenge

SIR – Recent years have been difficult for Royal Mail customers. But with a new chief executive, Moya Greene, taking up her post today, the company has an opportunity to lay that past to rest.

The letters business is in decline, but with online retail set to grow from £46 billion to £62 billion over the next decade, new opportunities are opening up. The challenge is to ensure Royal Mail is able to deliver. Fewer than half of the online firms that sell
through our site are confident in Royal Mail’s ability to meet their needs. Worryingly, a third say Royal Mail’s limitations hamper their growth.

For a secure future, Royal Mail must address these concerns. More flexible delivery options, greater convenience for parcel collections and improved reliability are all essential to allay current fears. Extended opening hours for delivery centres,
announced this week, are a positive step.

Clare Gilmartin
Managing Director, eBay UK
Richmond, Surrey”

Here is what I said on Friday 20 November last year (

Putting things in boxes

A few years ago, in a moment of visionary genius, I realised that, over time, more and more products were going to be sold over the internet. Amazon’s business was growing at an extraordinary rate.

At the time, Amazon had made its name as the website of choice for books. Now, of course, Amazon sells virtually everything. But I remember thinking that books were a great place to start because, especially if you bought one at a time, they fitted conveniently through your average domestic letter-box.

Generally speaking, though, if you bought more than one book, or anything larger than the size of your letter-box, you had to be at home or a little card was popped through your door telling you that the Post Office had tried delivering a package but that, in order to retrieve it, and most annoyingly, you would have to pick it up yourself – back at the Post Office.

Well, I didn’t know much about the Post Office other than posting letters in nice, warm-red pillar boxes and receiving them through my letter-box. But I did know that sometime, somehow, somewhere, a box containing my online order arrived at the
Post Office, was loaded into a nice red van and driven to my house. Then, if I was out, the driver would drive my box back to the Post Office it came from – with my order still undelivered.

In this new-age world, with more and more people buying more and more products online, this all seemed a rather inefficient, and decidedly non-eco-friendly, delivery system.

Now, please put all of the above in a little box in your head because while I realised this was happening, I became aware of another market trend.

More and more, at a rate similar to the growth in online purchasing, I read that Post Offices were being closed all over the country. In fact, the deeper into the country you lived, the more likely would it be that your Post Office would be closed. This
meant that if you jumped onto the bandwagon of buying products online, but were not at home for them to be delivered, the wagon with your box in it would drive even further to find you were out and even further back to where it had come from.

Surely, if there was a system where you asked for your products to be delivered to your Post Office and that the card saying it had arrived was delivered by lunchtime with the rest of your morning mail, then you could go and collect your order at your convenience?

And surely this would save time and petrol and carbon for the Post Office as well as provide an exciting new reason for your local branch to survive?

Online retailers would offer their customers two options:

1. Would you like your order delivered to your home?

2. Would you like your order delivered to your local Post Office for you to “collect at your convenience (you will be notified when it arrives)”?

By saving all the inefficiencies outlined above, Option 2 might even be cheaper, creating a win-win-win situation. No need to close Post Offices (and perhaps the opportunity to open bigger and better branches); online retailers offering a choice of delivery options (and possibly cost savings); consumers in more control of their purchasing decisions (and supporting the survival of their local Post Office, especially in rural areas).

Perhaps, even, the Post Office could develop an expansion strategy? Maybe they have a wider product offering than they think? Maybe, because they have to store all these undelivered boxes, they Post Office has become a STORAGE, as well as a
DELIVERY, service?

Why not invest in those storage places that have sprung up all over the place (especially those revolting, ugly, intrusive, big yellow ones which you can paint in your nice, warm, royal, pillar-box red)? There’s lots of boxes in those and they make lots of money. And yes, PO, you can charge money for storage. Even if only pennies a day, there’ll be lots of them.

So come on PO – please don’t GO. We want you to GROW!

What a great idea. I dreamt of my destiny as a dotcom millionaire and, on 2 November 2005, I wrote to the Post Office. I told them what their problem was (but I didn’t tell them my solution).

What happened? Well I know my letter arrived, because a person describing himself as ‘Managing Director’ of a branch of the Post Office called me. He asked me to tell him my idea over the phone. I replied that if I did that, the Post Office could nick my idea (and my millions). He told me the Post Office had loads of new ideas and if I wouldn’t tell him mine over the phone, then he wasn’t interested. He put me back in my box.

Much more recently, Adam Crozier has been on the box. On the Andrew Marr Show (BBC Sun 27 Oct 09) he said: “Our market in the letters side is shrinking all the time whilst, at the same time, we are growing massively in terms of packets and parcels”.

There you go. Even the Post Office agrees with what I told them would happen four years ago. So now we have more and more products being sold online, more and more boxes being driven around in more and more vans to more and more empty houses and more and more Post Offices being closed – apparently, since 1997, the number of post office branches has fallen from 19,000 to 11,000.

Can this be right?

And where did I go wrong?”

So, there you go. That’s what the MD of eBay UK said today. And that’s what I said then.

About Hugh Salmon

Business leader. Adman. Writer.
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4 Responses to The Post Office: a STORAGE and a DELIVERY business

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  2. Hugh Salmon says:

    Thanks Reagan. Did you attach a list?

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