Checkout - The Real And The Not So Real In Volume Decline

[TrueBlueTerrier]

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Robert Donderwinkel, managing director of the European Envelope Manufacturers Association (FEPE) is shortly to take on a new role outside the industry and back in his home country of New Zealand. This might seem unremarkable enough - after all people do move in and out of the industry but his positive outlook on trends in e-substitution and hard work with the FEPE, will have been felt by many within the industry.

There has been much change as mail volume declines in the mail sector, not least of which has been the rather brutal reshaping of the Royal Mail, but as Donderwinkel points out, the decline has not been as great as predicted and one has to treat the green credentials of digital with a certain amount of scepticism. Certainly the entrenched myth that consuming vast amounts of paper damages the environment doesn't quite stack up (excuse the pun), particularly when you consider that most paper production is from sustainable sources and actually encourages the need for forests.

Both Robert and I would be the first to agree that we have not always seen eye-to-eye on a range of issues, but I have been continually encouraged by his tenacity when it comes to upholding the views of those in the paper chain and in the process giving me a new perspective on the paper versus digital argument.

The FEPE completed a study on postal volumes covering the period from 2009 to 2014. The result of their model projected a 23 % decline in addressed mail volumes over the five-year period of the study – principally due to e-substitution as broadband internet uptake evolves in Europe. More recently though, the FEPE Marketing Committee completed a review of the study which showed that the actual decline from 2008 to 2010 amounted to 11% vs the model which forecast a decline of 22%. This means that in 2010, Europe delivered almost 12 billion more mail pieces (+13%) than the FEPE had expected.

Donderwinkel puts this down to consumers.

"I believe the answer lies in the alternatives. Effectively I am unconvinced that the majority of consumers really want to shift to e-solutions. They may try them out – but, in the end, the majority prefer a physical product with no hidden costs (for example the cost of printing and storage). This view was reinforced by two press releases that recently passed over my desk.

"The first was from Itella who announced that just over five million mail items were sent via their electronic system in 2010. By my calculations, this accounts for just eight percent of the Finnish postal market. Having launched it some years ago and having the benefits of operating in a strong IT literate country, I am not so sure that this could be considered positive news that favours the IT product. The second was from the Germany Envelope Manufacturing Industry (http://www.vdbf.org" onclick="window.open(this.href);return false;) in which they announce that 72% of the German population still want to receive their invoices in physical form. This independently run study reinforces the fact that people still want the physical product – something that I think could be shown across most of Europe.

"FEPE statistics confirmed a small but important increase of 1.1% in delivered envelope pieces in 2010 – the first increase since 2007. Likewise, there are clear situations – such as unaddressed mail – where volumes are increasing. This suggests to me that, for many products, the pressure relates more to pricing than the physical nature of the channel."

As a consumer, as well as editor for a busy postal news site, I see this with open eyes. Whilst I don't post as many items as I once did, he is quite right - consumers do prefer something real when it comes to marketing and post in general. My praise for the Royal Mail's 'Matter Box' is well known and I can think of many marketing items that were so good they were difficult and sometimes impossible to throw away.

At the risk of seeming like a grumpy old man, it reminds me of one of my pet hates - the automated supermarket checkout. There are several reasons why I dislike them, including the fact that all too often it takes longer to navigate one than a regular checkout. What I most dislike about them however, is the lack of real contact and a feeling that, as a socialite, I've been robbed of a worthwhile conversation with those in the ordinary checkout queue. I also like to see what everyone else has bought and can hardly do that trying to follow the robotic instructions delivered by the automated one. She has no time for such frivolous encounters, sees humans as an irritant, and is only too keen to see the back of me and my groceries.

This is perhaps where progress is questionable and I now make a point of avoiding the automation and actively engaging with real live people.

What really brought this home was two nights ago when an old school friend and I took a drive out to a well known supermarket chain at around 1.am to look at T-shirts (as you do) and ended up at the faceless checkout. One of the items he bought was flagged up at the wrong price and it then took an attentive girl within the store to intervene and override the machine's insistence that it was right and we were wrong. This took around 15 minutes to resolve and the icing on the cake which made the pair of us belly-laugh was the machine's final departing quote: "Thank you for choosing the fast lane."

Donderwinkel's successor at the FEPE, Lisa Kretschmann, will I am sure be as forthright as Robert and hang me out to dry should I not do my homework. Without the FEPE, the business would be much poorer. I wish Mr Donderwinkel every success and thank him for his insight over recent years.

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[TrueBlueTerrier]

Hellmail questioning the forecast of volume decline - The world is about to come to an end...

[pinstripe]

Hellmail questioning the forecast of volume decline - The world is about to come to an end...

Next will come the four horsemen of the RM Planning Dept.

[Tman]

Hellmail questioning the forecast of volume decline - The world is about to come to an end...

More recently though, the FEPE Marketing Committee completed a review of the study which showed that the actual decline from 2008 to 2010 amounted to 11%

Isn't 11% in two years bad enough for you, then?

[Ahebban]

The problems lie in how much faith an industry/business should place on forecasts based over a longer period. How often do we see and hear that forecasters are 'surprised' that events haven't matched their own forecasts in the short-term, let alone long-term? We are constantly being told that 'faceless automation/information technology' will play an increasing role in business and society as a whole in the future. The very nature of that advance cannot be accurately predicted given that IT itself is governed by the same rules. A three-year plan will always have better chance of success over a five-year plan, simply because it can be structured on known facts and trends with minimal reliance on 'if's, but's, could be's and maybe's'.

Royal Mail itself has come unstuck with its recent 'Business Plans' because forecasts have not matched reality. CWU and RM employees in general are at the front-line consequence of business plans and forecasts, and when they do not match reality it is they that suffer. You only have to look through the threads on RMC to see that.

RM can always throw away the last business plan and start the paper exercise of writing another one with the aim of 'trying harder'. Unfortunately, by then the money has been spent and irrevocable damage has already been done to the infrastructure and morale of employees.

[fishtank]

I'm still waiting on my hover-car Tomorrow's World promised me...
Predictions are for fraudsters and "mystics".
Betting a company's entire future on it is very risky game of chance.
I mean who could have predicted that Ricky Martin was gay?

[Phantom]

Royal Mail closes mail centres and UK Mail opens up new ones

[Phantom]

More recently though, the FEPE Marketing Committee completed a review of the study which showed that the actual decline from 2008 to 2010 amounted to 11%

Isn't 11% in two years bad enough for you, then?

RM said it was 20+% decline, thats 100% up on the figure quoted so someone is telling pork pies!

[ziko]

Hellmail questioning the forecast of volume decline - The world is about to come to an end...

More recently though, the FEPE Marketing Committee completed a review of the study which showed that the actual decline from 2008 to 2010 amounted to 11%

Isn't 11% in two years bad enough for you, then?

Tman I bought some shares a couple of years ago (No not RM colleague shares haha) they went up from £1 to £2 however they've dropped from their £2 high by about 11% since 2011 but which ever way you look at it im still cashing in!

so the moral of the story is 11% over 2 years is just a small part of the larger picture. RM spends hundreds of thousands of pounds every year on spinning lies to you and the general public over 'reduced mail voumes' Oh and by the way how many packets and parcels did your colleagues and you deliver today...

[Tman]

RM spends hundreds of thousands of pounds every year on spinning lies to you and the general public over 'reduced mail voumes'

They do...?

Oh and by the way how many packets and parcels did your colleagues and you deliver today...

Not one....never have, never will. What's that got to do with a measured 11% drop in mail?

[Phantom]

Is it 11% or 20% tman and while your making your mind up, i'll keep cutting off due the high volumes we've got!

[Tman]

="Phantom"]Is it 11% or 20% tman and while your making your mind up,

This is the quote. No mind-making up required.

More recently though, the FEPE Marketing Committee completed a review of the study which showed that the actual decline from 2008 to 2010 amounted to 11%

i'll keep cutting off due the high volumes we've got!

Good to hear it and long may it last, although if the reduction of 5.5% pa continues that may not be too long...

[fishtank]

although if the reduction of 5.5% pa continues that may not be too long...

Not an issue when minimum 5% savings plans are an annual event...
It's jobs that decrease in this business not workload...that's why no matter what figures are quoted delivery members can't see any difference.

[Tman]

Not an issue when minimum 5% savings plans are an annual event...

5% reductions are always an issue regardless of abitrary savings target reductions. One doesn't nullify or negate the other.

It's jobs that decrease in this business not workload...that's why no matter what figures are quoted delivery members can't see any difference.

Refusing to see/aknowlege that the mail "market" is shrinking world-wide, and basing that on the same old "me bag's just as full" logic is just lame; more so when it's apparent that jobs are being lost to keep existing staff fully employed. So DO blokes work just as hard as they ever did...so what?
At what point does the fog lift and reality set in? When there's only half the number of staff there was ten years ago? A quarter?

[fishtank]

Refusing to see/aknowlege that the mail "market" is shrinking world-wide, and basing that on the same old "me bag's just as full" logic is just lame; more so when it's apparent that jobs are being lost to keep existing staff fully employed. So DO blokes work just as hard as they ever did...so what?
At what point does the fog lift and reality set in? When there's only half the number of staff there was ten years ago? A quarter?

Probably not for a while because in the main "DO blokes" don't see the job losses,which in delivery are usually through natural wastage...all they see is the workload.
It makes the decline irrelevant to them because as you say they are working just as hard,if not harder than they ever have...You can't blame them for that because opinion is mostly formed through experience,not through articles in hellmail......that's not lame or "refusing to see"...it's just human nature.
The real job losses as you know come in processing where most of them can see the decline...and the results.