Royal Mail rolls out 'click and collect' to SMEs

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Royal Mail is rolling out its “click and collect” Post Office service to 20,000 British small and medium sized businesses (SMEs) as part of plans to bolster its UK parcel business.

The move will mean that SMEs can give their customers the option of collecting goods from any one of the company’s 10,500 post office branches.

Britain’s online shopping boom has resulted in Royal Mail enjoying a rise in its parcel revenues, which now accounts for more than half of its total business. This has partly offset the decline in letter writing.

However, last month the recently privatised business warned that its parcels business was suffering due to competition from online retailer Amazon, which is also its biggest customer.

Amazon accounts for 6pc of Royal Mail’s parcel volumes, or around 60m items a year. The reailer recently launched a fleet of its own delivery vans and plans to install collection lockers at UK railway stations. These will form part of its Collect+ network, which allows customers to fetch goods from local shops and other prominent locations.

The news of the threat of Royal Mail losing out on the UK parcels market to the US retailer pushed its share price lower for the first time since its first day of trading in October.

Ahead of its historic privatisation, Royal Mail put parcels at the centre of its growth plans, telling investors that Britain’s burgeoning online shopping market would fuel volumes by as much as 6pc by 2016.

As part of these plays it announced in May that it would start delivery parcels within the M25 and opening delivery offices on a Sunday. The business is already working on plans to extend post office opening hours as Moya Greene, chief executive, is betting the success of the postal service on a modernisation of Royal Mail and its branch network.

While home delivery is still preferred by most shoppers, click and collect is a fast growing delivery channel in the UK, mainly driven by the benefit to time-poor customers who want to pick up items at a nearby site when it is convenient for them, rather than having to wait at home for a delivery slot.

It is estimated that 82m deliveries will be made this year through “click and collect” and third party collection points, a 17pc increase on last year, according to Verdict. The value of this market is also expected to soar by 112pc from £3bn last year to £6.5bn in 2018.

“By teaming up with Post Office to offer the UK’s largest click and collect service, Royal Mail is enabling shoppers to have greater control over the delivery of their items,” Nick Landon, managing director of Royal Mail Parcels, said. “Home shoppers already trust us more than any other national parcels carrier to deliver their online orders”.