Nearly half of the post delivered to UK homes is handled by private companies before being handed back to Royal Mail for final mile delivery, according to an Ofcom report, which also details a worrying decline in direct mail.
So-called “access mail” has increased from 25% of total mail in 2008 to 49% in 2013, including a 3% rise last year compared to 2012. If the trend continues, Royal Mail will be collecting less than half of UK mail from next year onwards, for the first time in its history.
Ofcom’s Communications Market Report also shows a worrying decline in direct mail spend.
The main applications of mail remain transactional (such as bank statements and invoices), accounting for 49% of total mail; and direct mail, which accounts for 28%. Parcels, publishing and social mail (such as greetings cards and invitations) make up the remainder.
These percentages have remained relatively unchanged over the past five years as volumes have declined, with the exception of the growth in parcels, driven by online retail.
Almost half of all mail, as estimated by PricewaterhouseCoopers, is transactional. The vast majority of this transactional mail originates from businesses, accounting for 92% of all UK mail.
However, in 2013, £1.5bn was spent on direct mail, a 5.1% decline on 2012. These figures represent spend on post, and the production of direct mail.
The report also details how digital is eating into direct mail’s market share. Over the five-year period 2009-2013, spend on direct mail has fallen by 17.1%. The proportion of total advertising spend accounted for by direct mail has also fallen each year. In 2011, direct mail accounted for 17.8% of total advertising spend; by 2013, this had fallen by 3.% to 14.1%, as Internet and mobile advertising take an increasing share of this market.
In May this year, Royal Mail’s results showed its share of direct mail spend had plummeted £24m in the last 12 months alone. The 2013 results saw direct mail spend increase 2% to £1.135bn but it has fallen back to £1.111bn this time round. However, the figure is still a significant improvement on 2012, when spend tumbled to £1.063bn.
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