Interview: Postal strike impact
Postal strikes will go ahead this week
Also In The News
Thursday, 22, Oct 2009 03:19
By Jack Clark.
Lisa Berwin is a senior reporter at Retail Week. She spoke to inthenews.co.uk to discuss the impact of the ongoing postal strikes on retailers on the high street and the web.
- - - - - - - - - -
From your contacts and sources, today, have you heard any reactions from retailers and e-retailers about the strike?
"We've mainly been focusing on the run up to it, because we've had to have everything in place for the worst, which has happened. I think a couple of days strike is cope-able, but if it extends beyond a few days and all the way in the run up to Christmas then that will lead to more problems."
On that, today I was reading in the papers and newswires that they are talking about rolling strikes in the coming weeks, what happens for e-retailers if that occurs?
A lot of them have alternatives in place. If you look at fashion retailers, especially for bigger items they wouldn't have used Royal Mail for that anyway, but what is an issue for them is return as when people return items by Royal Mail, and that can be a problem. A lot of them have things on their websites, telling people about alternative couriers. Moving to alternatives may cost slightly more, but that's just what they're forced to do."
What does this mean for sites like eBay, where their users sometimes use Royal Mail because of cost?
They have alternatives in place as well. In speaking to their sellers you see alternatives, which is more expensive but, I think hopefully a little bit shorter term they're just going to have to take on the cost themselves, or put the prices up slightly for customers, and I think we'll see a mixture of the two. I'm not saying just eBay by the way, I mean generally.
I can imagine that third party providers of postage services are rubbing their hands at this situation, but what do you think this means for Royal Mail in the aftermath to this - do you think e-retailers will migrate back to Royal Mail, or could their faith have been damaged?
I think in a lot of cases the faith will have been damaged. If they permanently lose an account like Amazon, that's massive - a lot of money - so if this is going to continue and this thing does continue through Christmas, well, this isn't the first time the Royal Mail has gone on nationwide strikes, but I think this may be the case where if they find a courier who is a good alternative, who they think they can secure a good price with, then they're going to stick with it. If this is an ongoing battle, which it looks like at the moment, then they've got to look at alternatives, and that could be unchangeable after this.
What do you think the effect is going to be on high-street retailers, do you think this will help them at all?
I think in some ways it might. If you have got an online offer and a shop, people use the internet a lot to look at what products they want. For them, they've got their situation where people will go and look at their online offer, then go into the stores, so they've got to take advantage of that, or take advantage of the fact people can pick up from stores and do click and collect which is becoming popular and that could even grow again. I think that's the sort of thing retailers are going to have to push if this strike continues. It could be good for those which have got stores, because they've got that advantage.
When I spoke to [Retail Week editor Tim] Danaher he asserted that this could destroy the hard work that e-retailers have done in building confidence and reliability over the last few years - do you think this could be a major hit to e-retail in the short term?
It could be in the short-term, but not in the long-term. Some people will worry, then go to a high-street shop or do the click and collect. E-retail is very advanced now. They've known this is coming, they've got the couriers in place and, short term, this could have some impact. The IMRG figures did hint this was some part of the slowdown in growth. I think it's a blip but I don't think it's long-term. With this they can show their customers good service, and that's going to build confidence for the future hopefully. Also, a point is that it's the small businesses that will be really affected. The big businesses can cope but it's the small ones that are really going to struggle. It's the small businesses which, unfortunately, will be hit.