Online retail keeps express markets alive

Online retail is offering the express market a much-needed lifeline as it crawls out of the hole it has found itself in since the onset of the global economic recession.

Research by independent market analyst Datamonitor reveals that a rise in home deliveries is benefiting post offices and courier firms contending with a difficult trading environment. With the global economy slowly recovering from its worst crisis in decades, express markets are expected to benefit as key industry sectors bounce back.

Online retail has weathered the recession

One of the areas that remained relatively buoyant despite the recession is online retail, leading to a rise in home deliveries.

A strong 2009 Q4 for e-retail saw retailers competing aggressively to capture share of festive spending by distributing discount codes and offering free delivery.
Consequently, many consumers were tempted into purchasing their Christmas shopping online.
Rate hikes indicate autonomous growth
In the US, both UPS and FedEx announced rate hikes for their home delivery products, indicating autonomous growth in this segment despite a fragile economy.
This offers these firms an opportunity to climb out of a situation of generally weak demand and downward pressure on prices, said Datamonitors senior analyst Erik van Baaren.
Shifting focus to home delivery
TNT has shifted its focus on to the home delivery segment where, starting from its home market in the Netherlands, it has announced partnership agreements with large retailers to help them establish an online presence in Europe.
The company aims to provide so-called Special Delivery Solutions involving the functions of billing, technology, logistics and marketing for high-street retailers.
Through this move, it is aiming to expand its remit within the home delivery market, away from just the delivery of parcels.
Mr van Baaren said: As electronic substitution continues to ravage mail volumes and de facto market liberalization has not yet materialized in Europe, forcing the company to partly withdraw from the European mail market, this is a necessary move that also hones in on current market trends within the retail market.
It also reflects the growing importance to private consumers of a full-scale service portfolio that includes gift returns.
This directly benefits those retailers that operate multiple sales channels.
Cross-border B2C market set to grow
TNT's strategic intentions also follow an important trend in the European express market, as identified in Datamonitor's European Express Market Map 2009, which highlighted cross-border business-to-consumer volumes as offering the highest potential over the next five years.

With other factors such as demographic changes, better websites and consumers looking for online bargains, Datamonitor views this as a logical move that can help the express market recover.


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