Online shops demand Royal Mail ups its game

(Reuters)

More than four-fifths of UK online firms are critical of the Royal Mail, and accuse the service of "stifling" the development of their businesses.

Internet companies said they wanted the postal operator to improve its service standards in five crucial areas, including notification of the time or day of delivery and better weekend deliveries, according to a major survey of more than 600 online businesses by eBay, the internet auction giant.

More flexibility later in the day, with evening deliveries, evening opening times at post offices, and evening collection slots at postal depots were also cited by repondents.

The damning indictment of Royal Mail's services follows the revelation last week that the internet is worth an estimated £100bn to the British economy, according to a separate survey commissioned by Google UK. Of that, 60 per cent was online commerce.

While the Government is committed to privatising some or all of the Royal Mail, the criticism of the postal operator's services could help to shift the debate around how it needs to better support UK businesses.

According to eBay's online business index, 84 per cent of small and medium enterprises (SME) want Royal Mail to improve its services so as to encourage the development of their businesses.

Jody Ford, eBay's director of SME businesses, said: "That more than three quarters of our businesses have said that Royal Mail needs to improve is a fact that it must take seriously. Online businesses' reputations rely on good customer service and feedback.If delivery and collection times as well as opening hours are not enhanced, Royal Mail could stifle the growth of an important new market."

According to the IMRG and Capgemini research, UK consumers are expected to spend an estimated £17.4bn in the fourth quarter, up from £15bn last year.

The criticism of the Royal Mail will resonate with the Coalition Government, as it last week unveiled plans to hand the operator an extra £1.3bn over next fours years to reform the post office network. Ms Ford said: "Royal Mail is a vital part of the infrastructure that the UK needs to help drive economic dynamism. The Government needs to step up and recognise that Royal Mail is an essential part of the nation's economic infrastructure that needs to be upgraded, rather than treating it as a problem that needs to be fixed."

Last week, the House of Commons debated the main principles of the Postal Services Bill and decided that the bill should be given its second reading. Despite its privatisation push, the Government has promised that 10 per cent of the shares will go to the company's employees.

Ms Ford said: "Online businesses need new postal services that meet customer and business needs, and the Government must not shy away from making difficult choices, even if that means redefining the standards we currently expect from Royal Mail".