Boon or Blip: The Franking Industry & Stamp Price Rises

As you will no doubt already know the Royal Mail last week anounced a big hike in the price of stamps and, therefore, in the cost of sending unfranked mail.

(If you didn’t know you can read all about it here.)

On the face of it the increases of 30% and 39% respectively in the cost of 1st and 2nd class stamps would seem like a real boost for franking machine companies. As the cost of franked mail is increasing by only a few pence on single letters, surely SMEs all over the place will be rushing to lock in the savings that franking machines provide?

So far, so obvious – and the sheer volume of franking machine activity on the web over the past few days would seem to bear this hypothesis out. But longer term, what will be the impact on physical mail? Are franking machine suppliers really going to benefit from escalating mail prices or will it sound the death knell of their industry?

Could we in fact see a backlash against the use of post, with many companies who before would never have considered going digital being forced into it by the heavy hand of the Royal Mail and OfCom?

The first clues to such a backlash crop up in articles like this in Post & Parcel:

Dismay at “toothless dog” Ofcom over Royal Mail Price Hike

In which several parties, notably the Direct Marketing Association and the Forum of Private Business criticise the price rises and suggest that they “will drive more and more businesses away from mail to cheaper alternatives, which is concerning as mail volumes are already declining year on year.” (DMA)

There are also concerns that users will abandon 1st class mail altogether leading to further hikes in the price of 1st class to keep it profitable:

“The quickest way for the Royal Mail to decline further is by pricing businesses out of their service. The costs of business are already high. There needs to be some respite not further crude hikes.” (FPB)

And does this puff-piece in Link2Portal contain a note of despair from Pitney Bowes – old enough and large enough to detect a black eye for their own industry?

Rocketing postal rate will require SME rethink, warns Pitney Bowes

The quote in question: “Although digital communications undoubtedly have their place, traditional print campaigns are still critical for most businesses and are likely to remain so for many years to come.”

Only time will tell…