An Post expects up to 25% annual increase in parcel volumes this Christmas

An Post expects to see a 20-25 per cent increase in the volumes of parcels sent through the network in the run-up to Christmas this year compared to last Christmas amid an ongoing expansion in ecommerce.

Garrett Bridgeman, managing director of An Post Commerce, noted Chinese-owned retail sites Shein and Temu have been “growing at rapid rates”, particularly among 16- to 24-year-old shoppers, complementing “the usual suspects”.

Mr Bridgeman also noted an increase in parcel volumes from areas such as consumer-to-consumer sales through “circular fashion” sites such as Depop as well as a growth in subscriptions to monthly deliveries of products such as petfood, cosmetics and coffee pods.

Some 94 per cent of the more than 1,500 people surveyed on behalf of An Post Commerce – the business-to-business service operated by the State-owned postal company – have shopped online in the last three months, which he said was “quite extraordinary”. Ecommerce now equates to 19 per cent of Irish retail sales.

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Younger people make twice as many online purchases as consumers aged 55-plus, while people over that age are less likely to buy higher-value items online than both 16- to 24-year-olds and the 45- to 54-year-old age group, the survey conducted by Behaviour & Attitudes found.

Mr Bridgeman said about 70-80 per cent of online purchases here were made from UK sites in 2018. But since both Brexit came into effect and Covid lockdowns accelerated Irish retailers’ plans to sell online, the dominance of UK brands in Irish ecommerce has faded, with more than 50 per cent of online purchases now coming from Irish sites.

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“It is fantastic. What has happened is that there is a huge increase in people buying online across all sectors, including people aged 64-plus,” he said.

“In the past it was just your clothing, footwear, books and all that. But because people have become more and more comfortable with online shopping they are buying more standard stuff – household cleaning products, hardware. A huge growing area that is very interesting is in the pet industry. We’re seeing a lot of people moving into the subscription space, signing up to a once-a-month delivery of petfood.”

Although it is currently a “very small” share of the market, Mr Bridgeman identified potential for more activity in the second-hand consumer-to-consumer (C2C) market, driven by greater environmental awareness. Almost one in four people have sold items online, the survey found, while four in five intend to sell online again. “I think that will be a big growth area, and I think it has to be,” he said.

Mr Bridgeman said An Post had been onboarding a number of new clients in preparation for the busy autumn retail season, during which retailers are less likely to switch delivery contractors. As well as the obvious gift-buying frenzy, Christmas is also an important time of year because consumers often take on new ordering habits that they subsequently keep.

An Post’s parcel volumes have doubled since 2019 and it forecasts that they will do so again over the next five years. This “aggressive rate” of growth has offset annual declines in letter volumes, which are expected to continue.

“Early this year there was a slight drop-off in online shopping. I think it was energy [prices]. People were getting such big bills so we did see in quarter one, it wasn’t as strong. But from quarter two on it has been extraordinarily strong,” Mr Bridgeman said.

An Post’s parcel hub in Dublin 12, which opened in December 2019, is now already nearing capacity, ahead of forecasts. “We need to open a new site in the next three to four years – a massive site – so we are currently planning for that,” said Mr Bridgeman