POL00027245
POL00027245
STRICTLY CONFIDENTIAL
CEO’s Report - September 2015
1. Introduction to this month’s Board and overall strategic priorities
e Following a busy month in August, the pace has continued into September. At this
Board meeting we are considering a number of people issues underpinning our
transformation, significant changes to the structure of the business with the completion
of Project Hawk (Insurance) and a substantive update on Project Iris (Supply Chain).
e In this update, I have also returned to a number of issues discussed at the June Board
Awayday, notably Mails and Financial Services strategies. Section 4 — key change
programmes - has been recast to offer an over-arching view of our transformation,
reflecting the enhanced governance structure and supporting processes that David
Hussey has introduced. Finally, our senior leadership team are all undergoing training
to enhance their skills in writing Board/ business papers. This is ongoing and some of
this month's papers have adopted the new approach: your feedback would be
welcome.
Key decisions for this Board:
e The Board is being asked authorise engagement with the Pension Trustee to agree
closure of the Royal Mail Pension Plan from 31 August 2016; and to agree the
design of the new defined contribution scheme they will be transferred to. This is a
proposal that we have considered very carefully and we believe that this change is
necessary to deal with the likely event that pension fund surplus runs out in early 2018,
in the way that best protects the benefits accrued by members. Engagement with both
the Unions and the Trustee would follow the Board!is agreement, with consultation with
members likely to commence in December or January. The Pensions Committee has
endorsed the recommended approach.
e Further to the Board('s consideration in July, the Board is asked tauthorise the
completion of the acquisition of Bank of Ireland’s interests in the Post Office
Insurance JV and its transfer to POMS (Hawk). If the acquisition is approved,
signings will take place on 30 September 2015.
e Al Cameron and Mark Ellis have provided an interim paper on options for the future
of Post Office supply chain (Iris). The Board is asked to confirm that it is content for
the project to continue, including entering into a 3 month, exclusive dialogue with a 3@
party — Vaultex — to develop and assess a business combination.
e The Board is also asked to approve the award of the Back Office IT contract to
Accenture. This is the final major procurement in the new IT Supply Chain and follows
the Board's consideration of the IT strategy presented in January this year. The capital
cost of £10.6m generates benefits against current costs of £4.1m per annum. The total
contract is worth £35m over seven years.
CEO’s Report September 2015 1
POL00027245
POL00027245
STRICTLY CONFIDENTIAL
2. Business performance overview
Overall performance
e Atthe end of Period 5, EBITDAS was a loss of £24.3m which is £2.1m adverse to
budget. Income relative to budget is lower in financial services, telecoms and supply
chain, offset in part by above budget performance in mails and government services,
and lower postmaster and non-staff costs. Als papers provide a fuller update on Period
5 for discussion at the meeting. We continue to focus on driving up income, with
another 2000 agency branches receiving additional training and ongoing support in time
for peak season. Close scrutiny of cost plans continues.
3. Other updates of note for the Board
People & Cost Transformation Issues - IR Risk Mitigation & Planning
e Neil Hayward and Al Cameron have provided an update to the paper on cost reduction
levers presented at the June Awayday. The analysis of the potential benefits has been
completed along with the associated IR risks and risk mitigation planning. The Board is
being asked to note the progress since June; and to accept the level of risk and the risk
mitigation planning to deal with it.
Mails Strategy
e As discussed at the Board Awayday, I committed to a regular update on progress with
our Mails Strategy - an omni-channel approach within the parameters set out in the
MDA, and on key aspects of the Financial Services Strategy. Both now have
programme plans, with milestones and activities reviewed fortnightly by the GE.
Progress is set out below:
Royal Mail Negotiations
e We have continued a positive dialogue with Royal Mail and have agreed to enter into
negotiations to secure adjustments to the current MDA in January 2016. Our desired
outcomes from the RMG negotiation remain as outlined in the June Board paper:
o Post Office online sales channel (omni-channel, paid for sale & accept of RAG
products).
o Owning customer data; developing sustainable revenues by collecting and
analysing customer profiles and providing associated rewards and incentives to
purchase more and stay longer.
o Potentially extending the term of the agreement.
e« We are now entering more detailed negotiation planning and, recognising its complexity,
are in the process of engaging with a short-list of specialist providers to procure support.
e Inthe meantime, we have continued to work with RMG to progress priority projects
around enhancing the customer experience:
o Tactical improvements to drop-off and collections in branch — target is to identify
and deploy, where possible, solutions pre peak 2015.
o Enhanced proposition for marketplace sellers (post-start up to pre-RMG account).
CEO’s Report September 2015 2
POL00027245
POL00027245
STRICTLY CONFIDENTIAL
o Commercial discussions around segregation, service credits and bar-coding.
e We have completed a review of the Mails Distribution Agreement (MDA) with respect to
what can/cannot be done within the constraints of the agreement. The internal audit of
our compliance with contractual obligations under the MDA is now scoped and will be
commenced later this month. In addition to highlighting any specific areas for
attention/improvement, we expect the audit to provide valuable insight in how best to
manage the MDA going forward. Obligations on both Post Office and RMG are tracked
using operational KPls that are reviewed and actions agreed at the monthly joint
operations forum.
Small Business Club (SME)
e We have reviewed the provisions for a Small Business Club (SBC) in the MDA, which
sets out some quite specific requirements and tiers to manage accounts and offer
incentives.
e From this and subsequent market analysis a high-level view of the Small Business Club
proposition has been defined along with the associated proposition development phases
(high-level). This shows the journey from today (Drop & Go) to the desired future state
(Small Business Club); an omni-channel customer management and sales capability
with associated analytics and loyalty schemes.
e We are now in the process of defining the delivery details of phases 1-3 (there are 5
phases in total) to align the initial physical/digital elements, the accompanying support
model and the customer journey. We aim to complete this work in the next few weeks to
gain funding approval for target launch of an initial SBC digital offer in April 2016. Ata
tactical level we are in detailed discussions with a 3rd party to undertake a low cost
online pilot for Drop & Go customers. This could form part of our capability in April 2016
subject to further validation.
Digital Intermediary
e The strategy work identified the potential for POL to develop its own Udigital aggregator
platform in mails. Work is underway to define the business case for this Plan B/
disruptive play, which will go to GE before the end of the calendar year.
Financial Services Strategy
e Personal Financial Services: as indicated above, we are due to consider a paper at this
meeting on Project Hawk in order to drive growth in our insurance business. We are
seeking to grow the savings book by an additional £500m this financial year and have
requested the Bank of Ireland revise their balance plan for the remainder of 2015/16 and
improve pricing. Post Office Current Account proposition development continues, and
although the two propositions should be compelling for target customers, a successful
business case looks challenging - the GE will review in November. On investments, our
focus will turn shortly to analysing options, with the aim of business approval on the
preferred option by end November.
e We continue to develop effective sales capabilities across all channels, including:
o Regional and Area Managers in Financial Services have all completed a
development and assessment centre to understand current capabilities, identifying
CEO’s Report September 2015 3
POL00027245
POL00027245
STRICTLY CONFIDENTIAL
both talent and performance risks. Following this all Area Managers have tailored
development plans to raise capabilities; these are primarily focused on coaching to
develop needs identification skills and customer conversations.
o The Post Office Money Academy has redesigned the way we induct our people;
stripping out a lot of product knowledge based content to be completed as upfront
online learning, leaving face-to-face courses to focus on sales conversations and
holistic selling. All new inductees are now following the digital-enabled process.
o We have commenced the definition phase of Digital POM Branches, engaging with
stakeholders across POL to prioritise the capabilities required for development over
the coming 16 months. In parallel, we have progressed with a number of high priority
initiatives, such as the digitisation of FS/MS incentive schemes and scorecards.
o Hub & Spoke — Working in partnership with the POL Agency team and BOI, roll-out
continues of the “Hub & Spoke” initiatives, including the extension Financial
Specialist distribution in WHSmith branches.
o Incentives — we have gone live with both Counter and Financial Specialist incentive
schemes and gone through the first payment cycles. Critically, this is the first
performance-based payment for FSs in two years; the incentive scheme is tapered,
based on performance, service and compliance outcomes. The scheme was
introduced mid-Q1 and c.35% of FSs were awarded a bonus. The initial response
from FSs and FSAMs is positive, and the scheme has driven renewed engagement
within the Specialist community. We will continue to monitor outcomes following Q2
results.
e We have also continued at pace to develop the other growth levers:
o Weare in the final stages of a business case to develop a digital front end capability
which enables us to build relationships with our customers and leverage cross-sell
opportunities
o We are enhancing the use of data analytics and have built propensity models,
starting with Mortgages and Loans
o We continue to build customer awareness of Post Office as a financial services
provider, including through our summer travel campaign.
e Nonetheless, competition in travel money has been particularly fierce; competitors such
as M&S and the supermarkets have dropped their margins significantly and to improve
their pricing in branches. We are trialling a similar approach in the North East and
monitoring the impact closely, both on foreign exchange and other related products eg
travel insurance.
Verify
e In July, HMRC unexpectedly limited the number of services using Verify because of their
concerns that up to 50% of customers were either dropping out or failed to successfully
create an identity. This is disappointing as we are dependent on HMRC(is support to
meet budgeted net revenue targets and their decision came without warning to the
Government Digital Service (based in Cabinet Office) and consequently to Post Office.
GDS insist on communications being channelled through them to departments and vice
versa. However, we are following up with contacts in HMRC.
CEO’s Report September 2015 4
POL00027245
POL00027245
STRICTLY CONFIDENTIAL
e Weare targeting a 70% success rate in 15/16 through a series of product improvements
which include a new App which reduces the need for both a passport and a driverLis
license, simplifying the verification journey. We have also launched a WorldPay
functionality which brings forward credit history details additionally enabling us more
easily to establish verification. Overall, WorldPay has brought a 6% increase. We are
seeking to persuade HMRC that if they reconnect services and endorse Verify more
strongly, they will provide greater motivation for customers to complete the journey and
increase the success rate further. This is coupled with our knowledge of the
demographic - HMRC“s selfAssessment customer - would enable us to realise a higher
conversion rate (c90%) given the high likelihood that they will have a Passport or a
Driveris License.Achieving 90% will allay concerns and increase confidence in Verify.
e Post Office currently has a Verify market share of 47%, and customer insight suggests
that it can expect a market share of c30% as competition in the market increases.
Based on this and Cabinet Offices analysis of when government departmentswill use
Verify, we have forecast net revenue of £43m over three years.
End User Computing
e The End User Computing (EUC) admin rollout — the replacement of personal comport
equipment - to our Customer Support Centre and Crown Network back office colleagues
has been delayed by 3 months. This has impacted securing closure on separation from
Royal Mail and will require additional cost. An extension to the existing MSA agreement
is being discussed with Royal Mail, as closure of the separation programme is
dependent on completing the rollout. The additional funding required has been
estimated at £8m. In October 2014, the Board approved a minimum capital commitment
of £70m for the provision of our new EUC capability, and the forecast to complete the
programme is now £78m. However, the £70m included a £6m cost challenge as the
agreed business case investment was set at £76m. The additional cost can be funded
from the remaining contingency provisioned in the three-year plan financial profile. The
increase is subject to on-going challenge with our IT business partners and we expect to
reduce our exposure and provide further contingency.
e The EUC branch counter rollout remains on schedule for commencement in January
2016. There is no change to the overall EUC benefits profile.
e The Technology Transformation programme is highly complex and delivery is reliant on
both our new IT Supply Chain members and key existing suppliers who are nowin exit
mode. The EUC element of the programme has added complexity owing to the inter-
dependency on Royal Mail separation. We have recently appointed Deloitte to
undertake a review of EUC so that other transformation initiatives benefit from the
lessons learnt. Al will provide a further update in October.
Sparrow
e Further to my August Update, letters to scheme applicants (not subject to a previous
court ruling) requesting dates for mediation to be put forward to CEDR by 4 September
have produced agreement of 49 applicants to mediation sessions between now and the
end of the year. Only 8 cases have not agreed dates, 5 of whom have confirmed they
are withdrawing from the Scheme.
CEO’s Report September 2015 5
POL00027245
POL00027245
STRICTLY CONFIDENTIAL
e Following the BBCUs inaccurate Panorama programme, a meeting was held wh the
BBCL's most senior news executive, James Harding. This was useful to record, formally,
our grievance and press for balance in potential future coverage by BBC news outlets in
general. We are also making a formal complaint about the reporting in Panorama.
e Colleagues have also had a constructive meeting with the new Chairman of the BIS
Select Committee, lain Wright MP last week. The meeting was followed up with a letter
outlining the rationale for the Post OfficeLis view that any inquiry by the Comittee would
be premature - the investigations of the Criminal Cases Review Commission and the
mediations of almost all other cases need to be allowed to run their course. While the
Chairman understood our position, he was frank about the pressure he is receiving from
some MPs. Nonetheless it is positive to have opened up a dialogue with the new
Chairman.
e That pressure is reflected in an Early Day Motion put down in the House by the CWU-
supported MP for Vauxhall, Kate Hoey, on 10 September. The EDM echoes the
concerns expressed in the Panorama programme and calls for an independent judicial
inquiry. It has so far been signed by 22 MPs, the majority of whom have no case in the
scheme. We are rebutting the assertions in the EDM and and have offered meetings to
all the MPs who signed the EDM. All the Cone to one meetings we have had to date
with MPs with constituents in the scheme have been effective in balancing the highly
selective information shared with them by their constituents.
Public Relations
e Our PR focus has shifted further towards financial services in 2014/15. We will be
launching the Post Office Savings Report from the end of September (w/c 21/9/15) and
into October and November with three strong PR initiatives aimed at driving customer
interest in our savings products. Q1 figures for PR coverage show a 4% uplift year on
year to 92% in positive PR for FS, with 575 articles secured with PR value of £7m.
Travel-related PR also increased in the period (92% to 96%), but there was a fall in
positive coverage for the network at 69% (77%), though negative coverage remains
within target at 5% (compared with 3% in the same period last year).
Transformation Narrative
e Further to the discussion at July's Board meeting, in October, we will be launchinghe
Post Office vision and transformation narrative to the business, alongside a refreshed
internal communications platform to create a drumbeat of communications as we
transform the business. The [One Post Office(i approach will include a new digital
communications hub, regular magazine and weekly updates for all colleagues, a signal
of our commitment to reach to the edges of the business and provide our people with a
clear vision of the future alongside a grounded view of the challenges ahead. The vision
and narrative will roll out with interactive events for our 500 most senior leaders,
followed by a communications cascade and regular updates.
CEO’s Report September 2015 6
POL00027245
POL00027245
STRICTLY CONFIDENTIAL
Charity Ball
e Plans for the first Post Office Charity Ball, to take place in November, are well
advanced. We hope to raise £200k from the evening for Children in Need, with a highly
impressive line-up of entertainment including Kylie Minogue and Michael Mcintyre. Our
target is to sell 100 tables and with 50 already gone, our suppliers are confident that we
will do so. In addition to enhancing our role as a key partner of Children in Need, the
evening will send out a strong message of confidence about the business. It is also an
opportunity to celebrate and strengthen our relationships with partner organisations
whilst looking forward to an exciting future.
4. Update on key change programmes
Introduction
Our Transformation governance structure and supporting processes have been
strengthened. A new control framework has been embedded across the business and
reflects our growing maturity in enterprise-wide programme management. We are also
taking the necessary steps to build the capability and capacity required to deliver this scale
of transformational change. The Executive Team have increased the frequency in which
they review the performance of transformation programmes. This improves visibility of
plans, critical risks and issues; and provides an opportunity for deep dives into specific
areas of concern. Our Business Design activities on the development of a Target Operating
Model are progressing to plan.
Greater awareness of the transformation journey and its impact on the organisation has
been communicated through the launch of the (11000 day” planthe schedule of key
activities to deliver a transformed Post Office by March 2018. This will be supported by a
concerted communications campaign designed to fully engage our senior managers and
their teams in delivering our plan.
Transformation Dashboard
Overall Delivery Cost Benefits Risk
RAG Progress
Overall
Transformation
Delivery — Detailed planning activity is underway to develop and agree a fully integrated
plan, this is a consolidated view of all key transformation milestones and inter-
dependencies. The integrated plan is due to be baselined at the end of September.
Cost — Year to date spend is currently behind budget although a number of larger
programmes are now mobilised therefore the underspend is expected to reduce throughout
the year.
Benefits — Good progress is being made on in year costs saving initiatives with £29.3M of
savings on track to be delivered against the £30M target for Q2 however there remains a
cost saving benefits gap of £4.75M over the full year. An enterprise Benefits tracking
mechanism is in development and is due to be implemented in October. This will give more
focus and visibility to track benefits across the programmes
CEO’s Report September 2015 7
POL00027245
POL00027245
STRICTLY CONFIDENTIAL
Risks — A Risk Management approach has been defined and is being integrated across all
programmes. Currently, 50% of the total Portfolio risks are deemed as “high” risks. This is
expected as we are at the start of many programmes and mitigation plans have not been
fully developed.
Network Programmes
As at the 28th August the Network Transformation programme is reporting 404 new
contracts signed in year (121 Mains and 283 Locals) and 621 new model branches open in
year (225 Mains and 396 Locals). This takes the overall number of contracts signed to 5509
and the total number of new model branches open to 4718. The pipeline of volunteers, as
predicted, has significantly slowed during July and August and the programme is now
behind target for contracts signed.
Business agreement was reached on our approach to the remaining branches and letters
were sent to them on the 13th July outlining their options. The programme is currently
flagging a risk of c.350 branches against the 2015-16 branch opening target of 1850. An
updated forecast will be provided in October. The ability to achieve the target will be
dependent upon the number of postmasters that agree to convert and sign new contracts
by 31st December.
The Crown Network Development Programme is investigating options for 66 loss
making branches. The Crown network is on schedule to achieve run rate break even
by 30" September 2015 and overall break even by 31°' March 2016. This is, however,
dependent on our being able to take a provision for onerous contracts.
The Front Office programme, which will deliver a new Point of Sale (POS) application, is
nearing the end of mobilisation. High level design has been completed with detailed design
underway and on track to be completed by the end of September. The programmet!s focus
has been to build the delivery team, establish and embed business led governance and the
development of a baseline plan. The plan will align the Post Office business readiness
activities to the new supplierLis (IBM) delivery plan. It will alsalefine the dependencies on
other programmes. The Front Office plan will form the back bone of the overall
Transformation integrated plan and will be baselined by the end of September.
Technology Transformation Programmes
The revised Business Case for the End User Computing activity, which replaces the POS
and admin hardware (laptops, printers etc), was agreed by the Transformation Executive
Steering Group on the 1°' of September, see section 3 for more details. Deployment of the
POS hardware is dependent on a Fujitsu IT change to allow the current Horizon application
to run on the new hardware. Confirmation of this Fujitsu change will be received in early
October. The admin hardware roll out is due to start with a pilot on 224 October.
The IT Network programme will implement a new IT and communication networks for our
branches and our Customer Support Centres. Verizon are our new business partner
replacing incumbent suppliers BT and Fujitsu. To minimise disruption and to reduce cost we
are planning the branch implementation will be delivered alongside the EUC hardware roll
out.
CEO’s Report September 2015 8
POL00027245
POL00027245
STRICTLY CONFIDENTIAL
The Back Office contract will provide a new supplier to host all our back office platforms.
This is the final major procurement in the new IT Supply Chain — see section 1 for
recommendation to award preferred bidder.
Overall across the IT programmes costs are within budget and benefits are on track. The
EUC costs continue to be subject to negotiation with our IT suppliers. Some key risks exist
between Front Office, EUC and the IT Network programmes. A major challenge to the
programme will be the management of our IT supplier base, as the complexity of the
programme has increased due to the all major IT suppliers exiting at the same time we are
on-boarding our new business partners.
For the Separation Programme four worksteams are left to close, one of which is Admin
EUC, with the others being HR, IT Supply Chain and IT Networks. Final separation is due to
complete early January 2016. The Master Services Agreement agreement supporting the
revised timeline will be agreed during September.
Reducing our Costs Programmes
The programme continues to work with business functions to ensure there are robust
delivery plans to realise the benefits and additional cost saving opportunities are identified.
The Support Services Transformation Programme has been initiated following business
case approval in July. It is focused on the design and implementation of the right support
structure to deliver effective and efficient support to our postmasters and in-branch
colleagues at minimum cost. We will close three support centres by April 2016; there are
eight sites in total and our objective is to move to one or two. The programme benefits are
c. £20m over 5 years with c. £5m annualised from 3 onwards.
Commercial Portfolio Programmes
Post Office Card Account service to DWP is on track to implement the new supplier
solution by the end of March 2017 and contract signed before Christmas 2015. The
Competitive Dialogue phase is currently underway and will complete with Board approval to
the preferred bidder in November.
The Post Office Mobile prepaid offering has now been launched online nationally and via a
branch pilot in 212 branches in the North West of England. The Mobile business is in the
early stages of a six month Trading Pilot. The launch of 4G and Post-paid (pay monthly) will
now follow the decision for national branch launch in January 2016.
The Winning with Retailers programme is currently in the design phase, following budget
approval in May. This phase includes identifying business requirements, high level design
of the Access Point solution, developing the remaining areas of the commercial proposition,
and planning for implementation. Work is currently on track and within budget, and a
revised business case is scheduled for review at the October Transformation Executive
Steering Group.
CEO’s Report September 2015 9
POL00027245
POL00027245
STRICTLY CONFIDENTIAL
Financial Services Programmes
Project Hawk — as highlighted in section 1, the acquisition of the Bank of Ireland's share of
the Joint Venture Insurance Business into Post Office Management Services (POMS) is
nearing completion and is on track to achieve the POMS go live scheduled for 1st October
2015.
People & Engagement
People & Engagement activities are progressing with a significant milestone achieved in
August with the New CWU Collective Engagement Framework being put in place. The
revised CWU representative structure will go live in September. Industrial relations risks
continue to be closely monitored.
Further progress has been made in developing the communications plan and the narrative
to underpin our transformation journey. A communications programme is in place with
engagement events starting in September and continuing in October and November.
5. Market, political and external developments
The convenience store sector continues to grow
e The Association of Convenience Stores Local Shop Report 2015 has revealed that the
total value of sales in the convenience sector in the year to April 2015 was £37.7 billion
with turnover growing by 5% over this period. There are now 51,524 convenience stores
across the UK, compared to 50,747 last year. This marks a net growth rate of over two
shops per day. The report stresses the wide range of services offered; 53% of
convenience stores offer bill payment services, 53% have EPoS and 27% have a loyalty
card. The report also showed that the presence of a Post Office was identified as
having the most positive impact on a community; and that Convenience stores and
Post Offices are the two services deemed to have the most positive impact on high
streets by consumers. A Post Office was the third most wanted service in the local
area behind specialist food shops and banks respectively.
The UK has seen a large rise in contactless payment methods
e Asurvey for Lloyds Bank shows that a quarter of people in the UK think they will no
longer need cash in five years' time. The forecast comes amid the growing popularity of
mobile payments and contactless cards. MasterCard says there has been a 560% rise
in payment values using the cards in the last year, while Barclaycard says the figure has
trebled although the technology is still relatively new so the increase in payment values
comes from a low base point. Barclaycard also says contactless cards are most likely to
be used in supermarkets, then restaurants and public transport. Those over 50 account
for half of all contactless payments, with 20% of them over 65. August 2015 also saw a
rise in the payment limit of contactless cards to £30. Apple launched its contactless
payment service, Apple Pay, in July; the service is already available at around 250,000
till points nationwide with the number expected to rise sharply in the coming months.
CEO’s Report September 2015 10
POL00027245
POL00027245
STRICTLY CONFIDENTIAL
Consumer attitudes to bank account switching are changing but established banks
are still the most trusted
e The number of people switching bank accounts rose by 4% year-on-year in the year to
30 June 2015, according to figures published by Bacs. A total of 1.1mn people switched
bank accounts, compared with 1.06m a year earlier. New rules were introduced in
October 2014 to make switching quicker and easier. Bacs said 69% of consumers were
now aware of the switching scheme. Barclays and NatWest lost the most customers,
while Santander and Halifax gained the most new customers. Despite the rise in
customer awareness of switching a survey of 2,000 consumers by MoneySuperMarket
found that consumers trust established high street banks more than alternatives. Some
28% of respondents gave Barclays, NatWest and Santander a trust score of at least
eight out of ten.
Competition in the mails market is being driven by convenience and price
e Parcel delivery comparison website Parcel2Go.com has launched a new delivery
pricing option for small items. The new service will apply to small items weighing up to
and including 1kg, which can be sent across the UK for £2.16 ex. VAT. Meanwhile
Doddle have announced that they will soon start a five-week trial project which will
involve using neighbourhood agents to deliver parcels. The agents are to be people who
work from home and are available four nights a week between 18:00 and 22:00 to hand
over parcels. A new fulfilment initiative has also been launched by Doddle. The firm
has unveiled Doddle Runner, a new snap and send parcel service. Pictures of up to five
items to be sent can be taken by users of the smartphone app and the parcels are
personally collected by a runner within an hour of the order.
Internet-only stores to overtake retail giants’ online sales this year
e Sales made by internet companies without physical stores, such as Amazon and Asos,
will surpass online sales of store-based UK retailers for the first time this year. So-called
“etailers" are expected to generate £21.8bn-worth of sales in 2015, an increase of 18pc
from last year, while traditional stores should grow their online sales by 11pc to £21.5bn,
according to a report from market research firm Mintel. Despite this, Amazon has
announced that it will no longer be delivering to Collect+ stores from 24 August.
However it has stated that customers can now get free standard delivery to any of its
13,000 UK Pickup Locations.
CEO’s Report September 2015 11