A study of the parcel delivery sector in Ireland

Today the Commission for Communications Regulation (ComReg) has published a report, prepared by Frontier, on our study into the parcel delivery sector In Ireland. This was prepared in association with our research partners, Behaviour & Attitudes (B&A).

Since 2015, the Irish parcel delivery sector has experienced significant growth. Our study found four key trends that have been impacted the sector.

  • E-commerce is driving the observed growth in demand for parcel delivery services: Consumers are now buying more online, while sellers are increasingly prioritising their online sales channel. Cross-border e-commerce is also a significant driver of growth.
  • Price and reliability remain the key customer requirements: Price and reliability remain the most important senders requirements for parcel delivery services. However, other needs are emerging (e.g. tracking/technology). Delivery cost is also the primary consideration for consumers when they are selecting delivery options for online purchases. Operators show a good understanding of the needs of senders and this translates into high level of satisfaction amongst e-commerce companies and SMEs.
  • Increased price competition between operators has driven prices down: Delivery prices are largely based on negotiated discounts on standard price lists. While price competition has been intense over the last years, it appears to have softened during COVID due to capacity constraints.
  • The COVID-19 pandemic has led to a surge in online sales and e-commerce demand: Many e-commerce companies found themselves unprepared, and considerable pressure has been put on parcel delivery networks, leading to increased issues faced by e-commerce sellers and consumers. However, feedback is that it has also opened up new opportunities – e.g. broadening of online demographics, new product solutions, etc.

Our study concluded that:

  • the market appears to be highly competitive;
  • operators appear to have a good understanding of the need of e-commerce sellers, and sellers demonstrate a good understanding of consumers’ needs; and
  • operators and e-commerce sellers have adapted well to the challenges posed by the COVID-19 pandemic.

The market expects elevated sales levels to continue in the coming years. Key challenges, however, will arise from:

  • the required investment to facilitate the sustained growth in e-commerce; and
  • increased competition from vertically integrated e-commerce platforms (e.g. Amazon).

The study was based on primary and secondary research, including surveys and interviews with parcel operators, e-commerce sellers and consumers.

Read the full report here.

Frontier regularly advises on postal and delivery market issues, and digital market issues across Europe.

For more information, please contact us on media@frontier-economics.com or at +44 (0) 20 7031 7000.