Today’s postal strikes are set to cause misery for many British businesses. However, few operations will be as affected by the strikes as the hugely popular Lovefilm, who offer a rental-by-post movie DVD rental service. The company are set to face postal misery due to their reliance on the Royal Mail network, and some of Lovefilms emerging competitors are hoping to take advantage of this issue.
With the Royal Mail failing to come to an agreement with the CWU, national strikes are due to commence on Thursday and Friday, crippling the national mail network. Many postal order businesses are going to be heavily affected by the strikes, and all business have been warned to expect severe delays when sending and receiving post.
One of the businesses that will be most heavily affected by the strikes is Lovefilm, the UK’s leading rental by post operator. With over 1million members, the company rely on the Royal Mail for all outbound and inbound deliveries. The strikes are expected to affect customers receiving movies, and also cause delays in titles being returned to the company. This could cause particular trouble for new users who have taken up Lovefilm’s ‘free trial’ offer. This entitles users to rent movies for 14 days for free, but if a customer fails to return a disc after 14 days they are automatically subscribed to a monthly direct debit. So far, there has been no official comment from Lovefilm on contingency plans they have in place to deal with postal delays.
LOVEFiLM relies on Royal Mail’s standard tariff letter First Class and Second Class services for outbound mail, and its Packetpost service for bulk mailings. For returns it uses Royal Mail’s Returns Management Services. LOVEFiLM sends and receives hundreds of thousands of items of post each week; making three million despatches a month, with packages having up to four disks each.
In the same vein of delivery companies trying to take advantage of the Royal Mail’s problems, Lovefilm’s competitors are trying to seize this opportunity to offer alternative methods of renting movies. The Movie Booth, leading supplier of DVD vending kiosks in the UK and Ireland’ are running promotions over the weekend to try and give movie lovers access to films which may usually be supplied by Lovefilm. Carlos Marco Rider, Movie Booth Managing Director said “Lovefilm are the industry leaders, and will have a massive number of customers expecting to receive films this weekend. Their reliance on the Royal Mail will affect their distribution, and with The Movie Booth’s growing network of national kiosks we hope to be able to ensure people have access to their favourite movies this weekend”.
Simon Morris, Lovefilm’s Chief Marketing Officer, recently said “‘We must be one of the largest users of Royal Mail’s First Class services. Since we began we have seen steady growth, which has been managed in partnership with Royal Mail, and we are grateful for that. Royal Mail is the best of breed in terms of its services. To a large extent we live or die by our service”. Whilst the Royal Mail strikes wont signal the death of companies such as Lovefilm, any further strikes could severely affect these postal-reliant business.
For information on The Movie Booth business opportunity call 0870 1436769.
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