Impact of price and delivery frequency on demand for postal services

WIK-Consult was commissioned by the Belgian postal regulator BIPT to conduct a comprehensive study on elasticity of demand in relation to price and quality changes (delivery frequency) for universal services in the Belgian postal market. In addition to a literature review, the analysis is based on a representative survey of consumers and businesses in Belgium. The survey was conducted in 2019. The focus of the survey was to assess the demand for postal services classified as universal services which are provided by bpost.

Key findings of the survey related to elasticities were that:

  • Significant portions (>60%) of traditional mail communications by consumers and businesses have already been replaced by electronic channels and this trend will continue;
  • Demand for universal services by consumers is still quite responsive to price changes, however less for businesses (most responsive to changes in parcel prices); and
  • For businesses, changes in delivery frequency, and thus speed of delivery, appear to be less important compared to day-certain, reliable delivery. Consumers are more sensitive to changes in delivery frequency compared to businesses.

The Belgian regulator BIPT published the study conducted by WIK-Consult as part of an announcement on April 20, 2021.

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