Royal Mail expands parcel locker network with Yeep! partnership

Royal Mail is expanding its parcel locker network through a partnership with the provider Yeep! and also plans to launch its own proprietary network next year.

The postal delivery group, whose London-listed parent company International Distribution Services (IDS) is in the midst of a £3.6 billion recommended takeover offer, is attempting to catch up with competitors in the out-of-home parcels market, whose growth is underpinned by demand for online shopping.

The agreement with Yeep! will give Royal Mail customers access to 1,000 more parcel lockers from January and Yeep!’s network is set to expand to 3,000 by the end of next year.

Martin Seidenberg, chief executive of IDS, which also owns GLS, the European parcel services company, said the latest third-party partnership formed an important part of Royal Mail’s strategy to make sending and receiving parcels more convenient.

The out-of-home market, including lockers, is seen as a crucial growth driver for investors.

EP Group, whose investment vehicle is seeking shareholder and government approval for the takeover of IDS, is understood to believe Royal Mail urgently needs 20,000 lockers, including its own network, at a cost in the region of £200 million to £400 million. EP declined to comment.

Royal Mail’s partnership with Yeep! means that by early next year there will be more than 21,000 locations where Royal Mail customers can send and receive parcels, including more than 2,500 lockers, 11,500 Post Office branches and 5,000 Collect+ stores.

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The partnership with Yeep! comes after an agreement with PayPoint in February to provide Royal Mail customers access to the Collect+ network at thousands of local stores. Last year Yeep! launched the UK’s first battery-powered parcel locker, which requires no groundworks or wiring and can be installed within an hour.

After the Yeep! partnership, Seidenberg, 51, said Royal Mail was focused on introducing its own locker network, exclusively owned and operated by the group, which would probably be in its red branding.

“We don’t have a final number yet, but it will definitely be in the thousands,” he said. “We want to be present in that market and we want to be seen also in the streets … It’s part of us showing that we are innovative and we are going with the trends and we are there for the customers.”