The next five years will be challenging as the shift by businesses to digital communication intensifies.
New York, NY (PRWEB) November 10, 2014
The Packing and Shipping Service Franchises industry has struggled to gain traction over the past five years as more businesses and households are increasingly engaging with digital communication, thereby lowering demand for a breadth of document and mailing services. Although the economic environment for small businesses since the recession and the threat of e-commerce and similar industries has facilitated greater price-based competition, translating to weak revenue growth. “The increasingly digital business environment has eroded demand for printing and photocopying services, as businesses opt for more secure and convenient online transactions,” according to IBISWorld Industry Analyst Andy Brennan. As a result, in the five years to 2014, industry revenue is expected to grow at a flat annualized rate of 1.3% to $3.8 billion. It is expected to be another tough year for the industry, with revenue projected to fall 1.1% in 2014.
The industry is dominated by the UPS Store, which has more than 4,000 locations and holds an estimated 53.6% market share in 2014. The UPS Store, a wholly owned subsidiary of United Parcel Service, Inc. (UPS), is one of the largest franchise networks in the United States and offers consumer and small businesses a range of services, including shipping, printing, photocopying, mailbox rentals and marketing assistance. “The UPS Store franchise relies on the size, speed and convenience of UPS's network, which delivers more than 15.0 million packages a day around the world,” says Brennan. However, the number of UPS Store retail locations, as well as the majority of its competitors in this industry, has declined over the past five years as some of their traditional services have become irrelevant due to the rise of e-commerce.
The next five years will be challenging for packing and shipping service franchises as the shift by businesses to digital communication intensifies. Successful franchises will need branch out into value-adding services that draw small businesses into their stores as businesses and consumers seek more economical options to ship domestic and international packages.
For more information, visit IBISWorld’s Packing and Shipping Service Franchises in the US industry report page.
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IBISWorld industry Report Key Topics
Establishments in this industry provide parcel packing and shipping, mailbox rental, other mail services and office support services. Reports in our Business Franchise collection focus solely on the operation of franchised outlets and exclude nonfranchise data. They show the total number of franchise outlets, total franchise revenue and the average profit margin earned by franchisees. Our reports also highlight the largest franchisors by market share.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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