Royal Mail starts another review

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Royal Mail has launched yet another statutory review of its direct marketing business less than 18 months after it reappointed Proximity London to the account – estimated by some to be worth up to £8m.

The appointed agency will work on the account for four years and will be responsible for all of Royal Mail’s direct mail, sales promotion, design, strategic planning and any other integrated services.

Beta remains the incumbent on the integrated advertising account.

The move comes just six months after the postal operator relaunched the Mail Media Centre as MarketReach, installing former Carlson (now Aimia) boss Jonathan Harman to spearhead the operation.

Timing is also crucial, with pressure mounting on the business to show its viability to the City; privatisation is pencilled in for later year. Business customers remain the key focus for chief executive Moya Greene as the Universal Service continues to prove a drain on resources, while it loses money on every letter it delivers for rival operators in the so-called ‘final mile’.

One ray of sunshine is the rise of online shopping; Royal Mail recently revealed plans to create 1,000 new jobs as part of a £75m investment over the next four years. Last year, parcels accounted for £4.2bn of Royal Mail revenue – nearly half of the company’s turnover – growing by 10% year-on-year, with domestic parcels bringing in £2.6bn.

And a recent study, carried out by Royal Mail Parcels, revealed over half of SME e-tailers saw an increase in sales in 2012, while two thirds (64%) are confident sales will rise further in 2013.