Royal Mail set to boost door drop business after CWU deal
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The Royal Mail could double its share of the door drop market following the agreement to lift the limit on the amount of unaddressed mail it can deliver.
As part of the deal brokered with the Communication Workers Union that ends a long-running dispute, the three items per household limit that the Royal Mail was restricted to has been abolished.
A Royal Mail spokesman says the deal will enable it to “compete more effectively with competitors to increase our market share”.
Postal broker PostSwitch.com, which values the door drop market at over £500m, says that the deal could help the Royal Mail lift its share of market from 25% to 50%.
Chris Phillips, market analyst at PostSwitch, says the Royal Mail’s growth opportunity lies in targeting areas unavailable to rivals such as TNT Post.
Mark Davies, managing director of TNT Post’s door drop media business, says:”The deal widens the availability of an already popular channel and helps mitigate against the loss of distribution channels like free newspapers.”
The deal between the CWU and the Royal Mail also sees postal workers awarded a 6.9% pay rise over the next three years and ends the threat of further strikes following a series of walkouts over pay, jobs and modernisation last autumn.
David Ellison, marketing services manager at ISBA, says: “The agreement is a step in the right direction - if it is ratified by CWU members.” He adds that ISBA wants a long-lasting agreement so that its members can plan direct marketing and integrated campaigns with confidence.
Readers' comments (5)
Anonymous | Wed, 10 Mar 2010 12:43 pm
As it is, I am sick to the teeth of the unsolicted junk which comes through my door. the total irrelevance of the tree-murdering guff is outstanding.
I am 34 years old and live in first floor flat.
As it is, i get deluged with: insurance for over 50, conservatories, Stair lifts (internal), funeral offers and much much more. I signed up to the mail preference service and unfortunately this unsolicited crap is immune. If in doubt I am a marketer.
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Jo Bell, Mortascreen | Wed, 10 Mar 2010 12:46 pm
The recent announcement by Royal Mail of plans to abandon the number of items of junk mail delivered through our letter boxes is concerning. I agree that unaddressed flyers and leaflets can be irritating. It is important that organisations who participate in direct mail campaigns must make sure current and prospect customer databases are regularly screened, this will help to minimize potential brand damage connected to mailing a deceased person and also reduce the wastage with obvious environmental benefits. For example, there is over 575,000 deaths per year, equating to over 60 million items of direct mail been sent to deceased individuals. Direct mail campaigns continue to be an effective communication tool, keeping in touch with current customers and also attracting new ones. With over 60 million items of direct mail being sent to the deceased every year, the direct mail industry must continue to uphold best practice.
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Anonymous | Wed, 10 Mar 2010 1:32 pm
I agree that unsolicited junk mail is annoying, but I hope that people remember the blame is with the marketers who produce these items, rather than Royal Mail who are delivering them.
Royal Mail is a business and cannot be expected to turn down work that would simply go to rivals. If companies want to waste money producing and delivering these materials, the blame is with them.
As Jo says, it is in the best interests of the direct mail industry and the reputation of the company for mail to be well-targeted. That's the message we should be sending - fighting Royal Mail is a waste of time.
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Simon Boswell | Wed, 10 Mar 2010 10:20 pm
Personally I'm all in favour of reducing the amount of junk mail pushed through the letterbox: its a waste of money as much as anything else.
To do so we need RM to be flexible and innovative; lets hope this deal gives the RM management the opportunity to be both.
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Graham Dodd | Mon, 15 Mar 2010 10:27 am
I am always staggered at lack of knowledge published in magazines about door drops and some of the comments articles subsequently provoke.
The PostSwitch market value is miles out, whether they are talking distribution revenue as a standalone element, or whether production costs are included.
Refer to the DMA and obtain the truth.
And for those that don't know, direct mail and door drops are different mediums - one is addressed and one isn't.
The Royal Mail cap lifting has nothing to do with direct mail, so any comments relating to direct mail are totally wide of the mark.
That said, door drops, or unaddressed mail, need to be carefully targeted and the very vast majority clients do employ targeting.
The industry continues to introduce new targeting opportunities for clients, so there should be no excuse for badly targeted campaigns.
Finally, one man's junk just might interest somebody else!
Are so many marketers truly wasting their budgets on door drops if they simply don't work? I don't think so.
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