Tag: UK

The Royal Mail has launched a multimillion pound statutory review of its brand strategy, advertising and direct marketing agency roster.

Current incumbents Abbott Mead Vickers.BBDO (above-the-line), Wolff Olins (branding) and Proximity (DM) will all be invited to repitch for the four-year contracts.

The review is being led by Tom Hings, director of brand marketing at Royal Mail, and comes amid the company’s very public disputes with the Communications Workers Union over plans to modernise operations.

National postal strikes were officially stopped last week but talks continue over pay, pensions, job cuts and working practices.

Last week, the Direct Marketing Association announced plans to significantly reduce the wastage from direct mail in response to a report by the Environment Council into stemming the tide of ‘junk mail’.

The company is facing stiff competition from other postal carriers and the growing reach of digital, resulting in its first financial loss in six years in August.

Royal Mail awarded its GBP 18 million media planning and buying business to OMD in April, after a two-way shoot-out with 10 year incumbent Carat.

Royal Mail postal workers began the first of two 48-hour strikes on Thursday 4 October. The Communication Workers Union, which represents 130,000 members of staff at the UK’s main postal service, opposes modernization plans, which it claims will result in the loss of over 40,000 jobs, longer shifts and a paltry pay packet for their members, who are already treated like slaves, says CWU Deputy General Secretary Dave Ward. The second 48-hour strike started last Monday, with further stoppages expected by mail centre and airport staff early next week. The CWU says it will embark on a rolling programme of strikes from 15 October until the dispute is resolved. According to The Sunday Telegraph, although the immediate cost of the strikes to Royal Mail will be £50m-£60m, it could eventually cost the company up to £260m.

Since the liberalisation of the postal market in 2006, 17 other companies have started delivering post alongside Royal Mail. They have already taken 40 pct of the lucrative corporate mail market and have won Government contracts from the main postal service. Royal Mail claims the failure to restructure has also cost it a recent £8m deal with Amazon, the online retailer. According to Royal Mail Chairman Allan Leighton on a recent edition of Sky News, its rivals in the postal market are 40 pct more efficient; the Royal Mail has yet to move to fully automated letter sorting, for instance. John Hutton, the minister responsible for the Royal Mail, says that “there’s no future for the business if it’s locked into the perennial cycle of industrial action… It is going to lose market share.” Couriergram, the UK-wide telegraph service, has already taken a third more business since the strike started.