Mail volume slips as retailers embrace mobile marketing

‘One’ Salmat exits low-return letterbox distribution while posting increased profits in customer contact and targeted media.

SMS and email marketing provide the technology high points in Salmat’s half-year results. According to Grant Harrod, CEO, mobile technology is increasingly being used to drive instant customer feedback.

“Email and SMS both continue to gain legitimacy as a channel, with retail and corporate clients increasingly using them as part of their targeted marketing program,” he said. “As a result, Salmat has expanded its offering by developing new products for these sectors.”

The products fit into the company’s multi-channel communications capability, which includes addressed and unaddressed mail, email, SMS, on-line, voice and non-voice.  “As we continue to evolve our One Salmat model, the ability for us to offer clients such a broad spectrum of services offers real benefit in dramatically improving their marketing return,” he said.

Posting 22% profit growth to $24.3 million on a slightly lower revenue base, the leading customer communications company continues to promote its three different business divisions as a single source. Only essential and discretionary mail cast a shadow on otherwise buoyant results. A 4% reduction in underlying volumes resulted from DM mail following the slump in overall economic conditions. There were similar results in the area of credit card statements.

On the other hand revenue within the e-Solutions area, which includes online archiving and electronic data delivery of documents, increased by 8.8% and volumes doubled off a low base. This plays to Harrod’s belief that the company’s future direction will involve greater emphasis on electronic delivery.

However the company’s traditional cash cow of catalogue delivery is going gang busters. Salmat has enjoyed a winning year in the catalogue space, picking up Coles contract from PMP among others.

“We have seen organic growth amongst our existing client base, as they increasingly view catalogues as a media of choice. The undeniabillity of this channel to drive sales has seen retailers increase frequency of distribution,” he said. “In addition, the ability to segment delivery to suit a specific demographic has led to an increase in uptake by retailers.”

The vulnerability of DM mail to economic conditions underlines the discretionary nature of the channel. No longer perceived as a ‘must do’ unaddressed DM mail is becoming increasing sidelined in the marketing mix.

As if to emphasise the shift, Salmat’s venture into internet pre-shopping with its portal site, Lasoo, continues to gather pace attracting 1.7 million visitors to the site pre-Christmas.