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Newspaper Estonian Free Press is writing about SmartPOST

12.02.2010

SmartPOST: the Explanation of a Success

Starting from the article we published one week ago presenting the plans of the Ministry of Social Affairs for boosting the Estonian labor market, we decided to take a closer look to SmartPOST. It is one of the most successful examples of Estonian startups to keep an eye on over the next years.

Officially launched in April 2009 the company started immediately to hit the market strong. It involved starting capital of around two million Euros participated by the state-owned Development Fund (that has a 15% stake in the company). Added an aggressive advertising strategy to it and based the businees on an idea that took only few months to gain an impressive popularity.

Simplicity is still the key

Starting with this easy but often forgotten business principle, SmartPOST started its activities almost one year ago. At first, producing automated parcel lockers with the goal of create a network able to cover the whole country. Now less than twelve months later, 36 lockers started appear all over Estonia. SmartPOST is gaining popularity, we discussed with Peep Kuld, member of the SmartPOST supervisory board.

The lockers enable people to send and receive packages. They are located in shopping-centres with long opening hours he explained us. The person receiving a parcel gets an SMS and can pick it up whenever he or she sees fit. They do not have to set the schedule according to post office working hours. People can avoid lines and pick up parcels while buying groceries, for example.

In other words, something that sounds like sending and receiving anything via ordinary mail bypassing the postmen. Thus making the whole process more suitable to anyone’s schedule. Something that sounds interesting at least. If it would not be for the fact that doing everything interacting solely with some machines might not sound too sexy for many old fashioned people. For example those who used to interact with the people at the post office desk.

An objection, this one, that is somehow confirmed by Mr. Kuld. He explains A good parallel for this is the ATM. 10 years ago people were sceptical about getting cash from a “hole in the wall”. Nowadays most of us don’t see any reason for going to the bank office for that reason.

Point scored, I agree.

Keba DHL came first

The service introduced in Estonia by SmartPOST is not the first of its kind. An Austrian company named Keba and connected with the German DHL already offer a similar service since before its Estonian so to say replica but, apparently, with some differences. Differences that in the long term could turn to great advantages for the one based in Viljandi.

Some of them are purely technical, as Peep Kuld shows. The products realized by Keba are made as standard-size lockers. SmartPOST produces modules, which can come in basically any shape or size. These can be enlarged or made smaller if the necessity arises.

While some other ones are more linked to a different way of looking at the service since the German structure seems now to be threatened by the dynamism and desire of simplicity of their –potential- Estonian competitors.

DHL requires customers to register before using the service, SmartPOST in Estonia does not. This is probably also one of the main reasons that a completely new service provided by a completely new company has become so popular in just over a year and this, added to the cuts on costs realized by choosing to produce only lockers for indoor use might be one of the strategic keys for the development of SmartPOST.

What now?

The first month of its life already brought quite some satisfactions to the management of the company -and its investors – since at the end of 2009 SmartPOST has been rewarded with the Logistics Deed of the Year 2009 award.

The service really took off in December, when about 33 000 parcels were sent via SmartPOST

stated Peep Kuld.

That is the same amount that was sent in the previous 6 months combined.

And this seems to be only the beginning since in the plans of the management of Smart Post there is also the idea of a concrete development also outside the Estonian border. The first locker has been set up in Milan, Italy as a pilot project and a service enabling sending parcels from Estonia to Finland has just been launched, Kuld said.

Obviously it is in SmartPOST’s interests that different companies around the world would launch such networks, he continued. In order to stimulate that SmartPOST has taken a different approach: unlike any other producer or provider of this kind of system or service, SmartPOST is the only one that has both developed its own technology and also works as a service provider. The domestic market is basically used as a laboratory to tweak different technical and service aspects of the system.

Post and Social Media?

Profiting of the Estonian natural inclination of getting attracted and involved by what happens on the virtual world of internet, SmartPOST also adopted an “unusual” marketing strategy for the segment it works in, trying to gain popularity and trust through an highly committed social media campaign that made immediately SmartPOST Facebook page the most popular between all the Estonian commercial ones with already almost 8.500 subscribers.

Facebook and social media in general is definitely an important and potentially cost-effective way of communicating with the consumer

Peep Kuld said.

But it is a myth that social media is cheap. It is not if you want to do it right. What is true is that the resources spent on social media are more easily interchangeable: you can get similar results by spending less money and more time on it. But for tangible success, both are needed.

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