In the early 2000s, we couldn’t have imagined life without waiting in long lines at post offices to pick up parcels. For some Eastern European countries, what has once been a time-consuming process back in the day, is now a 24/7 pick-up-whenever-suitable errand that only takes a few minutes of your valuable time. Last-mile delivery possibilities have changed drastically within the last two decades, especially in the Baltics and Poland, and it’s all thanks to the automation of parcel pickup offerings. Cleveron gives an insight into how entering the Estonian last-mile delivery market looked like in 2007 and how it was possible to gain quick popularity and a market share of 20% within only a year of operating in the business.
The change of last-mile delivery has been drastic and what is elementary today, wasn’t soonly two decades ago. Of course, volumes have risen parallel to the development of the transportation of goods and the shipping network. Today, parcel pick-up is as fast, convenient, and easy for the customer as well as the delivery company itself. Compared to the time when postal services were the number one delivery solution, people couldn’t have imagined that it would be possible to pick up goods within a minute’s time. Postal offices with long queues were the one and only way to pick up packages.
Indrek Oolup, one of the founders and the Head of Business Development at Cleveron, states that the development of the parcel delivery industry needs to be one step ahead. That’s why Cleveron stepped into the business back in 2007 – they saw a problem that was difficult to solve by the postal service company itself. The service needed to be quicker, more efficient, and customer-friendly. Back then it was a utopian idea to automate the process of handing over packages and required an enormous investment to develop such a system. But despite that, Cleveron built its first parcel lockers and started operating as a locker network operator in the Estonian market. They quickly gained popularity and a loyal customer base.
Only 7 days to pick up your parcel? Crazy!
To really comprehend the drastic changes that have taken place in the past few decades in last-mile delivery, we need to take a step back. Cleveron first started operating in the Estonian market in 2007 when last-mile delivery was mostly done by couriers. The popularity of courier services rose, when postal offices were overflooded with parcels and the service wasn’t convenient for the end customer. The main problem with post offices was their opening hours – they were only open during the working hours, causing inconvenience to customers. People didn’t have the possibility to pick up their parcels within that timeframe. At the same time, the postal offices that were opened on Saturdays had long queues with people waiting for their packages.
Cleveron, then operating under the name SmartPOST, was the first company to develop a nationwide network of parcel lockers, bringing an entirely new delivery solution to the market. When the first lockers were introduced to the postal service by Cleveron in 2009, the employees couldn’t believe that people would come to pick up their parcels within seven days, which is the usual time slot allocated for parcel pickup today. Postal offices held parcels for 30 days, which was thought to be the absolute minimum time people would need to collect their orders. The result was unexpected when the first automated solutions were installed and it turned out that seven days were more than enough time for people to pick up their items. Today, the pick-up time has shortened to an average of 2.5 days, which is a clear example of how quickly customers can react when they are given flexibility and convenience.
How did last-mile automation shorten pick-up time so effectively?
Using couriers was much more convenient than picking up orders from the postal office, but the courier service is not a very sustainable solution in the long run. To use a courier service, the customer should plan their day around the courier's arrival time to match with the courier’s schedule. For the company, doorstep delivery means having a fleet of vehicles to deliver each parcel one by one. It also causes failed delivery attempts that intensify the workload for the courier and add costs for the company. With automated solutions, couriers could serve even 100 customers’ orders with one drive. That is a big bonus and a positive contribution to the environment – less traffic in cities reduces congestion and emissions.
Parcel lockers have made pickup much easier in a way customers’ couldn’t have even imagined at the time. Lockers gave people the possibility to pick up the parcel whenever they wanted, even at midnight. That was the key problem with postal services and why they struggled with the 30-day pick-up time.
In 2007, the option for 24/7 automated solutions gained its customer base quickly, giving SmartPOST 20% of the last-mile market share in only one year. The shorter pickup time frame wasn’t a problem for a customer, it was rather an advantage for the retailer – using lockers made delivery faster and increased customer satisfaction by receiving parcels within a minute’s time. Parcel lockers were used as an efficient parcel delivery system, not as a storage unit. Today, every bigger B2C logistics company in Estonia owns a network of automated parcel pickup points. Out of all Estonia’s population, 86% of people have used parcel lockers for receiving and sending parcels making it the most common and convenient way of delivering.
Lockers have played a huge role in last-mile delivery automation in the Eastern European market over the last two decades. The demand for automated solutions has rapidly increased since coming to the market because it helps companies to be more cost-efficient and at the same time offer customers a convenient, easy and fast solution for picking up their goods.