Decade of Developing Parcel Lockers. Estonian Omniva Experience

Parcel lockers are insanely popular in the Baltics. How did we achieve / do it?

In 2021 over nine million packages from companies were delivered to parcel machines in Estonia. This is a significant number, considering that there are only 1.3 million inhabitants in Estonia altogether. Roughly divided, it means that every single person from a baby to an elderly person ordered a package from a retailer via the internet seven times last year! Last years’ spring months have brought us parcel volumes similar to what we were used to seeing during the Christmas season.

"The rapid growth of e-commerce and labor-related problems will continue challenging the service level and profitability of retailers and service providers globally"

E-commerce is booming everywhere across the world. Out-of-home (OOH) delivery, including pick-up and drop-off points and automatic parcel machines (APM), is playing an increasingly important role. But we at Omniva are confident that we were actually ready for the boom. Truth be told, we have been preparing for this for over a decade. Let us share our experience – we have come a long way from designing our automated parcel machines from scratch to modernizing and fine-tuning them constantly while also delivering them across the Baltic countries and beyond. At the moment we are operating 770 machines in three Baltic states, being the market leader in Estonia and owning a dense network in both Latvia and Lithuania.

And yes, Estonians do love their APMs. Last years’ out-of-home parcel delivery survey showed that APM’s popularity increased everywhere during the Covid health crisis, but its popularity is nowhere as high as it is in Estonia, where a staggering 84 percent of e-shoppers prefer parcel locker deliveries (next ones up are 55 percent in Lithuania, 53 percent in Latvia). One of the reasons is probably the high density of the machines – adding up all Omniva’s and our good competitors’ APMs, Estonia tops the ranking of EU countries for automated parcel machine density by a huge margin – there are over four APMs per 10,000 inhabitants.

 Finland follows with similar figures and Denmark ranks third. So, APMs are still a vastly untapped option for increasing OOH density and capability in most EU countries. The statistics signal a great potential for a very fast expansion in the coming times in response to the new normal for B2C parcel delivery.

Omniva, the international logistics company, has over 100 years of history as a state-owned postal company. For most of the years, we have operated under the name Eesti Post – Estonian Post. Now, for over a decade we have taken our activities beyond the borders of our home state: the whole of the Baltic region is a domestic market for us. We make business simpler and faster and when it comes to APMs, we also have the know-how. Covid crisis assured us that we have made some good decisions about the locations and machines’ interface. For example, we decided from the beginning that Omniva’s parcel machines will be outdoors – so they can be accessible regardless of the time of day or day of the week. In a health crisis it became one of our crucial success elements – outdoors means there are fewer people around and the risk of infection is lower. Also, the touch screens of the parcel machines are cleaned daily, but our APM screens are designed to be used without physical contact, i. e. they work with your gloves on, and contactless payments are available in all parcel machines.

Omniva’s APMs are put together from modules of different sized lockers so they can be adjusted depending on specific location and user statistics. 

That way we can offer our services anywhere - we have seen that parcel machines help launch local e-commerce ventures in smaller settlements. Talking about location, this is the really tricky part (where we, of course, also have loads of experience). 

We have concluded that APMs are user- and time-friendly when they are located “on the way to home”. We’ve had some oversights there, too. For example, installing an APM in front of the largest department store in Estonia did not work out well and we couldn’t believe the stats at first. It was then that we realized that the locker was just not located on people’s way home, so they did not want to order their packages there!

We thrive to make our customers’ lives easier. Last October we introduced a new solution, which enables one locker to store several different parcels ordered by the same individual. Thanks to this smart development we can store up to 15 percent more parcels.

But the possibilities for future developments in the APM business are endless. In the near future, the key actions for us are improving our track&trace system and surge pricing/dynamic pricing model for faster deliveries measured in days or even in hours. Omniva is also on its way to becoming an IT partner for companies outside the Baltics, thus delivering its APM’s know-how even further. We have entered into an agreement with Hrvatska Pošta for the use of our parcel locker software and a network with 300 parcel machines that will be established in Croatia by the end of 2022.

The rapid growth of e-commerce and labor-related problems will continue challenging the service level and profitability of retailers and service providers globally. Omniva’s comprehensive parcel machine product has proven its cost efficiency, scalability, and improved customer experience.