“Currently, InPost’s parcel lockers operate on 4 continents, including the following countries: Great Britain, Italy, Poland, Ireland, Iceland, Lithuania, Latvia, Estonia, Czech Republic, Colombia, Australia and Saudi Arabia. More than 7,000 InPost automated parcel machines are globally available in various business models.“
GP: Any lessons learned from the experience related to the international markets expansion?
RB: In some markets we are only selling the technology, providing the know-how, making the technology available in other courier or postal organizations. This can be very successful, just like we witnessed in the Baltic countries, where we sold our solutions to the Estonian Post. Based on our solutions, the Estonian Post has managed to dominate all 3 Baltic countries with our lockers.
In other countries, we set up our own business, like in Russia or in Ukraine and we failed. We decided to cancel operations there and bring the machines back to Poland. In some countries like Poland, Italy and the UK, we are continuously developing our solutions.
As we noticed, in each and every single country there are certain market specifics: for instance, the click-and-collect networks represent a very important channel in the UK. This includes several thousands of points where people may pick up their parcels, and they are already educated to do it themselves. Whereas in Italy this is completely unknown, which brings another challenge: you need to educate consumers even from the beginning, just like we did in Poland actually.
“When we started our locker solution, there was no click-and-collect solution at all for e-tailers.”
I think it is very important to identify the risk profile in certain markets. If you miss something, (in our case, good couriers in Russia for parcels delivery to our lockers), you will simply fail. People, market conditions, the competition landscape – all these are different from country to country and there are so many factors which play an important role in this context.
Also, there is a link in terms of market dynamics and specifics. Going back to our Russia example, we have executed our project in the wrong way because of the wrong local partners and this is why we failed. The same goes with every single business which operates abroad:
“When you are successfully managing your own business in your own market, do not simply make the assumption that all the other markets will behave in the same way.”
GP: Just out of curiosity, is the service also available in Romania (or is this country on the list, in the near future)?
RB: It is not, but we are very interested in this market for two main reasons. First of all, it is a fast-growing one, but also there are not many international players successful yet. But as for now, there are some small pilots done in Romania by other competitors, but not very successful, as I have learned.
GP: What about Poland? How would you describe the market and its openness levels to new ideas or businesses?
RB: A correct statement regarding the Polish market is that the country is a new trend-setter as far as new technologies are concerned. To back up this statement, we could start by mentioning the popularity of plastic cards and then the NFC payments, now the very-fast growing saturation of BLIK and the list could go on. As for payments, our market is pretty similar to the Baltic countries, where something becomes “the new trend”, then getting more and more popular and fast-growing. I also believe the success of lockers – which was already demonstrated on a big scale here in Poland – is an outcome of these very specific early adopters.
GP: Delivery by drones and planes, in-fridge delivery services, etc. What do you think: is consumer/ market attitude towards such technology a matter of slow adoption, (lack of) openness to new approaches, or has delivery innovation gone (already) one step too far?
RB: I think our society is pretty open to new trends, but from the commercial point of view, drones will never be competitive or stable enough. The reasons? The immensely, fast-growing, already huge volume in every single country and also the fact that the best solution for the consolidation of traffic is the locker (fully automated).
I am not afraid of this, such technology is very expensive and if someone can imagine 50,000 drones circulating and delivering parcels in London (because this is the need for today), then I wish him/her good luck. I can’t imagine this kind of scenario.
GP: In your opinion, how are new technologies (AI, machine learning, blockchain) transforming the delivery industry?
RB: As long as the parcel is physically prepared, must be delivered and the technology from Star Trek of the “de-materializing and then re-materializing in-house” type is not yet invented, then I do not see a big influence.
AI for example may help in terms of forecasting what you want to order, so definitely such technology will be more and more helpful in letting you choose the right goods. But in the end, the goods must be delivered and the physical delivery still remains physical.
We may imagine different scenarios involving driverless cars and a robot delivering the parcel, but this robot will make maximum 100 stops per 12 hours. Whereas with our lockers, people may pick up nearly 1,000 parcels during a day, so there is a massive efficiency difference between the new tech solutions and the existing ones.
“There is a massive efficiency difference between the new tech solutions and the existing ones.”
GP: On a similar note, the whole business world is obsessed with blockchain now. What do you think about this technology, do you see any application of this technology in your business?
RB: We haven’t considered blockchain yet, we prefer to look at other trends that are maybe applicable to our business or may help us improve our operations and their efficiency. Blockchain is definitely not on the agenda, at least when it comes to the logistics part of the business we are running.
GP: What other innovations might bring about further change? What does innovation stand for, in your opinion?
RB: Innovation is the direct solution that solves problems, obstacles or bottlenecks. Sometimes, it can be just a small thing that brings massive improvement, or, of course, much more complex. Our solution is very expensive, but as a process it has been innovative, based on the following concept: just let the people pick up the parcels, don’t let them wait for the couriers. It is so easy as a process, however much harder to implement using innovation.
For our solution in particular, we have managed to break costs down, together with our IT department and the production team. As a result, the new machine will be steered from the app, there will be no screen, just screenless ATMs and users will be opening the box just by using the mobile phone. We consider this an improvement, since the real innovation was the process itself and the first machine.
“Looking for problems and finding very pragmatic solutions – that’s what innovation should look like. “
GP: Among the countless technologies available on the market, which one(s) do you think is/are the most promising for future developments in payments / eCommerce and why?
RB: In my opinion, the payment systems are a commodity now and I see many interesting trends. However, for me, the key process is 1 click, 1 payment and delivery.
I still remember how long it took me some years ago to book a hotel room on Booking.com and how long it takes today (1-click reservation connected to the payment and everything goes through my mobile). This is actually the future. A payment system that offers the best UX and shortest payment process – timewise, of course – will eventually dominate the market.
About Rafal Brzoska:
Mr. Rafal Brzoska founded Integer Group in 1999 and has been its Chief Executive Officer and also President since then. Mr. Brzoska is the founder of InPost (2006) – one of the biggest private postal operator in Europe.
He initiated the launch of InPost parcel lockers, automated terminals enabled the self-service collection of parcels 24/7 from convenient locations, revolutionising both the Central European and international postal, eCommerce and courier markets.
In less than 5 years, Mr. Brzoska’s bold embrace of technological and business innovation and strategic vision had transformed the eCommerce and courier industry in dozens of international markets, thus revolutionizing and rediscovering the potential of this rapidly growing sector of the global economy.
His visionary skills and broad business perspectives enabled him to gain a reputation among the unquestionable new business leaders in Europe.
The first part of this interview, which provides insights into Paczkomaty’s business model, structure and functionalities can be found here.