In 2012 Maris Kleinbergs was appointed as CEO and Chairman of the Board of the SJSC Latvijas Pasts – designated postal operator of the Republic of Latvia. He started his career in the Foreign Trade Ministry’s state trade enterprise, Latimeks, and has wide experience in the logistics industry, such as in the management of Kuehne&Nagel and the Latvian branch of SIA Avers Centrs.
Innovation and diversification is a major driver for many postal operators across the world in order to keep a competitive edge. Postal Innovation spoke to Maris Kleinbergs, CEO of Latvia Post, to learn how these factors play a significant role in the future development strategy of the operator
What are the major challenges facing Latvia Post in its drive for competitiveness in all postal market segments?
Latvijas Pasts is the only supplier in the territory of the Republic of Latvia that under the current legislation, unlike private merchants, must deliver press and any other correspondence anywhere in Latvia, regardless of the high costs of this delivery in various regions and rural areas. Private post companies only ensure delivery where it is economically-justified – such as to the largest and most economically-active cities, motivating Latvijas Pasts to modernize its existing services, improve their quality, and constantly look for new and innovative solutions to fulfill the customers’ wishes.
How important is innovation as a critical factor to meet the diversifying needs of customers?
As mentioned before, innovation a very significant role in the future development strategy of Latvijas Pasts. To keep the existing customers and acquire new ones, it is important for Latvijas Pasts to maintain a high quality of the existing services, in addition to looking for various new opportunities. As the customers of Latvijas Pasts are essentially all residents of Latvia, it is necessary to offer very varied and different services, taking into consideration the habits and requirements of each customer group. There are some customers that use only the traditional postal services, but also ones that expect constant improvements and regular new offers.
Therefore Latvijas Pasts attempts to combine the traditional and the modern in its work, becoming more and more involved in segments such as transport and logistics services, and providing customers with more convenient methods of receiving the services. Among the growing segments, it is necessary to mention the development of the Express Mail Service of Latvijas Pasts, which was recognized as one of the best in Europe and worldwide in an international audit firm study at the end of 2011. In keeping with the overall global postal market trends, we intend to constantly keep providing our customers with new electronic services.
What are some of the new developments you are introducing in terms of innovative products and alternative channels?
The latest innovative service is the alternative mail distribution network implemented by Latvijas Pasts together with Statoil Fuel&Retail Latvia, allowing customers to choose to receive a package at any Statoil fuel filling station in Riga – on the way to work or home.
In terms of e-services, we are currently offering some customer groups the opportunity to receive delivery notices in electronic, rather than printed form – as a text message and/or e-mail notification. It would be technically possible to implement this system across all mail segments, but unfortunately the current legislation mandates placing a printed notice in the mailbox; Latvijas Pasts has therefore already proposed amending these regulations.
Latvijas Pasts also offers customers the service Hybrid Mail, which allows sending a real letter without leaving the home – by sampling sending the content of the letter in electronic form. Hybrid Mail is an interesting combination of the modern and the traditional, as by using the internet customers are able to send a tangible letter to any place in Latvia, saving their time. We have also developed a new and convenient service that allows checking the correctness of the recipient’s address online. The Address Web Service is an automated address search system that can be integrated in the website of any legal entity, allowing companies to establish a high-quality customer database with correct addresses.
Is Latvia, like other posts, experiencing a decline in physical mail and if so, what new e-services are being developed to embrace the digital age?
With the amount of physical mail declining, new e-services are being introduced and existing ones are being improved: in addition to the above, there is also an online store, manapastmarka.lv, online subscription system, manspasts.lv, etc., which allows customers to receive postal services without leaving their home or office.
Latvijas Pasts is currently working on an innovative system, as part of which we are planning, for example, to develop solutions for large volume shipments via the Hybrid Mail, introduction of electronic payment notices, development of mobile applications – the project is mainly focused on improving customer convenience and facilitating cooperation with corporate clients.
Do you see an opportunity to grow the packet and parcels business in terms of efficient and speedier dispatch and collection?
The pilot project launched by Latvijas Pasts and Statoil currently allows receiving items sent by some catalogue product companies at Statoil filling stations in the capital city. We hope that, along with the development of the project, the number of partners also increases. We also intend to gradually increase cooperation by offering customers the opportunity to receive packages at Statoil throughout Latvia. However, it will be possible to talk about expansion prospects in more detail after the results have been fully assessed.
For faster delivery of packages we are offering Express Mail Services. According to a survey conducted by international audit firm Pricewaterhouse Coopers, the Express Mail Service of Latvijas Pasts was the second best in Europe and among the ten best in the world at the end of 2011.
Apart from technological innovation, what examples do you have of creative thinking for the development of new services that are unique in terms of customer retention?
In the summer of 2012, Latvijas Pasts in cooperation with the most popular Latvian band Prata Vetra ensuring availability of its latest album throughout the entire country at a special price, helping it reach platinum status. In cooperation of one of the largest ticket sales networks in Latvia, Bilešu Serviss, Latvijas Pasts allows its customers to purchase tickets to various events without a commission fee.
In cooperation with a photo company, Latvijas Pasts offers customers the opportunity to upload photos from their computer and receive them in printed form at a post office or their home on the next working day. This also helps customers save their time. In addition, to surprise family and friends, Latvijas Pasts allows customers to create special personalized stamps, which are available to everyone for a fee.
As social media have become one of the most active communications tools, and many of our customers are active in them, Latvijas Pasts is active in this area as well. In this way, Latvijas Pasts cannot only inform customers about the latest news and services, but also help solve problems and provide consultations.
With the help of modern communications tools, Latvijas Pasts intends, for the second year, to draw public attention to the popular postal symbol – the stamp. Everyone is invited to invite their own stamp design idea, and the stamp that gathers the most votes on social networks will be printed next year. Latvijas Pasts also hold postcard promotions on Twitter, which have been very popular, and have been noted in the circles of marketing and PR experts as well.
In terms of regulation, how can the postal sector, particularly in Latvia, benefit from the multi-sectoral regulation of network industries?
With regulation in the postal sector, users throughout the country are ensured the availability of postal services at unified rates regardless of the location.
A universal postal service compensation fund is being developed in Latvia, which would help compensate the losses caused by the postal merchant’s obligation to provide postal services throughout the territory of the country.
Financial services comprise a rapidly emerging third domain for the postal sector in its business drive to retain market share. Is this the case for Latvia and do you see convergence between the physical, virtual and financial domains that provides direct benefits for customers?
The main financial services provided by Latvijas Pasts are maintenance and servicing of accounts of the Post Payment System, which provides customers with an alternative to bank accounts – allowing to receive pensions and benefits, withdraw and deposit cash, as well as make various utility and other payments. The service is particularly useful to customers living outside the large cities and municipality centers – in places where there are no banks or even ATMs.
Therefore Latvijas Pasts takes the territorial niche of account maintenance and payments, where there is not much competition. The customers benefit by obtaining access to their account to receive pension, benefits and salary even in places where there are no other service providers.