2.4 SALES AND MARKETING

We are satisfied with the targets achieved in sales of services in 2020, while we were also successful in providing secure delivery of postal items and developing new options for the receipt of shipments.

2.4.1 Services of the Pošta Slovenije Group

In an ever-changing environment, the Pošta Slovenije Group provides reliable and safe services for the flow of goods and information, by linking postal services, logistics, e-commerce operations and contemporary IT solutions. Parcel and logistics services represent key areas for the growth and success of the Pošta Slovenije Group. Thus, the investment in Intereuropa in 2019 was the right path to ensure that the merged group becomes the leading provider of logistics and parcel services for end-customers in the region. In accordance with its vision, the Pošta Slovenije Group remains committed to its basic mission of providing universal postal services across the entire territory of the Republic of Slovenia. Through planned and previously introduced innovations, Pošta Slovenije continues to bring its services closer to users, and is adapting them to their ever-increasing needs and expectations.

Once again in 2020, the majority of activities focused on comprehensive parcel and logistics services for the most demanding customers, where we combine all of the knowledge and experience of the Pošta Slovenije Group. We facilitate the receipt of undelivered items at postal outlets, automated parcel machines, parcel delivery boxes and service stations. Our portfolio of comprehensive logistics services provides an improved overview of the flow of goods, the optimisation of processes and the easier management of costs. We can thus ensure the high-quality provision of services at competitive prices.

Although traditional postal services are in decline due to increasing substitution with electronic forms of communication, the delivery of postal items remains Pošta Slovenije’s core activity and accounts for the highest proportion of operating revenues. As the national postal operator throughout the entire territory of the Republic of Slovenia, the Company is obliged to provide universal postal services in the public interest. Universal postal services represent the permanent, regular and undisrupted provision of one or more postal services of a prescribed quality defined by the Postal Services Act across the entire territory of the Republic of Slovenia, at prices accessible to all postal service users.

Universal postal services include the following:

the delivery of postal items of up to 2 kg;

the delivery of postal parcels of up to 10 kg;

registered and insured postal item services; and

the delivery of postal items for the blind and partially sighted.

Delivery of letter mail, direct mail and publications in domestic and international mail

The area of letter mail, direct mail and publications was hit hard in 2020 by the pandemic. In addition to the envisaged decline, we also recorded a further decline due to the limited operation of economic and public entities, and the resulting accelerated transition to e-substitution.

The delivery of letter mail was impaired in international mail due to the reduction in transport connections, extending delivery periods, and also completely shutting down postal delivery services, at least temporarily, in some countries.

Due to the non-functioning of certain commercial sectors, the largest decline was seen in the delivery of direct mail.

In addition to constantly monitoring the situation, we also carried out activities to adjust procedures and streamline the distribution of letter mail.

Since 2021 has brought a series of complex customs and tax changes associated with the import of goods shipments into the EU area, while the rules for shipping merchandise are becoming increasingly strict under the auspices of the Universal Postal Union, we spent the majority of 2020 focused on activities associated with these changes in order to harmonise and supplement the activities and processes within the Pošta Slovenije Group in terms of international goods shipments and to fulfil the changed tax legislation requirements, effective 1 July 2021, and customs law requirements, effective 15 March 2021. This approach will ensure the regular performance of procedures for the import and export of international goods shipments and regular control over these procedures.

Parcels and logistics solutions in Slovenia and the region

Experience counts where the reliability and security of the delivery of parcels and provision of logistics solutions are concerned. Pošta Slovenije has provided postal delivery services for decades, while it has been adapting its logistics solutions for years to the needs of the most demanding business users. Together with its subsidiaries, the Company ensures the optimal logistics network, both at home and abroad.

The postal-logistics network covers all of Slovenia, while Pošta Slovenije is also deeply involved in international postal flows, both with foreign postal operators and other reputable international parcel and logistics service providers. Pošta Slovenije provides the delivery of items to the rest of the world through the international postal network, and provides logistics services in neighbouring countries in conjunction with its subsidiaries.

Through a reliable logistics network and one of the largest vehicle fleets in Slovenia, parcels are delivered safely and reliably in both the B2B and B2C segments.

The parcel sector was also hit hard by the pandemic in 2020. Due to the closure of shops, business was redirected online, both in the domestic and international environment. The receipt of international parcels increased additionally alongside the growth that was recorded in recent years. For domestic parcels, on one hand there was a reduction in the amount of parcels in the B2B segment, primarily due to the closure of the commercial and production activity, while on the other the amount of parcels from online sales for physical addressees significantly exceeded our expectations, particularly during the final months of the year.

Once again in 2020, the provision of logistics services was based on the provision of supply chain services, freight transport and large bulk shipments, day and night distribution, and warehouse logistics.

The portfolio of customers for whom we provide supply chain services (receipt in foreign warehouses, line transport to Slovenia and the further distribution of packages and parcels to points of sale or individuals) was expanded last year to customers from Croatia and Western Europe. We also initiated business cooperation with new customers who are registered in Slovenia and require supply chain services for the distribution of their product-sales programme from Slovenia to the markets of Southeast Europe.

Logistics and other services of the Intereuropa Group

The Intereuropa Group is the leading provider of comprehensive logistics solutions in the Western Balkans. A full range of services is provided through the following three key business lines:

the land transport segment comprising groupage, domestic transport, road transport, railway freight and customs clearance services;

the logistics solutions segment comprising warehousing and distribution; and

the intercontinental transport segment comprising sea freight, car logistics, shipping agency services and air freight.

The Intereuropa Group also provides additional services that include the leasing of business premises, parking services at customs terminals, trade fair logistics and insurance brokerage services. The competitive advantages of the Intereuropa Group are as follows:

a wide range of services;

brand recognition;

our own warehouse infrastructure at key locations in the region;

a high-value customs guarantee;

our own business network; and

professional and qualified staff.

The Pošta Slovenije Group will integrate logistics services from various segments, and synergy will impact the development of both companies, i.e. Pošta Slovenije and Intereuropa.

Information services

Digital services united under the Posita brand, combine solutions for contemporary operations in one place. In conjunction with the subsidiaries APS PLUS and EPPS, we offer services and solutions for paperless operations and the digital transformation of companies. With our comprehensive offer that includes an information infrastructure (IaaS, PaaS), a business information system, document solutions, the digitalisation of documentary material and long-term secure storage, electronic exchange and delivery of documents, and trust-based services, we facilitate reliable operations and the optimisation of costs to companies of all sizes and activities, as well as to public sector organisations. Pošta Slovenije’s data centres that cover more than 800 m2 in area, which ranks the Company among the largest providers of IT infrastructure leasing services in the Republic of Slovenia, represent the basis for reliable, secure and advanced IT services and solutions. All data centres have been constructed according to the highest security standards, and bear the ISO 27001:2013 and TIER III certificates. They are located at the Ljubljana and Maribor MSLCs.

Among other services in 2020, we launched an updated portfolio of certified secure electronic archiving services, which are based on a new and even more advanced software solution. We also updated the business model for the e-invoice service, which we transferred to APS PLUS and upgraded to the more comprehensive e-Mailbox solution, which facilitates the exchange of electronic documents from various systems (networks) and ensures security, confidentiality and controlled and traceable forms when being sent. We upgraded our portfolio of services also with the services of the SAP enterprise information system, in the scope of which we enable the setting up of a system (in a cloud, at the customer’s location or in hybrid mode) and the provision of high-quality technical and user support throughout the entire life cycle of the business system (e.g. consultancy regarding modules, system maintenance and monitoring of operations, the creation of additional capacities, development and maintenance of integrations). We carried out activities linked to the strategic policy under which we plan to consolidate and unite all the IT services in the Pošta Slovenije Group under a single brand, and transfer their provision to a single subsidiary. Sales and marketing campaigns during the year were also adjusted to the changing circumstances and to the business terms of customers due to the COVID-19 pandemic. Otherwise, sales activities also focused on the preparation of offers and/or solutions for major business customers from the fields of healthcare, banking, insurance, logistics and other commercial activities.

Development of plugins for online retail platforms

Plugins have become a link between online retail trade and the eSpremnica application, saving time for the owners of online stores for the labelling of postal items. We began with several tens of customers, and this year we already have more than 100 of these customers. The positive response from customers has shown that we are on the right path. Hence, we put together an extensive long-term plan for developing a solution that will further simplify operations for online retailers.

In accordance with a business decision, the development of the solution in 2021 will proceed at the PS Moj paket subsidiary. A larger team will thus be engaged in its development and support, Pošta Slovenije will maintain its focus on the high-quality provision of delivery services.

Financial services and services for contractual partners at postal branches

Postal branches also serve as banking counters, Pošta Slovenije provides financial services on behalf of and for the account of Nova Kreditna banka Maribor (hereinafter also: Nova KBM or NKBM). Households and business customers can open current accounts, perform financial services, submit loan and overdraft limit applications and arrange international financial services directly at the post office.

Branches also represent important points for purchasing games of chances from Loterija Slovenije and placing sports bets with Športna loterija, for the sale of Eventim tickets and Kuponko and 1nadan coupons, and for the sale of a basic portfolio of merchandise (parcel and letter packaging, office materials, greeting cards, postage stamps, toll stickers, candles, books, magazines, newspapers, snacks, gift programme, etc.).

The Pošta Slovenije Group provides other services, including mass printing and printouts of variable data, the complete processing of incoming daily mail, the digitalisation of documents and related services (the provision of document systems, e-archiving and e-invoices), forwarding and agency services.

2.4.2 Portfolio of brands

In 2020 we successfully completed a number of procedures for the registration of umbrella brands with the European Union Intellectual Property Office. In updating our corporate identity guide, we dedicated the most attention to the content categories of advertising and labelling. With the expansion of the Group and the resulting development of common products, we began preparing the bases for the creation of merged brands and continued activities in terms of the registration of brands.

2.4.3 Postage stamps and philatelic products at Pošta Slovenije

Even in 2020, with our postage stamps and philatelic products, we created many stories about our country, its characteristics, prominent personalities and their achievements, of our natural and cultural heritage, etc. Postage stamps thus remain a significant promoter of our country and bring joy to many collectors worldwide.

We issued 42 commemorative and 15 regular stamps in 2020, which brings the total to 1,400 stamps since Slovenia’s independence. Stamp issues were accompanied by first-day covers and postmarks, as well as a bulletin in which we presented all new postage stamp issues in three languages.

In January, within the Prominent personalities’ series we issued two stamps bringing attention to two major figures: the first stamp was issued on the 500th anniversary of the birth of Adam Bohorič, while the second stamp celebrated the 160th anniversary of composer Hugo Wolf.

In addition to the regular Flora and Tourism series of postage stamps, the commemorative stamp on a miniature sheet with which we marked the National Volunteer Week, with its long-tenured tradition and major significance in Slovenia, should be noted in the scope of the March issue.

The May issue of postage stamps was moved to July due to the epidemiological situation. At that time we also used postage stamps to point out a few significant historical anniversaries: 90th anniversary of the execution of the Heroes of Bazovica/Basovizza, the centenary of the burning of the Narodni Dom in Trieste and the 75th anniversary of the first Slovene postage stamp issue for Istria and the Slovene Littoral.

The centenary of football (soccer) in Slovenia was celebrated in 2020, commemorating this anniversary by issuing a circular postage stamp issued in a miniature sheet.

In September we continued our Fauna series with four stamps featuring cats. We commemorated the international year of plant health with a stamp in a miniature sheet. The series of five regular stamps entitled ‘Kjer se osel valja, tam dlako pusti’ (a white wall is a fool’s paper), which brings attention to the behaviour and attitude of modern society to the environment.

This year’s November postage stamp issue once again included four festive stamps, two with Christmas designs and two with New Year designs. Three regular stamps on self-adhesive paper brought attention to screening programmes for the early detection of cancer (ZORA, DORA, SVIT).

Slovenian postage stamps proved once again that they rank at the very top at the global level: On 5 November 2020 the Slovenian stamp in a miniature sheet featuring a brown bear was awarded first place in the Nexofil competition by its organisational committee in the category of ‘Most beautiful stamp in a miniature sheet’.

2.4.4 Market-communication activities

Our market-communication activities in 2020 again mostly focused on parcel and logistics services. We continued our campaign that was centred around the presentation of current alternative ways of delivering parcel items (home delivery, delivery to a neighbour, the workplace or an agreed location, text notifications, pick-up and drop-off of parcels at automated parcel machines and Petrol service stations, etc.), and informed our customers of these newly introduced options. In April we thus organised a campaign upon the installation of 450 Direct4.me parcel delivery boxes, where customers can order parcels to be delivered at 113 locations in Slovenia, while the June campaign also presented the option of dropping off parcels at MOL’s service stations.

In light of the results of the May online survey, which showed that only 42% of Slovenian firms actually offer or provide to their customers the possibility of selecting alternative forms of delivery by Pošta Slovenije, we also directed our advertising activities at the B2B segment.

As we recognise the importance of the contemporary forms of communication, we also continuously incorporate social networks into our market-communication activities, which was especially positively reflected during the declared pandemic.

To ensure that our operations are as secure as possible at a time where we all strived to prevent the coronavirus infection from spreading, we informed our customers via various media of the changes to Pošta Slovenije’s operations, suggesting they use alternative forms of postal item delivery, and encouraging them in a variety of ways to adhere to safe conduct principles when visiting post offices and when accepting postal items at their home address.

We regularly notified employees and customers online, on social networks, via radio and TV advertisements and videos of all changes and of the significance of complying with the implemented measures. During the spring pandemic wave we organised the ‘New manners – no contact’ campaign, apprising customers of the new forms of contactless delivery of postal items and bringing attention to the importance of maintaining safe distance between individuals.

Even during autumn the coronavirus affected the content and implementation of market-communication activities. As each year prior to the increased volume of transactions in December, we again called on our customers in 2020 to post mail items addressed abroad on time, and specifically to make timely online purchases and other merchandise orders. Since online purchases during this period are very important for the supply of goods to the household sector, we teamed up with the Online Retailers Association and agreed on the express provision of crucial information and timely action in the event of any changes.

The measures for the containment of the new coronavirus also affected the operation of postal units during the autumn wave of the pandemic. Due to the limits imposed regarding the maximum number of persons in indoor premises, only one individual could enter a post office that covers less than 30 square metres in area. As a result, we organised external postal points in front of entrances to selected postal branches, where we arranged tables with hand sanitisers and placed the most frequently required postal forms to speed up the services they required once customers entered the branch.

At the end of November we organised the ‘Thank you for caring’ campaign, using TV video spots and activities on social networks to promote trust and tolerance among the users of postal services and asking them to comply with the safety measures during the handover of mail at home and at post offices. We also launched the ‘Pick up your parcel at the Petrol service station’ media campaign, in which through a prize game, with which we presented 114 prizes, we encouraged customers to use alternative forms of delivery at 114 Petrol service stations.

In 2020 we also continued to apprise the users of postal services of the advantages of the organisational form of contracted post offices. We updated the presentation of contracted post offices on our website, preparing a video presentation of this organisational form, and also launched an online campaign to attract new contractors.

Some campaigns linked to IT services were executed in conjunction with business partners, while additional marketing activities, business events and workshops were organised to strengthen the recognition of the Posita brand via promotional activities, with an emphasis on individual services or on groups of related services.

In order to provide successful sales support, we also carried out market-communication activities throughout the year through internal communication channels that reach both legal entities and individuals (addressed and unaddressed direct mail, advertising in post offices, the website, in-house newsletter Poštni razgledi).

We continued conducting research in 2020 in accordance with the strategy for conducting surveys and monitoring customer satisfaction. In addition to minor surveys, we conducted a survey regarding alternative options of delivery during the first COVID-19 wave, a survey on the submission of electronic data of our business customers, a survey on the recognition and reputation of Intereuropa on the Slovenian, Croatian and Serbian market, and an online survey on customer satisfaction with parcel, logistics and IT services.

In cooperation with the International Post Corporation, we repeated online research aimed at identifying the cross-border purchasing habits of consumers. Together with the company Frodx d. o. o., we used the software solutions offered by the InstantFeedback tool to conduct research that uses text messages to obtain information regarding customer satisfaction with parcel delivery immediately following the receipt thereof.

Through his activities, Pavli the Postman strengthens the positive image of Pošta Slovenije and familiarises children with the Company’s services in a pleasant way. In 2020 we continued our activities intended for the youngest generation. At the beginning of March, Pošta Slovenije received a thematic corner inside the creative children’s city Minicity. Despite the ‘city’ being forced to move to a virtual world due to the pandemic, the postal corner continued to invite children to write letters and postcards, and thus continued to promote written expression and communication among the youngest population.

But we went one step further and also encouraged intergenerational connections. Initially, during the first wave of the pandemic, by donating postcards to residents of the homes for the elderly we enabled them to keep in touch with their closest relatives by post. Our offer extended to Slovenian primary school children, who were invited to come up with greetings for the elderly, garnered a very positive response. More than 200 schools contributed wonderful ideas, greeting cards, greetings and drawings that brought joy to around 4.000 elderly persons in more than 16 homes for the elderly throughout Slovenia during the December festive season.

2.4.5 Quality Management at Pošta Slovenije

The quality of delivery of items of correspondence is verified on the basis of and in accordance with Article 10 of the General Act on the Quality of Universal Postal Service Provision, according to which a universal postal service provider must meet the following in domestic postal services over a period of one month:

at least 95% of items of correspondence delivered within one business day (D + 1);

at least 99.5% of items of correspondence delivered within two business days (D + 2); and

100% of items of correspondence delivered within three business days (D + 3).

The Company fully meets or exceeds the aforementioned values (excluding the period of the declared COVID-19 pandemic). The cumulative values of the indicators were as follows in 2020:

95.4% of items of correspondence were delivered within one business day (D + 1);

99.6% of items of correspondence were delivered within two business days (D + 2); and

99.8% of items of correspondence were delivered within three business days (D + 3).

The quality of the delivery of parcels in the scope of universal postal services is verified on the basis of and in accordance with Article 11 of the General Act on the Quality of Universal Postal Service Provision, according to which a universal postal service provider must meet the following in domestic postal services over a period of one month:

at least 80% of parcels delivered within two business days (D + 2); and

at least 95% of parcels delivered within three business days (D + 3).

The Company fully meets or exceeds the aforementioned values (excluding the period of the declared COVID-19 pandemic). The cumulative values of the indicators were as follows in 2020:

99.2% of parcels were delivered within two business days (D + 2); and

99.7% of parcels were delivered within three business days (D + 3).

Quality of international postal delivery services at Pošta Slovenije

Measurement of the quality of postal services serves as the basis for ensuring performance, and for eliminating potential problems and bottlenecks in that process. Quality has a significant effect on the satisfaction of domestic and foreign users of postal services, and on the amount of revenues and costs that we receive or pay to foreign postal operators.

We participate in independent measurements of the quality of priority mail delivery services (UNEX and GMS measurements), and in the measurement of the success of the delivery of recorded letter mail, parcels and EMS parcels. In addition to timely delivery, ensuring and transferring electronic data in tracking systems is of great importance. Besides postal operators, land and air carriers have a significant impact on quality.

Deliveries of priority mail are monitored as part of the independent UNEX and GMS system quality measurement amongst participating postal operators. Quality standards are prescribed in the postal directive of the European Union (hereinafter: EU) and are as follows: 85% of mail must be delivered within three business days, while 97% must be delivered within five business days.

Pošta Slovenije achieved the following results in 2020 according to the UNEX measurement, which is managed by the Belgian firm International Post Corporation: the delivery of 86.5% of test items the day following their arrival in Slovenia, and the delivery of 96.8% and 98.7% of items two and three days following arrival, respectively.

Together with other participating postal operators and transporters, the following average results were achieved (measurement from the dispatch to the delivery of a shipment):

50.8% of items dispatched from Slovenia to the rest of the world were delivered within three days, while 67.6% of items were delivered within five days;

57.9% of items arriving in Slovenia from the rest of the world were delivered within three days, while 79.0% of items were delivered within five days;

According to the GMS measurement, which is carried out under the auspices of the Universal Postal Union, Pošta Slovenije performed well in 2020, delivering 84.8% of items within one day after their arrival in Slovenia.

The quality of delivery is also verified in relation to parcels. We participate in the measurement of quality in the so-called EPG network; the quality of parcel delivery is also monitored at the level of the Universal Postal Union. In terms of parcel delivery within the EPG network, we must ensure both the physical delivery of parcels according to agreed standards and the timely provision of data regarding the delivery of those parcels in the tracking system.

2.4.6 Complaints and redress proceedings at Pošta Slovenije

In accordance with the General Act on the Quality of Universal Postal Service Provision, Pošta Slovenije keeps a centralised list of complaints and claims for damages relating to universal postal services in line with the SIST EN 14012 standard (Postal services – Quality of services – Handling of complaints and redress procedures).

In accordance with the aforementioned standard, Pošta Slovenije, as a universal postal service provider, must publish a report at least once a year on the number of complaints relating to universal postal services and the time required to resolve complaints.

A total of 10,261 complaints relating to universal postal services were filed in 2020, including 3,722 complaints regarding domestic postal services and 6,538 relating to international postal services. Of all the complaints filed, 4,470 were justified (1,820 in domestic postal services and 2,650 in international postal services). The Company paid damages for 2,079 complaints (1,179 in domestic postal services and 900 in international postal services) during the reporting period.