The rise of the parcel locker

What if you could make a home delivery in seconds, at any time in the day, while also reducing last-mile delivery costs? LMH looks at the potential of the parcel locker logistics solution. 

As demand for online shopping continues to grow, consumers are looking for more efficient ways to receive parcels. Customers are now ordering items from anyone, anywhere at any time. Whether it’s phone chargers from China, books from Britain or fresh produce from the local grocery store online shopping is now the norm.

Australia ranked second in the world for online shopping growth, according to the Inside Australian Online Shopping eCommerce Industry Paper, and the consumer now wants the convenience of a parcel delivered effectively after purchase, not a notice, a requirement to visit a depot or an option for a separate delivery slot.

With so many items now being ordered online, most people’s mail consists of more parcels than letters. Volumes of addressed letters at Australia Post have fallen 36 per cent in the past seven years. In 2015, for the first time in its history, Australia Post’s parcel business contributed more than half of its total revenues.

Many customers aren’t at home at the time when deliveries are scheduled to receive parcels and it is becoming increasingly frustrating to have other aspects in the supply chain, including sourcing, packing and distribution, run efficiently and effectively to then be faced with a lengthy and inconvenient aspect. Particularly once the parcel has, in theory, reached the customer’s home.

One option is to leave the parcel in a ‘safe place’, but this is problematic for both the consumer, retailer and logistics company. Who is at fault is it if a parcel goes missing from a consumer’s home? Who pays for parcel theft? Is it the logistics provider or the retailer? What happens if the consumer is lying about whether the parcel ever arrived? What about weather conditions? Valuable objects?

The relationship with the consumer and retailer can be tarnished when a customer has a bad delivery experience, an astonishing 38 per cent of US consumers would elect to withdraw their loyalty from a retailer again following a bad delivery experience according to MetaPack’s Delivering Consumer Choice report. The importance of getting this last part of the transaction right is a top priority for many shoppers.

A solution to many of these issues could be the parcel locker. Parcel lockers are automated storage systems that can securely store packages for consumers at their homes. They reduce the risk of parcel theft, re-delivery attempts and lost packages. They have many benefits for the consumer as well as increased transparency and reliability for logistics providers.

The big players in the logistics industry are developing solutions in this space, with Amazon launching Amazon Key, a service that allows Amazon couriers to open the front door and put the package safely inside the home. DHL has also trialled delivering items straight into a customer’s car. Though recent developments may mean that one day goods are delivered straight into your home David Jinks. Head of Consumer Research at ParcelHero, an online courier company, believes that right now it’s all about the parcel locker. “The locker is the most convenient option for hard pressed consumers who can’t afford to take time off to wait for an important package. Couriers and retailers who fail to embrace the growing move to parcel lockers will lose out significantly,” David says.

Though in many respects, last-mile delivery is a difficult challenge to tackle, there is a number of innovative developments taking place in Australia in the personal parcel locker space.

Australia Post has developed its own parcel locker offering, with a product called Receva. Receva is a water-resistant mailbox Australia Post claims is designed to accommodate parcels, groceries and wine boxes.

The box, which launched in October 2017 with a trial in Melbourne, is connected to the internet and managed via a smartphone. According to Australia Post, it eliminates the risk of items being stolen or damaged by the weather if left unattended for too long. The mailbox gives customers full control through a smartphone, enabling them to receive instant delivery notifications, monitor the temperature and battery levels of the box and allow others to access it digitally.

“The trial in Melbourne’s south east was met positively by customers. This was largely due to the greater choice, security and control in the way they received their mail and parcel deliveries,” Tien-Ti Mak, Innovation Partner at Australia Post says.

Though Receva is designed to work with any carrier or courier, at present it only receives parcels from Australia Post. An issue which Malcolm Lewis, Owner and Founder of a rival Australian-made product called Chester says is problematic. “Receva requires a key dongle that can currently only be used by an Australian Post representative,” Malcom says.

“My main reason for setting up Chester is that I have a deep concern about closed hardware, in my view the hardware associated with these kinds of solutions should be open source, it should be open infrastructure,” Malcolm explains.

The idea for Chester came while Malcolm was working in the US. He and his wife realised they were never home to get deliveries. He says Chester’s key functionality is that its natural state is unlocked. “It doesn’t require any integration with a carrier or logistics provider. The box is open and then when a delivery is placed in the box it sends a notification to the consumer via an app, let’s them know that they have a delivery, how much it weighs and at what time it was delivered.”

As well as increased convenience and transparency for the consumer, Malcolm believes this also has significant benefits for the retailers and logistics providers. “The data can be invaluable for businesses, with Chester they have proof of delivery,” he says.

Malcolm says that the two-hour delivery window is proving too expensive for many logistics carriers and he notes that the consumer isn’t necessarily concerned with speed, but the real issue is the waiting around. “People want transparency, they want to know where their parcel is and where and when it will be delivered,” Malcom says. With Chester, the consumer has transparency and access to information about their delivery and the logistics provider is also able to deliver more parcels in less time without ambitious, expensive and specific two-hour delivery slots.

The product is at prototype stage at the moment, and Malcolm is hoping it will be launched before Christmas this year. “During the research stage, people wanted something that was battery powered, that could receive a delivery from anyone and that looked nice,” he says.

Chester has a volume of 125 litres and has ice patch compartments so that fresh fruit and veg can also be delivered. According to Malcolm, he has spent a lot of time developing a product that he thinks will fit with the aesthetic of a house, has multiple uses and can be accessed by any courier. Details about pricing are yet to be decided but Malcolm ensures that it will be affordable and is aiming for a one-off purchase situation.

With last-mile delivery customers are looking for convenience and reliability and providers are looking for ways to cut costs and increase efficiency. Parcel lockers are a growing option in this area with a number of home-grown developments worth watching.