What is a Parcel Locker?

4 Minutes Read

It was 2005 when Amazon introduced flat-fee, two day shipping through its Prime membership program. And although eCommerce as we know it began more than a decade earlier, Jeff Bezos changed the game by knocking down one of online shopping’s biggest barriers – the high cost of shipping.

Today we can shop from the comfort of our own home and have items delivered within one day, or in some cases, within hours. How we shop has fundamentally changed forever. Another change, the new normal of nearly daily at home deliveries, is contributing not only to higher logistical costs, but also negatively impacting our environment.

With eCommerce expected to account for 22% of all purchases by 2023, parcel lockers aim to solve the challenges facing today’s communities, couriers, and retailers. In today’s post, we explore what is a parcel locker, share a few examples of use cases, and provide tips on what to look for when choosing a parcel locker solution.

What is a Parcel Locker?

A parcel locker is a secure storage container with lockable slots facilitating the delivery, retrieval, or exchange of packages. Access to slots is available using traditional lock and key or smart technology utilizing on-locker touchscreens or mobile phone applications. Parcel lockers reduce logistics cost, improve courier efficiencies, and provide customer convenience.

Parcel lockers are often confused with community mailboxes, also known as CMBs, which have existed for nearly a century. CMBs are used by post offices throughout the world, but do carry two significant drawbacks. First, individual slots are typically sized to only accept letter sized items and second, deposits usually can only be made by the respective post office.

On the other hand, parcel lockers can be engineered to accept packages of almost any size the locker owner requires. Additionally, technology now allows lockers to be courier agnostic, meaning any parcel courier can deposit packages by integrating with a locker’s application programming interface, or API.

Who Operates Parcel Lockers and Why?

There are a myriad of use cases for parcel lockers. But, generally speaking, parcel lockers are owned and operated by four types of businesses.

Retailers – Parcel lockers afford a way for retailers, both online only and those with physical locations, to provide a convenient way for customers to pick up or return online purchases while avoiding the cost of shipping. Retailers benefit from reduced logistics costs and the potential to generate additional revenue by offering auxiliary services.

Residential Buildings/Communities – Large apartment buildings, condominium complexes, and university dormitories are suffering from a staggering number of daily package deliveries. According to a U.C. Irvine study, every package received resulted in 10 minutes of lost productivity for the staff. Multifamily parcel lockers automate the entire process, reducing staff workload and payroll.

Commercial Asset Protection/Exchange – Many businesses have employees who are reliant on expensive, company owned equipment. Others may have a regular movement of valuable assets between departments. In both instances, organizations can deploy parcel lockers as a method to track items such as electronics, photography equipment, time sensitive materials, or any number of things which require detailed records of their locations at all times.

Courier/Logistics Companies – The first and last mile of any delivery is always the most expensive. Companies in the business of moving packages from point A to point B are installing smart parcel locker networks to reduce cost for their customers and increase efficiencies across their logistics system.

Parcel Locker Use Cases

Large buildings, whether commercial or residential, have found managing incoming parcels to be one of their most challenging problems in recent years. Parcel lockers provide a cost effective solution to free up management staff while also providing convenience for those expecting deliveries.

Condominium Building – A large condominium building on the shores of Lake Ontario needed to fundamentally change how they received incoming courier shipments. The building staff had reached a point where they became unable to look after other important duties. A turn-key solution was required to remove the need for concierge services to receive, store, and hand out the increasing number of parcels. Specifically, the solution needed to be:

  1. Safe & secure
  2. Accessible 24/7
  3. Courier agnostic
  4. Easily expandable
  5. Simple for residents

After evaluation of their daily volume, which averaged between 40 and 50 deliveries a day, the association board selected a 72-slot  Smart Locker. Since installation, residents have enjoyed the improved service and convenience. Lost or missing parcels are a thing of the past. And the staff are again able to tend to more pressing tasks.

Commercial Building 

A large, national bank needed a way to better manage incoming package shipments to their large, downtown office buildings. Over 30% of deliveries were being missed on the first attempt while other parcels were getting lost. Further, the bank was becoming concerned about increasing courier foot traffic and disturbances to their staff.

thumbnail_residential locker-inside lobby -1-1

Signifi's Residential Parcel Locker Locker, designed to meet their exact specifications, was installed at one of their largest properties. The new, courier agnostic locker system provided an automated and elegant solution which included:

  • Registry of building employees automatically updated daily
  • Deliveries are deposited with a single barcode scan by couriers
  • Employees are automatically messaged with their pickup codes
  • Pickups by employees are now completed in under 20 seconds

The success of the first Smart Locker installation led to plans to roll out similar solutions to their other commercial buildings over the next three years.

4 Tips for Choosing a Parcel Locker

When considering Residential Parcel Locker as a solution to better manage incoming deliveries, or as a part of a larger logistics network, there are a number of considerations to be made beyond the locker hardware itself. Evaluating current parcel handling is only the first step. To implement a successful solution with long-term viability requires your parcel locker to include some built in flexibility such as:

Expandability – The needs of your organization will change over time. Parcel locker solutions with the ability to add additional parcel slots, or swap out slots for different sizes, will ensure your locker can meet the demands of today and tomorrow.

Ancillary Services – Advertising, peer-to-peer exchange, and third party courier access are just a few ancillary services your parcel locker can offer. And as parcel locker networks grow, so too does the opportunity to add revenue generating services.

Customizable Software – A change in your organization’s computer systems or the desire to extract specific types of data may necessitate the need to customize your parcel locker’s capabilities. Look for vendors who have complete control of the smart locker’s software so integration changes can be completed fast and seamless.

Continued Service and Support Residential Parcel Locker provide the opportunity to deliver a frictionless experience to consumers. However, issues can and do arise. This means you will need to select a vendor with the ability to provide expedient responses to any problems so, no matter what happens, your customers are left with a positive impression of the technology solution.

Parcel Lockers for Today and Tomorrow

Parcel lockers are changing the way packages are delivered, returned, and exchanged. Not only are they capable of significantly reducing logistics costs and providing customers added convenience, they have a positive impact on the environment by reducing last mile deliveries.

Even though thousands of parcel lockers have been installed across the globe, they are still in their infancy. There are temperature controlled lockers now entering the market. Engineers are working closely with retailers to design parcel lockers in a variety of shapes, configurations, and sizes to make a bigger impact for their brands. And concepts such as mobile, solar powered, and communal parcel lockers are being explored. The possibilities are truly endless.


Conceptual curved luxury retailer parcel locker

Signifi is working with property managers to implement the Signifi's Smart Residential Lockers in their apartments. Contact us to find out more about how it could help you.