Online shopping is exploding. In 2014, Americans will spend nearly $300 billion on products they ordered via the Internet. That number could expand to $434.2 billion by 2017 and represent 10 percent of all retail sales, according to estimates from sources including Emarketer.com and InternetRetailer.com
But shoppers’ convenience is a logistical headache for not only package delivery companies like UPS, but also property managers whose buildings are being buried under packages mailed to their residents.
This year, the 175 buildings managed by Houston-based Camden Property Trust are on track to handle 750,000 parcels, which would be 50 percent more than they received in 2013. A typical Camden apartment with 300 units receives 30 packages a day, says Kristy Simonette, Camden’s senior vice president of strategic services.
Solutions to managing this onslaught all have their drawbacks. Property managers that decline to accept packages risk alienating or even losing residents. And charging for this service would negate the free delivery that consumers associate with online shopping.
Camden has huddled with FedEx and UPS, both of which “are very open [about providing help],” says Simonette. “They get it.”
Some apartment firms are also turning to package locker providers to provide a solution for automating package handling.
"Everyone is involved in this process--residents, delivery carriers, owners and property managers are looking for solutions to keep up with the rising popularity of online shopping," says Barry Hume, president of Package Concierge, a major provider of digital locker systems for the apartment industry, including a number of NMHC 50 firms.
Meanwhile, packages keep piling up at apartment buildings across the country. Every 15 packages accepted take up an hour of a building staff’s time, and a package can sit in a building’s offices or storage areas for up to 67 hours, according to estimates from Irvine, Calif.-based Parcel Pending, a year-old company whose system of smart lockers has attracted the attention of property managers that include Shea Properties, Holland Residential and Sares-Regis.
However, package locker systems raise some questions from industry executives about how many lockers are needed, who pays for the cost of installation and use and whether couriers will actually deliver to a locker.
Lori Torres, Parcel Pending’s founder and CEO, says her company’s system is “courier agnostic,” whereas Amazon’s drop box service only accepts Amazon’s packages, which Torres calculates account for about 40 percent of a building’s total package load.
Similarly, Package Concierge founder and CEO Georgianna Oliver says her company is actively partnering with the United States Postal Service and has key relationships within UPS to ensure the company has 100 percent delivery carrier acceptance at every Package Concierge installation.
Torres calculates that a 300-unit building needs about 50 lockers. When a package is delivered and placed in a locker, a resident who signs up for this service receives a text message and email with a six-digit access code. Parcel Pending notifies the resident every day and lets the property manager know when a package has been in a locker for an extended period.
The property manager then decides how long a locker will hold a package and when and how much to charge the resident for the service. Parcel Pending and the property manager share the revenue.
Other package locker providers offer similar services, albeit with their unique twists on the business model.
NMHC will deliver the goods on the issue of package deliveries at a discussion titled “Package Delivery Solutions for an Online World” on Wednesday, November 19 at 9:30 a.m. during the 2014 NHMC OpTech Conference & Exposition.
In addition, NMHC and Kingsley Associates will present the results of a related groundbreaking survey of apartment operators at the event, offering insight into how they are addressing the increasing real estate, technology and personnel expenses associated with efficiently delivering an ever-expanding volume of packages to residents.
The event runs November 17-19, 2014, and will be held at the Hilton Orlando Bonnet Creek Hotel in Orlando, Fla.
- House Committee Shines Spotlight on the Need for Postal Reform
- NMHC and NAA Raise Apartment Industry Concerns about Postal Reform
- NMHC and NAA USPS Postal Reform Letter to House Committee on Oversight and Reform
- Treasury Releases Postal Reform Recommendations
- Postal Reform Task Force Is Expected to Release Report