We know there’s a package problem – there is absolutely no denying that. We talk about porch pirates. We talk about no longer accepting packages. We talk about the various solutions to today’s package situation.
But as the industry searches for ways to fix the problem, there are some vital areas that aren’t being discussed, including the impact to apartment owners and management companies and how ROI cannot simply be measured in cost-per-unit. Poor package management negatively impacts the leasing team because they end up handling packages instead of focusing on their value-add job of signing new leases to drive revenue.
By not addressing the top five issues below, finding the best solution to the package conundrum will remain elusive:
1. The package problem will become bigger than we realize: Well, yes, we are talking about the future growth of the package problem, but the industry is looking to solve for the number of packages it receives today rather than what it will receive in the future. In 2017, e-commerce sales accounted for 9 percent of all retail sales in the United States. This figure is expected to reach 12.4 percent in 2020. That’s increased from 5.8 percent in 2013, meaning online sales has almost doubled in less than five years.
2. Packages are evolving: The iconic Amazon rectangle box is a thing of the past. Packages are no longer squares or rectangles that can fit into a pre-determined space. Oversized, awkwardly shaped and even heavy packages are being delivered hourly to properties nationwide. Consider the mattress-in-a-box phenomenon in which king-sized mattresses are delivered directly to the consumer. Mattress-in-a-box sales account for more than $1.5 Billion of the mattress market. More than 80 percent of them even offer free shipping and free returns. We now need to evaluate average package dimensions and how oversized and heavy package deliveries increased in the last five years.
3. Convenience and speed in and speed out: As an industry, our solution to the package problem has been to provide a place for packages to be delivered. Almost an “out of sight, out of mind” mentality. The problem with this approach is that if packages aren’t picked up by residents in a timely manner, communities will run out of storage room no matter how many lockers they install. There is a big opportunity to improve package pickup and delivery times to gain operational efficiencies by focusing on package throughput rather than physical spaces. Our efforts should be on delighting residents with convenience and speed so it is important to prioritize how quickly an apartment community is able to move the parcels they have in a package storage solution out of that package storage solution. By making it easier for residents to receive notifications about their packages and retrieve their packages and for carriers to deliver packages, you can improve your package throughput and reduce the need for excessive storage space. The quicker you move packages in and out of the storage solution, the less space you need for packages.
4. Carriers, delivery services, and outsourced drivers: The way packages are arriving at your communities is rapidly changing. The carrier list is no longer limited to UPS, FedEx, and USPS. It includes the big three plus a growing flurry of outsourced drivers. Major retailers – Walmart, Amazon, Target, Kroger, etc. - are now offering direct-to-home delivery services. Combine this with the influx of outsourced services like Shipt, TaskRabbit, DoorDash, InstaCart and PostMates, and it is becoming increasingly difficult to know who is going to deliver a package to your property. In today’s retail-driven landscape, riddled with inefficiencies throughout the purchase-to-delivery supply chain with single orders being packaged and delivered separately (looking at you Amazon), you could have a seriously high volume of untrained, unapologetic carriers visiting your community, at any time of the day or night. It is even more vital than ever to make last mile delivery as easy as possible.
5. It’s not just about package delivery: Returns and outbound shipments are happening daily at your communities. Residents want to be able to easily return the clothes that just didn’t fit right. And they’re selling their goods on PoshMark or Etsy and need to ship that package from home. So, making the shipping and returns process easy for residents and seamless for carriers is critical. Residents and carriers need to be able to drop-off and pick up at the same time.
The industry is correct in realizing that they need to do something about the package problem. But it is increasingly important to understand how logistics play into providing the right solution.