The parcel locker or click & collect industry has already grown to nearly $800 million, according to a report by Apex Insight, a leading market research firm!

That’s a whopping figure considering the fact this industry is still taking baby steps! The retail business, the biggest beneficiary of this spectacular growth has, however, already acknowledged the potential. And why not, they can now breathe a sigh of relief finding a solution to their “last mile” woes.

It is a well-known fact that the last mile element of parcel delivery typically constitutes between 35 and 50 percent of the total costs. The emergence of parcel lockers solutions can now reduce the fragmented home deliveries into a single consolidated drop and pick-up option makes them a more cost-effective solution to retailers.

What Parcel Lockers do better than traditional delivery?

Parcel lockers typically comprise between 20 to 100 plus electronic lockers with a control unit. Online shoppers can open their designated compartment after feeding in their one-time password (OTP). They can collect their packages any time, while on the way back from office or just by taking an evening stroll to the nearby parcel terminal. They need not wait endlessly for delivery personnel to come with their package. Also, retailers don’t have to bear the cost of delivery re-attempts. The entire process makes the traditional delivery system sound old school.

Again, the same Apex Insight report reveals the key benefits of locker systems that are instrumental for the industry’s fast growth. The benefits are:

• Increased sales for retailers from more efficient delivery services
• Cost savings for carriers due to more streamlined consolidation and increased delivery success rates
• Higher flexibility and convenience for consumers
• Environmental benefits from reduced carbon footprints that usually emanate from last mile delivery

In addition, locations provide another advantage as the locker terminals are installed at easily accessible places such as metro stations, apartments, community buildings, office premises, and shopping centres. The systems have integrated technologies that provide an audit trail and real-time data that ensure instant updating of collections or deliveries.

Why India is likely to be the next “hot” destination for Parcel Locker Industry

In the global parcel locker market, China is currently growing at the fastest rate with the maximum number of installations among all the countries. In Europe, Germany is leading the way with nearly 3,000 lockers all over the country. So, where does India stand amid those impressive figures? Well, it’s already looking pretty bright. Let’s see why?

The Indian e-commerce sector (both B2B/B2C) has been growing at an incredible speed during last five years, and the net worth is likely to reach $70 billion by 2020. This makes India the fastest growing e-commerce market in the APAC region. The main factors that are driving this growth are lower pricing of desktop, laptop, and smartphones, improved Internet connectivity, increasing electronic payment options, and changing consumer preferences.

Besides the factors, increasing popularity of automated parcel lockers or click & collect is also adding to the momentum. For example, Smartbox, which began its journey a couple of years back, has been growing at an impressive pace. Currently, the company has a tad over 80 automated locker terminals across the Delhi NCR region. The company has also got into trading partnerships with leading retail companies such as Oriflame and Shopclues and has Paytm as their payment partner. If you travel by metro regularly, you can choose any of the Smartbox terminals installed at the major stations. All you have to do is to collect your package on the way without having to face the hassle of coordinating with the courier personnel. You only need the OTP received through email or SMS to open the locker and a debit/credit card to make an instant payment. It is as easy as it gets!

Closing Words

The significance and effectiveness of parcel lockers have made them a vital cog in the retail wheel. With the future growth potential of the current three consumer delivery models (X2C)—parcel lockers, drones, and bike delivery, the retail marketing is going to be more competitive in terms of providing the last mile solutions. In the current scenario, the parcel locker industry is definitely having an edge and expected to provide more sustainable solution in the coming years.