What are Parcel Lockers?

Parcel lockers are technology-based self-service delivery solution which have been introduced to address the last mile woes of online retailers. After creating waves across Europe and North America, automated parcel terminals are fast making inroads into various public spaces in India. Simply put, parcel lockers help e-commerce businesses with an efficient and cost-effective method of delivering products to end customers. Particularly, the lockers have a key role to play as an integral part of retailers’ multichannel sales strategy like omnichannel.

Key Features of Parcel Lockers

• Collection Point – Parcel locker terminals are placed at convenient locations such as metro stations, apartment building, shopping malls, and community centres from where customers can easily collect their package within 2-3 days.
• Accurate Shipping Cost – Shipping through parcel lockers provide online retailers accurate estimate of shipping and delivery cost because unpredictable circumstances like delivery re-attempts or address issues can be eliminated. This will, in turn, bring down the last mile delivery cost.
• Shipment Tracking – Retailers can track the shipment real-time with a tracking number. Customers also receive up-to-date information about their order shipment status.
• Highly Secured – Parcel lockers are both physically and virtually secure. The lockers are made of high-quality material and secured from vandalism and identity theft.
• Easy Return – Just like the delivery, returning a package is also easy through parcel lockers. Customers simply need to put the product in its original package and put it back into the locker.

Why Integrating Parcel Lockers with the Omnichannel Strategy is Important?

Optimizing parcel volumes along with last mile delivery have been a major challenge for online retailers. These issues are likely to snowball into bigger problems as e-commerce industry continues to expand. Connecting with customers offering their desired products through a vast inventory, and providing a high efficient delivery solution is the need-of-the-hour.

These days, eShoppers are expecting more flexibility and convenience when it comes to online shopping. A survey conducted by comScore survey (by UPS) in March 2015 highlighted the following issues:

• The mobile platform is proving to be a catalyst to omnichannel shopping, and retailers need to address any technical limitations to ensure better customer experience
• Online shoppers are seeking alternative, more effective and cost-effective delivery solutions
• Increasing numbers of customers are expecting free shipping together with higher emphasis on free returns.

By incorporating automated parcel lockers into the supply chain, retailers will be able to meet customer expectations across different geographical locations. Hassle-free shipment, state-of-the-art tracking solutions, electronic proof of delivery and convenient package collection process will help retailers streamline their operations.

Omnichannel fulfilment is not just about delivering orders to consumers; it’s much more than that. The whole process enables retailers to fulfil orders through the manufacturing sites, distribution centres, warehouses, or stores. In addition, omnichannel also enables customers to buy products online and collect from a store. The end-to-end fulfilment process provides a seamless consumer experience regardless of the location.

In this context, it is worth mentioning that choosing the right parcel locker service provider is the key as the incorporated system is likely to be the backbone of a retail company’s long-term business strategy. Though it’s too early to predict what the future has in store for omnichannel, still it has the potential to reach higher operational efficiency and provide a better customer experience, provided how they manage their last mile delivery.

In the current scenario, retailers are primarily focusing on enabling fulfilment from any part of the supply chain. However, they need to have a system for better supply chain management. It means, besides enabling customers to buy from anywhere, retailers should achieve the much-needed flexibility to supply products from any retail channel. It is both an opportunity as well as a challenge.

Particularly, seeing the opportunity, prominent retail players are inclining towards the omnichannel business. Traditional brick-and-mortar stores have triggered a paradigm shift by moving over to the e-commerce platform, and offering the virtual shopping facility to customers besides buying through the traditional “touch and feel” way.

Integrating Parcel Lockers will bring in these benefits to Omnichannel Fulfilment

Transitioning to omnichannel brings the following advantages as retailers are able to find flexible solutions to meet customers’ demands in rapidly changing digital landscapes. Here we go:

Inventory Management
Parcel lockers improve the scope of inventory management and better omnichannel fulfilment. Streamlining both in-store and virtual inventory, retailers can have a true understanding of the inventory they have, and also ensure delivery of products when they are actually available.

Shipping Speed
Earlier, a handful of distribution centres used to manage shipping. Now, with the introduction of parcel lockers, it got extended to all stores in more spread-out territories. The high-performing technology of automated parcel locker terminals located in the scattered areas make ordered items easily accessible to customers. Due to significantly reduced logistics challenges, retailers can ship products even within a short turnaround time. In this way, they can create a value-based service that exceeds their customers’ expectations.

Keeping up with Compliance
Traditional carriers need to deal with numerous compliance issues including regulatory compliance practices, including adhering regulatory standards, arranging specialised logistics services for transporting sensitive products, storage compliance, vendor compliance, and also social compliance. Incorporating automated parcel lockers can help to fulfil all of these compliance issues by simply reducing the logistical complexity.

Closing Words
All of these benefits along with low cost and customer convenience are providing retailers more control over their omnichannel operation through delivery scheduling, switching to alternate delivery locations, and easy returns. This is the reason why the ecommerce players are taking the integration of parcel locker and omnichannel quite seriously, and this is just the beginning.