The rise of the smart parcel locker

The final leg of a product's journey, also known as the last mile, has always been a complex puzzle for logistics companies. Rising consumer expectations haven’t made things any easier. Nowadays, people want speed, convenience, and a small carbon footprint. Traditional methods for getting orders from the warehouse to their house are being stretched to the limits.

Although real-time tracking and preferred delivery times have helped alleviate some of these issues, more flexibility is needed. Enter the smart parcel locker. This solution has gained traction since the early 2000s and is taking off as e-commerce continues to boom and technology makes the systems smarter. Will doorstep delivery become a thing of the past? Probably not. But smart lockers offer additional convenience, efficiency, and sustainability – for both sending and receiving packages!

If you live in a country like Germany, you probably know the answer to this question. Package delivery lockers, known as Packstations in Europe’s largest economy, are commonplace. There are some 13,000 across the country. But parcel lockers are unheard of in many parts of the world.

Parcel lockers are secure, self-service kiosks where your online purchases are safely stored and ready for pick-up at your convenience. They’re like vending machines for packages, eliminating the need for direct delivery to your door. Parcel lockers are also 24/7 automated post offices, where you can send shipments at any time.

The concept of parcel lockers has been around since the early 2000s. Deutsche Post – Germany’s postal service and part of DHL Group – was the first to introduce Packstations in Germany in 2003. We’ve been expanding our network ever since.

Every package locker works on the same principles, although they may vary in design. After you make an online purchase, a courier delivers your package to the designated locker. Using a unique code or digital key, they unlock one of the compartments and place your package inside. You then receive an email, text message, or app notification informing you that your package has been delivered and is ready for pick-up. To collect your order, you just need to visit the locker station and enter an access code, typically by scanning a QR code. This opens the locker door, where your package is waiting.

The same principle applies to sending parcels from a smart locker. After paying for postage online or via an app and receiving a code, you can enter your code (or scan a QR code) at the parcel locker to print your label and place your package in the compartment that opens.

Parcel lockers are usually placed in easily accessible locations, such as outside grocery stores. You can choose the nearest or most convenient locker as your delivery destination – and collect your package anytime, 24/7.

Learn more about how our parcel lockers work in Germany.

Package lockers become “smart” when we equip them with the latest technology, such as IoT connectivity or state-of-the-art identification systems. Smart parcel lockers allow us to handle both package pick-up and drop-off securely and efficiently.

This simplifies the process of returning items, known in the business as reverse logistics. All you have to do is scan the return code and place your unwanted item back in the locker. It’s like having a personal mailbox on your way to work, but this one is safe, secure, and able to notify the seller that the item is on its way.

Gone are the days of pacing by your window waiting for the delivery truck – or coming home to find a slip in the mailbox and having to make an extra trip to the post office to pick up your package. What’s more, smart lockers can eliminate the need for multiple couriers to ring your doorbell on a given day. The added value is threefold: convenience, efficiency, and sustainability. And in the age of GenZ and quick commerce, the demand for all three is high.

Enhancing customer convenience

Smart parcel lockers offer a solution to a critical consumer need: convenience. Customers can retrieve their packages anytime, which is particularly advantageous for those with hectic schedules. They allow you to grab your parcel on your way home from work, during a late-night snack run, or after your early morning workout.

Boosting operational efficiency

For businesses, smart parcel lockers mean optimized delivery routes, reduced fuel consumption, and improved efficiency. It’s a win-win: companies save money, and customers get their packages faster.

Reducing carbon emissions

Smart parcel lockers also lead to consolidated deliveries and fewer trips, lowering emissions and traffic congestion. Our experience shows that deliveries to parcel lockers reduce last-mile carbon emissions by 30%.

Around the world, the use of parcel lockers is growing exponentially. The global market is expected to grow from US$800 million in 2022 to over US$2 billion by 2030.

The Covid-19 pandemic played a role in this development. Many people have become more comfortable with online shopping and the convenient, contact-free delivery via smart lockers. Demand has increased. In the first three quarters of 2020, we saw a 78% rise in package deliveries to smart lockers.

The use of parcel lockers is already widespread in some places. They are popular in many European countries, such as Denmark, Finland, Germany, Poland, and Spain. In Poland, for example, 54% of online shoppers prefer to collect their orders from parcel lockers. The trend is also catching on in places like Norway, Sweden, the Netherlands, and Belgium, where consumers appreciate the convenience and round-the-clock availability.

The same is true in other markets. In North America, companies like Amazon are introducing parcel lockers across the continent, partly in response to the rise in doorstep package theft.

In the Asia Pacific region, the smart locker market is predicted to surge due to the increasing number of online buyers and government initiatives to develop smart cities. India has the highest projections, as post offices rapidly introduce new digital solutions. In China, e-commerce giants like Alibaba and JD.com are driving adoption, while in emerging e-commerce powerhouses like Vietnam, parcel lockers present significant opportunities for e-tailers.

Smart parcel lockers are popping up in places with lots of people, such as grocery stores, shopping centers, and universities. This highlights their versatility and potential for a wide range of applications.

For instance, refrigerated lockers have enabled safe storage of food products. During the pandemic, the demand for cold-store lockers increased due to the surge in online grocery shopping. This has inspired new ideas, including the installation of a raw oyster vending machine in Japan based on the parcel locker concept. Customers can now purchase oysters anytime.

Smart lockers can be placed on just about any site, giving 24/7 access for part deliveries, storage, and returns. For example, data center engineers use smart package locker solutions to return defective or replacement parts without having to make an extra trip to pick up or drop off shipments. This is becoming especially useful as more and more edge data centers go online, increasing the volume of inbound and outbound part movements. Hospitals and pharmacies are also introducing smart lockers to automate the process of medicine and prescription collection while reducing long wait times and offering patients a more convenient service. Universities are also exploring the use of smart lockers to automate laptop lending programs. The possibilities are endless.

Smart lockers are a trend that’s here to stay. They are set to play a vital role in the ever-changing e-commerce landscape. The blend of technology, convenience, and sustainability will make them an essential tool in the logistics industry.

With new technologies coming online, like computer vision and state-of-the-art labels, these lockers will only get smarter.

This first iteration of this article originally appeared on our blog, Logistics of Things. Read it here