With more than 5 billion items shipped through Amazon Prime in 2017, parcels are piling up at multifamily properties. New package management solutions promise peace of mind for both you and your residents. What are your options?
The online shopping boom has created “prime” conditions for parcel overflow at your properties. In fact, The Verge reports that Amazon shipped more than 5 billion items through its Prime program in 2017. That figure doesn’t even begin to account for the number of packages delivered by competing services like Jet, Overstock, Blue Apron — or even Amazon’s non-Prime customers.
In 2017, multifamily owner and operator AvalonBay averaged 1,000 package deliveries per month at each of its 288 apartment communities, a doubling from the year before. But the issue at hand isn’t simply the volume of packages received. The drain on your staff’s time and labor is preventing them from attending to more important property concerns. Houston-based Camden Property Trust estimated 10 minutes in lost productivity for each package across its 59,000 units in 2015. At a rate of $20 an hour for employee wages, package management was costing them an estimated $3.3 million annually.
Still, the prevailing industry view of package management has shifted from courtesy to competitive necessity, as 47% of surveyed renters now receive at least 3 packages per month and 57% are “interested or highly interested in package lockers” as a solution (2017 NMHC/Kingsley Apartment Renter Preferences Report). So although accepting, storing, sorting and distributing an increasing volume of packages compound staff stress and strain on your bottom line, fulfilling package management provides an important and now expected amenity. It also presents an opportunity to provide additional value to residents.
Companies in the industry are trying to keep their heads above the deluge — experimenting with fixes that range from electronic lockers to alternative delivery services, from smart locks to offsite storage. And a multitude of services have stepped up to help you address your residents’ demand for convenience while freeing up your employees on the front-line to focus on what they do best. Which package solution might be best for your properties?
Taking package management off your hands
Dreaming of a package-free leasing office? Automated package management solutions that remove your property managers from the equation fall into two main categories: A) onsite electronic locker “package centers” installed at the property, and B) offsite storage with direct-to-resident delivery services.
The benefits of upgrading your package management system with either of these approaches are pretty straightforward. Not only do you save resources and reduce stress by partnering with another party to handle resident packages and deliveries — you’re also outsourcing liability for lost, damaged or stolen packages. And your chosen vendor’s support arm takes care of end-user support.
Package solutions like these also represent an additional amenity and offer a valuable service. Renters may be willing to pay a higher rental rate to take advantage of the system, enabling you to cover the cost of implementation.
Here’s a quick overview on how each type of solution generally works, including the benefits and drawbacks:
A. Onsite Electronic Lockers
A physical “package center” consisting of electronically accessed lockers is installed on your property. Upon package delivery, the courier follows the integrated touchscreen’s prompts to select an appropriately sized locker and enters the recipient’s name. A locker then opens, allowing the courier to place the package inside.
When the locker’s door is closed, the system automatically notifies the recipient of delivery and provides them with a unique PIN they can then use to open the locker door (Multifamily amenity trends: The latest in package delivery centers).
Locker-based systems provide a secure space for delivered packages to be stored until residents can retrieve them, minimizing the risk of theft. Residents can access their packages any time, day or night.
Potential drawbacks: Installing these systems can be a pricey upfront investment, with the average package locker system costing around $14,000. And your property or properties may not have the space to accommodate installation. They could be vulnerable to hacking, and residents, for their part, may be reluctant to switch systems, especially if they aren’t tech-savvy.
During busy times like the holidays, the lockers may fill to capacity, especially if residents don’t pick up packages on time (they might be on vacation!), requiring staff to once again handle excess packages. And not all locker systems currently accept oversized packages either, placing package liability back in your pocket — although Luxer One vows 100% package acceptance.
Another concern is that due to the immense and growing volume of packages being shipped, the locker-based package system you install today might be insufficient down the road as online buying trends accelerate.
B. Offsite Storage with Direct-to-Resident Delivery Service
Offsite storage with direct-to-resident delivery services have arisen as an alternative to locker-based systems — and address some of their drawbacks.
Residents ship their packages to an offsite warehouse and then the vendor communicates with the resident to schedule a convenient time for the parcels to be hand-delivered to their door. Michael Patton, Founder & CEO of one such company (Fetch) says his company offers a more scalable solution: “e-commerce growth rates continue to accelerate, and at a certain point properties simply don’t have the on-site space or time to dedicate to packages. Our model allows us to scale alongside growing package volumes.” Doorman, a similar service, pledges unlimited storage. Secure storage and direct-to-door delivery also minimizes the risk of theft.
Potential drawbacks: When involving an offsite intermediary to store and deliver packages to residents, there exists more room for human error. Residents could fail to give adequate instruction for delivery, resulting in packages that end up back in the hands of your staff. The available delivery hours may not work for all residents. Security concerns may come into play as delivery personnel frequently visit both the property and residents’ doors. Vulnerability to hacking may also be a concern. These systems are relatively young so we’ll have to watch how they perform over time and whether multiple scheduled deliveries each day will bring increased traffic to the property and surrounding streets.
Choosing a vendor
If you’ve read this far, you might be ready to free your staff from the drudgery of parcel management by automating your package system through a vendor. Companies like Luxer One and Parcel Pending have been operating since 2014 and 2013, installing sets of lockers that are easily accessible to residents who need them. Multifamily Executive reports that “companies like Parcel Pending, Package Concierge, and Luxer One can cost anywhere from $6,000 to $20,000, plus a monthly fee for maintenance and tech support.” Parcel Pending or Luxer One maintain the security of their software as part of your monthly payments.
Late last year Amazon entered the game as well, signing major deals to bring their “Amazon Hub” to owners and managers representing more than 850,000 apartment units across the U.S. The Wall Street Journal reports that apartment building owners pay about $10,000 to $20,000 to purchase these lockers initially, but don’t pay a monthly fee. Amazon Hub isn’t Amazon-only either; the system accepts packages from all suppliers.
Simultaneously, new delivery services are springing up to offer schedulable deliveries and hand-delivery to individual doors. Services like Fetch and Doorman offer very granular windows of service to ensure that the resident has the opportunity to be there when the package arrives (and also be notified on their devices/email when the package arrives). But Amazon and Jet.com have gone one step further with services that permit residents to grant unit access to delivery personnel.
According to TechCrunch, Jet.com and Latch are partnering in a “joint investment” to install their smart lock service in 1,000 apartment buildings in NYC. Amazon Key has recently expanded their service to include the trunks of cars, although as with Jet.com, the service is currently only available in limited markets.
Besides the potential for human error, you may be nervous about the idea of your residents remotely allowing package handlers to enter their homes (your units!) for convenience. There’s no doubt that the more cutting-edge services like Amazon Key and Latch introduce a potential security concern, as they involve home entry. Suspicious package deliveries have recently been in the news, driving vigilance in examining packages received. Whether those concerns could be alleviated by vendor reputation and a strong track record depend on the opinions of renters, property owners and management companies. Real-time mobile inspections like HappyCo offers can help you maintain your security systems, ensuring surveillance cameras are functioning across your properties.
There is a third, more extreme option for responding to the piles of packages spawned by e-commerce. Camden Property Trust, in 2015 the nation’s 14th-largest property manager, banned package deliveries to all management offices across its entire portfolio. If you are considering taking such a drastic action to relieve the burden of package management, proceed with caution. Residents will be upset. Some may leave your properties. So get clear on the needs of your target market and how much of a resident exodus you are willing to sustain before moving forward with a similar “Option C” policy.
What’s right for your company?
The rise of package and delivery management services open up a field of new questions for property owners and operators. What kinds of services do your residents need in your area and your niche? Would it be best for you to create a centralized area with secure lockers? Can you accommodate the installation of lockers without significant remodeling? Is a partnership like that between Jet.com and Latch investing in your locality? Do you desire refrigerated storage as perishable food delivery rises? These and similar questions are important to ask yourself before you make your decision. Just remember that ultimately you want to provide excellent service to your residents — and if you can raise their level of happiness while unloading the stress all that cardboard imposes on your employees, then even better.
Ultimately you want to provide excellent service to your residents — and if you can raise their level of happiness while unloading the stress all that cardboard imposes on your employees, then even better.
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