By Kushal Nahata, CEO & Co-founder, FarEye
Savvy customers, especially millennials, are always on the move. This makes doorstep deliveries challenging. How does one successfully handover goods to a customer when he or she is hardly home? This results in poor first attempt delivery rates and increases delivery costs owing to reattempts.
The Need to Introduce Smart Lockers
Well, this is not the only reason behind rising volumes of first-attempt delivery failures, inaccurate delivery addresses is another problem. For instance, a Factory Daily report revealed that about 30 per cent to 40 per cent of the pin codes in India are unstructured and written incorrectly, leading to a large number of shipments being routed to wrong locations. This problem costs Indian businesses across logistics, manufacturing and emergency services $10 billion to $14 billion a year.
Not only India, incorrect and inadequate postal address is a major problem in countries like UAE as well. It is not at all surprising to see packages addressed to a particular person with no accurate delivery address. In these cases either the delivery executives undertake multiple trips before successfully delivering a parcel, or spend time and money in investigating, researching and finding out where is the intended delivery address.
Increasing First-Attempt Delivery Success
Smart Lockers can drastically boost first-attempt success rates. The question is how? Today, with smart lockers, it does not matter if a customer is present at his or her home or not. A delivery executive simply delivers a parcel in a locker and the customer, according to his or her convenience, can safely pick it up from there. This completely eliminates the need for a customer to be available for delivery and from a delivery executive’s perspective, smart lockers do away with multiple delivery attempts and the need to invest manual efforts looking for customer addresses.
Delivery through smart lockers is safe as well. These lockers are securely locked. It can be opened by using an OTP or QR code that only the customer knows. Such lockers also play an important role in driving same-day delivery success just by eliminating the need for delivering at a customer’s doorstep. According to McKinsey & Company, 20 to 25 per cent of consumers are even willing to pay significant premiums to receive their items on the same day. This makes same-day deliveries a lucrative offering for business but at the same time, it increases the pressure to boost first-attempt delivery success volumes.
Scattered yet Growing Adoption
Even though there are multiple advantages of executing deliveries through smart lockers, its adoption is extremely scattered across geographies. Some of the reasons being the availability of secure locations, customer mindsets, local government regulations among others.
Countries like Finland, Denmark, Germany, China have witnessed quite some momentum with locker technologies and on the other hand countries like Sweden and the Netherlands are yet to see a similar level of traction. India for instance, has just started to explore this means of delivery. For instance, China, Germany, and the US account for more than 40 per cent of the parcel locker market.
With regard to India, the concept of smart lockers is fairly new. It will take some time to gain momentum. But since a large part of India’s population is millennials, the adoption of smart lockers should not take too long. Ensuring sustainability and scalability of smart locker deliveries are also important to drive the adoption of this concept.
Businesses must ensure high levels of both IT and physical security of these lockers. They need to ensure quick availability of real-estate in case there is a need to scale operations and more lockers will automatically make managing these lockers complex. Hence, partnering with the right technology and infrastructure provider for executing seamless deliveries through smart lockers will be key.
Ensuring Seamless Deliveries through Smart Lockers
When it comes to enhancing last-mile operations, making deliveries profitable and boosting first-attempt deliveries smart lockers will gradually play an important role. Today, advanced last-mile delivery platforms can seamlessly integrate with disparate locker technologies and empower businesses to gain end-to-end visibility of delivery operations right from the time a customer places an order until the time she gets it from the locker.
These platforms can automatically trigger notifications and alerts to customers and delivery managers once a parcel is placed inside a locker. It boosts delivery experience by empowering customers to select locker locations based on their convenience.
In a nutshell, smart lockers assure customers convenience, reliability, speed, hassle-free delivery, security and at the same time, help businesses, especially e-commerce and post and parcel organisations, to optimise last-mile delivery operations.
