Smart lockers are the future of package delivery and package pickup for retailers. To understand why, we have to delve into the evolution of order fulfillment.
Traditionally, when customers ordered products or goods online, they were shipped to their house. Not long thereafter, retailers started rolling out BOPIS (buy online, pick up in-store) and created the order pickup desk. Retailers get the order picked up and capitalize on the attachment sales because of foot traffic on these 10 BOPIS orders that were picked up each day. Perfect system, everybody is happy.
Then, the volume came and it brought a ton of problems with it. BOPIS has been growing at a 25% rate year-over-year for the past decade. Suddenly, there are not 10 orders but 100 orders being picked up each day. That single associate staffing the order pickup desk is now a full team that has to coordinate operations. There are packages everywhere and they are piling up. All the while, the line and wait time for customers is getting longer.
Then, the complexity came and it brought a ton of problems with it. BOPIS is great but smart people got together and figured out different ways to do online order fulfillment. Introducing BOSS (buy online, ship to store) for items not currently stocked in stores that customers still want to pick up there. Introducing BODFS (buy online, deliver from store) for items that are in stores that customers don’t want to pick up. For all of these new fulfillment types, the same small team that was handling the BOPIS volume is now being asked to handle all of these new orders. Each one needs to be picked up from the order pickup desk by customers or delivery drivers. All the while, the line and wait time for customers is getting longer.
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Then, the pandemic came and it brought a ton of problems with it. With the increased demand and complexity already overburdening the order fulfillment team, they now have to deal with contactless delivery. The time and energy spent in sanitizing and delivering contactlessly has added more stress and complexity to an already overburdened staff. All the while, the line and wait time for customers is getting longer.
Retailers can choose to bring on even more labor, or choose a better way to do business and enhance customer experience at the same time.
What are Smart Lockers?
Smart lockers are a modern order fulfillment self-checkout solution. They can be placed at a retail location, or somewhere nearby, and installed either indoors or outside.
Like a standard locker, items are placed inside and locked tight. When customers are ready to pick up their goods, they travel to the locker location and open it using either a mobile app or by scanning a QR code at the locker touchscreen. Each code is specific to that order number so each delivery can only be picked up by the appropriate customer.
Access is granted instantaneously — the locker pops open and customers can retrieve their item.
Why do Retailers use Smart Lockers?
Beyond the smart capabilities of the locker system, consider for a moment what goes into parcel and goods retrieval at a store. You need a dedicated counter with queue lanes and a crew of employees. Then, you need a place to store those items after they’re picked from the shelves. You also need an order management system to manually check out orders once customers are there for pickup.
In small volumes, this system works great. However, in today’s landscape, with ever-increasing order volume — and a fresh influx of volume because of the pandemic — there’s even more complexity when running a successful order fulfillment operation. Improving efficiency and lowering costs calls for reducing many complex processes, and changing how you do business is necessary in today’s environment. Cue smart lockers, which solve a lot of the problems of standard package pickup and which automate nearly the entire operation.
After an online order is picked, the retail associate stages the order in the smart locker. That is the last time an associate will touch the order. Every other aspect of the pickup process is automated with the locker system’s integration with the retailer’s order management system. When the order is staged, the retailer’s system is updated. When a customer picks up their order, the retailer’s system is updated.
There is clear ROI from a labor standpoint, but there is also efficiency gained on the customer pickup. The Net Promoter Scores for lockers are consistently higher than traditional order checkout, for example. When the customer arrives at the store, they walk up to the locker, enter the code, grab their item and leave. It takes approximately five seconds in total. There are no interactions with other customers or associates, and there’s no waiting around (six feet apart or not). It’s safe, sanitary and fast.
Retailers like The Home Depot, Macy’s, Foot Locker and even UPS Stores have started making smart lockers their go-to order fulfillment method for BOPIS, BOSS and BODFS. Spread out across more than 3,000 live retail locations, the lockers offer a consistent contactless pickup experience that saves labor costs and enhances customer experience.
We Could All Use a Little Time Back and a Little Peace of Mind
Customers continue to choose the options that make their lives easier. Retailers continue to look for ways to grow margin. The pandemic has left both sides looking for ways to conduct their business safely. Why compromise? Why not achieve all of these objectives with one solution?
Smart lockers are the future of package pickup services. When weighed against the traditional order fulfillment options, the choice is clear.
Josh Middlebrooks is President of Luxer One.
