Interview – “Dense, convenient parcel locker networks work best”, says Swipbox

The closer to customers the better – that’s the key to maximising usage of parcel lockers by enabling rapid collections to free up more capacity, especially in the forthcoming peak season, Swipbox’s Commercial Director, Brian Jonasson, told CEP-Research.

As one of Europe’s leading suppliers of parcel lockers, the Danish company has years of experience running large networks in different countries. In particular, in March 2019 it launched the first dense network of the battery-powered Infinity parcel lockers, giving it more than two years of valuable data related to customer behaviour using this type of parcel locker.

Now, with Black Friday and Christmas shopping just around the corner, ensuring sufficient parcel capacity is as important as ever to retailers and carriers. So Swipbox has dived into its ‘treasure chest’ of locker usage data to zoom in on customer behaviour when it comes to the average time from parcel delivery to pickup.

Density is king

According to Jonasson, the results tell a clear story. “When we look into data for all our networks worldwide, one thing is very clear: Density is king when it comes to speed of end-user pick up. In fact, based on these data we believe that our customers can operate with double capacity if their end users pick up their parcels twice as fast as normal.”

Normal collection times in Swipbox’s parcel locker networks tend to be within 12-24 hours of the parcel delivery to the locker. Most parcels are picked up within 24 hours, including an impressive 60% picked up within 12 hours. Just over one third of parcels are even picked up within the first five hours. 

Jonasson stressed that the really interesting areas to look at are those with the quickest pickup times. “When we take a closer look at those areas where the end users consistently pick up parcels the fastest, it becomes clear that these are also the densest areas,” he explained.

“Take for instance urban areas and major cities with a large concentration of people and dense parcel locker networks – in these areas the end users pick up parcels 3-6 hours faster than average. In addition, we can see that speed increases the closer the parcel locker is placed to where people live or commute on a daily basis. In other words, dense networks result in shorter dwell-times, which again leads to a higher capacity,” he pointed out.

Fastest collections close to home

Asked whether he sees a significant difference in pick-up times between convenient lockers in residential areas and those in convenient commuter locations (such as train stations), Jonasson responded: “Yes, definitely. In general, pickup is much faster the closer we get to home. In fact, on average parcels are picked up 1-2 hours sooner when they are located close to where people live compared to those in commuter locations, regardless of their convenience.

“I guess there is a more practical side to this. Picking up parcels at train stations, metros, bus stops etc. means you have to carry your parcel further, possibly together with other luggage, making the option of picking it up closer to home the more desirable option.”

Open networks

The logical question, therefore, must be: “How can parcel locker companies, retailers and parcel carriers work better together to improve capacity management of parcel lockers?”

One answer, in Jonasson’s view, is to operate a flexible, open system. “One way to improve capacity management is to promote faster pickup simultaneously with increasing the daily delivery occurrence/same-day deliveries to the lockers.”

He stressed: “Our platform is designed to be truly open, giving customers the option to integrate many other use cases and revenue streams to utilise the lockers. For instance, shops may utilise lockers nearby for click and collect, handout of various items, etc.”

Financial incentives?

So are there any financial incentives to consumers to collect their parcel quickly (and thus free up a compartment) or even penalties if they take several days to collect (and thus block the compartment for a long time)?

“It has not yet been a practice in any of the networks we facilitate,” Jonasson responded. “However, it is definitely something I think we will see in the long run to elevate utilisation of capacity and to free up space, resulting in more satisfied end-user pickups and returns.” 

Urban or rural networks?

Given these user behaviour patterns, would it not be logical for Swipbox to focus more on ‘dense’ networks in more populated areas rather than on ‘thin’ networks (e.g. one locker per rural area) in order to maximise volume flows through the available capacity?

Jonasson made clear: “The location strategy is entirely up to our customers to decide.” Nevertheless, he continued: “All our data and research suggest that there is a clear preference for dense parcel locker networks closer to where people live, eliminating the inconvenience of home deliveries and in return resulting in higher utilization and better parcel dwell times. Hence, this will always be our recommendation in urban areas.

“Of course, rural areas with a smaller population living further apart don’t have the same need for density. At the same time, they should not be ignored. We actually see good utilisation levels in these areas, in which alternative pickup options are often scarce, and where the nearest post office can be quite far away. In addition, from a carrier point of view, parcel lockers can prove the more cost-efficient choice compared to alternative pickup solutions.”

Rapid scaling-up of capacity

Turning on the current market situation, just ahead of Black Friday and Christmas, Jonasson stressed: “At this moment all our locker networks have entered the annual peak period. This means we are seeing increased levels of utilisation and roll-out to accommodate this year’s volume – which is, in fact, most likely yet another new record.”

In response, Swipbox is ensuring sufficient capacity for its customers by offering rapid deployments and installations to scale up networks as required.

“It only takes around 5 minutes to install an Infinity parcel locker, which means that whether you’re simply moving a locker from one location to another or you’re installing new lockers, it’s extremely easy to create more convenience for the end users – and thereby increase the capacity,” Jonasson said.

Running on a battery and operated via Bluetooth, Swipbox Infinity lockers need neither a power outlet nor Wi-Fi. In addition, their rugged design is ideal for outdoor locations, enabling 24/7 access. Moreover, the company supplies its state-of-the-art lockers with an entire hardware and software ecosystem for dense networks right from the start, he underlined.