What is a Smart Locker?

Updated May 1, 2024

Smart lockers are changing the way that consumers shop. In light of growing consumer preference for convenience and flexibility in how they pick up a package or online order, more retailers are recognising the benefits associated with integrating a smart locker system into their store pickup services.

In this article, we’ll break down exactly what a parcel locker is and what problems it can help businesses address. We’ll also look at some of the benefits associated with utilising smart retail parcel lockers, both from the retailer and from the customer’s perspective. Gaining a better understanding of how smart package lockers work and what role they play in a retail environment can provide valuable insights into how this smart locker technology is revolutionising retail shopping.

Smart Lockers Explained

A smart parcel locker is a storage solution that has integrated smart technology built into it, allowing it to automate package delivery, notification, and distribution. This enables clients with smart package lockers to simplify the package pickup process, making it more convenient for their customers to retrieve packages at their convenience using their smart devices.

Once a package is delivered into a smart locker system, the recipient is automatically notified that their package is ready for pickup and provided access instructions. Access instructions generally take the form of an access code, order number, or barcode that they can enter or scan from their mobile device. Once they arrive at the locker location, the user enters their verification information at the kiosk touch screen or accesses their assigned locker using a mobile app. Once the verification information is entered correctly, the right locker door will open, and the customer will be able to retrieve their package.

Why Choose a Smart Package Locker?

There are a number of reasons why retailers might choose to use a smart locker solution over a traditional locker or counter collection. Smart locker systems do a lot, automating a variety of functions that would typically be carried out by one or more employees. This improves store efficiency and creates opportunities for operational cost savings Retailers that use smart locker systems can save in more than one part of their store operations.

Automated smart locker technology, unlike a typical package delivery locker or traditional lockers, uses a PIN code and kiosk screen for easy access to the compartments.

For example, an electronic locker can significantly reduce labour costs associated with offering click-and-collect, or buy online, pick-up in-store (BOPIS) services. Once a store associate retrieves an order and delivers it into the intelligent locker system, they can return to other tasks around the store. In contrast, a typical BOPIS in retail process involves a staff member assisting with each step of the transaction.

Retailers can also use an electronic locker system to help save on last-mile shipping costs. Using a smart locker system to offer a Buy Online, Pick-Up in Locker (BOPIL) solution, in addition to services like curbside pickup, allows retailers to leverage the inventory at their store and the logistics network that supports it to quickly fulfil online orders. With intelligent locker solutions, consumers benefit from faster access to their online orders (with order fulfilment often faster than even the most expedited shipping services), while retailers reap the 90% reduction in shipping costs. Learn more about the difference between BOPIS vs. BOPIL offerings in this related blog post.

Of course, offering any in-store pickup option is beneficial to retail stores. Consider the importance of in-store pickup services for American home improvement retailer Lowe’s, for which the store pickup option accounts for 60% of its online sales. Many shoppers at Lowe’s and elsewhere like the value and convenience that online shopping provides but if given the option, will choose to pick up their product in a store. Now, Lowe’s has installed package locker solutions at all 1,700 of their stores to help better manage the onslaught of Click-and-Collect orders.¹

Customers who choose in-store pickup may also do so out of concern for the security of their purchase or other personal belongings. Package theft is becoming increasingly commonplace, especially as a greater amount of our shopping is done online. Retailers are beginning to use an electronic locker system to provide a secure storage solution through which they can fulfil orders faster and allow customers enhanced security for their purchases and the ability to retrieve orders at their convenience.

The biggest advantage of implementing an electronic locker system is that they can streamline the order pickup process. Intelligent locker solutions aren’t intended to replace Click-and-Collect services or home parcel delivery but are instead used to create an easy, efficient, and contactless pickup process. This ease and efficiency extend to both store staff and customers. Staff can quickly deliver orders into the system without having to go through the extra step of notifying the customer. In the same vein, the employee won’t have to be involved in the final order handoff to the customer.

Why Choose Click-and-Collect from a Smart Locker?

Parcel Pending Smart Retail Lockers are more than just a secure and smart locker solution. It is a valuable asset that can provide retailers with a number of benefits for improved store operations and end-user experience, including:

• Streamlined Operations: Retailers that use Click-and-Collect from smart lockers save an average of 45 hours per month managing online orders. Providing collection from a locker in store, or an open locker network is also proven to help retailers reduce shipping costs, namely last-mile delivery expenses.
• Improved Customer Experience and Customer Satisfaction: Providing a seamless, contactless collect-in-store solution makes customers 95% more likely to become recurring shoppers.²
• Increased Sales Volume: 61% of shoppers make an unplanned, additional purchase when retrieving their online orders.
• Higher Employee Engagement: By reducing the time spent managing click-and-collect orders, employees are also able to focus on being knowledgeable resources for customers.
• Industry-Trusted: Lowe’s selected Parcel Pending as their exclusive locker solution provider for all 1,700 stores. Learn more about the partnership by checking out the press release here.

Conclusion

In an effort to create more secure access control systems, many businesses are able to benefit from a smart locker solution – both in terms of their operation and cost. The use of smart retail lockers in retail environments offers significant advantages for both consumers and retailers. Customers appreciate smart lockers because the entire process is convenient and accessible from end to end; they can quite literally click and collect. The customer no longer needs to interact with store staff or wait in a crowded line to retrieve their order for package pickup. This allows a customer to quickly stop into a retail location and retrieve their package at a time when it’s convenient for them, creating greater customer satisfaction overall.

For retailers, the main benefit of a smart locker system is the data it provides. A smart locker system provides real-time analytics for each stage of order fulfilment, from the moment an order is placed in the lockers to the moment it’s picked up by the customer. This gives retailers access to data on a scale that simply can’t be matched by standard click and collect services, including real-time inventory tracking. An intelligent locking system also integrates easily with existing order management software programs and applications, ensuring that retailers can quickly and easily augment their in-store pickup services with smart locker capabilities.

Most importantly, smart lockers are an effective way to deliver convenience and flexibility for customers. Customers have shown that they have a strong desire for in-store pickup options; smart lockers allow retailers to offer this service while improving the overall efficiency of their in-store pickup options and store operations.

Retailers are showing an increased interest in secure storage solutions like BOPIL, ones that involve little-to-no human contact to protect both their customers and their employees. Having these protections in place is increasingly important to both employees and consumers.

Interested in finding out how BOPIL can help your business and your customers? Reach out to a member of our team today.

 

Sources:

1. Charm, Tamara, et al. McKinsey & Company. The great consumer shift: Ten charts that show how US shopping behavior is changing. (2020, August 4). https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-great-consumer-shift-ten-charts-that-show-how-us-shopping-behavior-is-changing.
2. Lowe’s. (2020, September 22). Lowe’s Leverages Innovative Technology to Launch Contactless Pickup Lockers Nationwide [Press Release]. Retrieved from: https://corporate.lowes.com/newsroom
3. Parcel Pending. (2019, December). Parcel Pending’s BOPIL® Solution Helps Major Shoe Retailer Improve Its BOPIS Experience [Case study]. Retrieved from: https://info.parcelpending.com/fortune-500-retailer-bopis-bopil