With the complete boom of Amazon, Walmart, Shopify and the like, people barely have a reason to leave their homes to do any shopping. This shift in the way that people shop has impacted the delivery and packaging processes. Commenting on this, Jake Fingert, General Partner at Camber Creek, discusses different ways that property managers and consumers can deal with and navigate this issue.
Digital Journal: How has the package delivery industry changed in the past few years?
Jake Fingert: Ecommerce is growing rapidly and is fueling a massive increase in package delivery. In 2009, ecommerce sales in the U.S. totaled under $15 billion. In 2018, consumers spent $517 billion. There’s no precise public data on total packages. But to give you a flavor, according to the best available public estimates, Amazon alone shipped between 3 and 4 billion packages worldwide in 2018. These packages are piling up on doorsteps and in lobbies across the U.S.
DJ: What are the main challenges arising from the push towards online ordering?
Fingert: Commercial buildings have always had to deal with package delivery, and most packages are delivered during business hours and can be handed directly over to tenants. But for multi-family property owners and managers, this is a whole new world, as packages are streaming in every day from USPS, FedEx, UPS, and Amazon’s own fulfillment services, literally flooding lobbies. The volume of packages creates headaches for on-site staff, who waste time and energy accepting and sorting packages; for tenants, who worry a package will get lost in the shuffle, and for property managers who have to deal with a new set of costs (for the staff time or technology involved in managing the packages).
DJ: What is the effect on consumers?
Fingert:Ecommerce has given consumers access to a vast range of goods, helping online retailers prosper while reducing traffic and sales for more traditional brick and mortar retailers. From a package delivery perspective, consumers in multi-family buildings are increasingly demanding package management as a basic amenity. In a recent National Multifamily Housing Council survey, residents ranked package services as the second amenity, behind only gyms.
DJ: How can digital technologies assist? What are some key examples of these enabling technologies?
Fingert:Market solutions vary by building type. In buildings without doormen, the need to manage package deliveries has created a strong demand for access technologies. For roughly 4,000 years, people have been building locks based on a simple idea: locks can be opened by keys, and those keys can be given to the trusted individuals who should have access. But the rise of package delivery has put pressure on that model – now, on any given day, a new deliveryman or deliverywoman needs building access
Companies like Latch have stepped in. Latch has built a partnership with UPS that lets UPS deliver a package directly into a building lobby in 10 cities around the country. In larger multi-family buildings, property managers are experimenting with three basic solutions. These are:
First, managing packages at a central location. Lockers are the preferred strategy. These lockers accept packages from multiple carriers, automatically notify residents of new packages, and provide one-time use code to access those packages. According to National Multi-Family Housing Council survey, 35% of apartment buildings now use package lockers. 97 percent of the market for lockers is controlled by top four providers: Luxer One, Parcel Pending, Amazon Lockers, and Package Concierge. Other providers include DHL Packstation, Smiota, and Southwest Solutions Group.
The major companies generally offer indoor and outdoor options with multiple sizes and configurations. In addition to multi-family, they offer solutions for retail, office, and university customers. 5 percent of buildings still use package rooms as their primary method of package management. The locker companies – Luxer, Package Concierge and Parcel Pending – all offer package room access control panels that, like their lockers, notify residents and generate one-time access codes. Buildings can also track packages and notify residents themselves using software like Notifii. With Notifii, on-site staff scan packages, emails or texts are automatically sent to residents, who then pick up the packages from a front desk or package room. Notifii integrates with Yardi, Entrata, MRI, and RealPage. MRI, RealPage and Entrata offer similar modules.
Second, facilitating the delivery of packages directly to or into tenant’s apartments. According to the National Multi-Family Housing Council survey, 18 percent of buildings deliver at least some packages to tenants’ apartment doors or directly into the units. Property managers have a variety of software tools available to help manage this process. MRI’s software, for example, provides for in-unit delivery, a service for which buildings typically charge a premium.
Alternatively, property managers can contract with third-party providers that will handle this ‘last 100 feet’ problem. For example, Valet Living will operate on-site in an apartment building to accept packages and deliver those packages into residents’ apartments.
Finally, managing packages offsite and coordinate directly with tenants for delivery. A third approach is to manage packages offsite. The leading company offering this service is Fetch Package. Doorman, which offered a similar service, shut down in 2017.
Fetch Packages focuses exclusively on managing packages for multi-family buildings. Residents change their shipping address to a Fetch facility; residents are notified when a package arrives at Fetch; residents schedule a delivery time with Fetch when they will be home to accept the package; and then Fetch delivers the package. Doorman, which launched in 2015 and shut down in 2017, had a broader vision to create a more customized, customer-centric delivery model for retailers.
For property managers, the service promised to deliver packages to tenants within one-hour time windows, using a similar approach as Fetch. However, Doorman found that customers who signed up for Doorman’s monthly plans were heavy online shoppers (that is, there was an adverse selection problem) and the company couldn’t make the delivery economics work. Property managers are also exploring strategies for limiting package delivery in the first place.
For example, the Bozzuto Group is exploring the creation of ‘tool libraries’ that offer residents basic goods for rent, like vacuum cleaners, to reduce package delivery and in-unit storage needs. Other buildings offer the concierge service Hello Alfred. Hello Alfred will shop for specific items (alleviating the need to have a product delivered) or pick up packages from post offices or other locations on behalf of tenants.
Other buildings have also taken more dramatic measures. For example, Camden Properties banned all delivery to their management offices. Residents can still have packages sent directly to their door.
DJ: In which other ways can digital technology assist property management?
Fingert:Property managers are deploying digital technology to solve dozens of problems in commercial and multi-family buildings: controlling access, optimizing energy usage, and giving residents and tenants more control over their units, to name a few examples.
We just recently invested in a company called PetScreening.com that helps property managers and tenants create a safe environment for pets by registering new pets in a building, making sure residents with legitimate service animals are not charged pet fees, and discouraging fraudulent service animal claims. Or to use the example of Latch, Latch doesn’t only help with package deliveries – it lets residents in a building give access to friends or family with a simple numeric code, freeing on-site staff from having to keep track of spare keys
