Amazon Package Lockers Inks Greystar, EQR and AVB
Digested from The Wall Street Journal
Not long after announcing that it was moving into the package delivery space in August, Amazon is already inking deals with some of the biggest companies in the apartment sector.
The online shopping giant has already signed agreements to install its Hub locker systems in buildings containing 850,000 units across the U.S., according to The Wall Street Journal’s Laura Kusisto.
The company has signed agreements with AvalonBay Communities, Equity Residential, Greystar and Bozzuto Group. By next year, Greystar plans to offer the locker system to all communities that it owns or manages while AvalonBay plans to install the Hub in 30 communities this year and at least 70 more in 2018 if that goes well.
Some apartment owners and locker supplier partners contend that Amazon’s service is another step in that retailer’s efforts to collect data on its retail competitors as well as shopper data on the hundreds of residents. And, Amazon’s domination of the delivery locker market could lead to antitrust issues. Confidentially speaking, several apartment firms working with Amazon Hub have expressed displeasure with the working relationship it has with Amazon, citing that "they haven’t delivered as per their commitment and they are difficult to work with."
Kusisto writes that lockers, which have cellular connectivity, will cost about $10,000 to $20,000 initially, but apartment companies won’t pay a monthly fee.
“Not only are the other companies more expensive, but the installation is more expensive as well,” says Vanessa Siebern, Vice President at FPI. “Amazon has a one-time set-up fee, which is also very enticing.”
Many industry analysts have concluded that Amazon’s intention with their Hub lockers is to collect data on its retail competitors as well as shopper data on the hundreds of residents each property offers, including those who are not yet Amazon customers.
“The setting of this competitive battle between retailers and their unknowing shoppers will be multifamily properties,” says Melody Akhtari of Luxer One, which has been providing agnostic package lockers to apartment communities since 2013. Jeffrey Michael, Director of the University of Pacific’s Center for Business and Policy Research, told the Sacramento Business Journal earlier this month that the concept could “raise antitrust issues if Amazon were to use its online retail muscle to control the delivery locker market, and further use customer data to gain a competitive advantage over other retailers.”
Some communities have opted to not pursue the Amazon Hub lockers in an effort to maintain resident privacy and trust. “We believe an agnostic package acceptance solution is better for our residents and community,” says Steve Hallsey, EVP of Operations at Wood Partners. “We have worked hard to earn our residents’ trust and don’t intend to lose that so easily.”
Siebern says the Amazon lockers are enticing because they can be installed outdoors and do not need to be covered. Kusisto says this flexibility will make it easier for apartment owners to “add lockers if the volume of packages that residents order exceeds the space they have in mailrooms.”
Unfortunately, Amazon does not have an offer for oversized packages, such as furniture. One apartment industry supplier partner, Luxer One, offers an oversized locker designed for extra-large parcels, measuring over six feet high, three feet wide, and two feet deep.
“Our system was designed for residential package delivery, not for data mining,” Akhtari says.
Parcel Pending CEO Lori Torres says Amazon "is very focused on distribution and resident data, the goal of Parcel Pending and others in the industry is to solve the growing problem related to the last mile."
Georgianna W. Oliver, Vice President and General Manager of Package Concierge, a Gibraltar Industries Inc. Co., says, “While it’s a natural progression for Amazon to offer a package delivery solution, it doesn’t mean it is the right solution for the multifamily industry. Resident buying trends change – we are seeing more and more large packages being delivered on-site, it is imperative for operators to have a package management solution in place that solves not just for today’s demands but future demands. Our retailer agnostic, comprehensive solution ensures residents can still order anything they want and know it can be safely and securely delivered and stored at their community while ensuring the onsite staff can remain hands off in package management.”
Apartment owners tell Kusisto they don’t plan to charge residents to use the Hub initially but will offer it as an amenity.
Residents will probably be apartment owners’ best potential source of income with package lockers, because revenue sharing will not be possible, according to panelists at Maximize in Austin. “It will be tough to foster [revenue-sharing] relationships with people who have a model that does not depend on revenue sharing,” says Susan Vickery, Managing Director for Trammell Crow Residential.
Vickery should know. TCR recently inked a five-year agreement with the online shopping giant “The value play was being associated with that brand,” she says. “And they are cheaper.”