Given the surging popularity of apartment living and the ever-growing consumer trend of e-commerce, the rental housing industry is in the prime position to help dictate the way packages are delivered to residential customers.
That was the finding of several property management panelists who spoke to those trends during NMHC’s OpTech Conference in November.
Margette Hepfner, Vice President Client Services, Lincoln Property Company, says her company has done time studies concerning onsite package management. “This is a big deal for operations, and determining what works best for each asset is key.
“As an industry, we have the opportunity to set the trend on package management. The carriers are listening. Our supplier partners are responsive to our needs. Our residents expect to be able to receive packages to their homes.”
Hepfner says package delivery can be a key selling point for communities. “If anything, at this point, I’d say we are not marketing this service enough.”
Steve Hallsey, Executive Vice President of Operations, Wood Partners, says installing package lockers is not an expense. “Actually, they are cost-savers,” Hallsey says. “Think about it: If you don’t have them, residents are not going to renew. That costs you money.”
The surge in mobile device use has carried into e-commerce. Parcel Pending President Lori Torres shares that consumers not only research items on their phones, they also make quick purchases. Smartphones are forecast to drive 68 percent of the season’s shipping traffic. SalesForce estimates that there will be more visits made on mobile phones this upcoming holiday season than across all devices during the 2015 holiday season.
This year, UPS expects to deliver about 800 million holiday packages, up from the 750 million it delivered last year.
“It’s important for management companies to have that ‘reality’ discussion with their owners,” Hepfner says. “Your owners will be asking questions about strategy and you need to have answers. They know there are different types of locker systems, but we, as the operator, need to be an expert on the best solution for their asset. Let them know that this isn’t just another marketing recommendation. Recommend space-constraint alternatives for communities that they feel might not have room for lockers.”
New developments must take into account ample space for delivery and storage—some are not doing this, the panel shared, specifically advising that properties ensure the space is designed for future needs such as smart-lock access and refrigerated storage areas and to include trash and recycle bins close to the package room. It is advisable that their supplier partners work closely with their development teams to ensure appropriate software connectivity (Cat-5; Internet, Wi-Fi) and to consider designing this space as a communal hot spot, where residents can engage. Consideration also must be given to expanding office hours, as necessary.
Retrofitting creates additional strategic thinking, Hepfner says. “Do you add more shelves? Do you convert or shrink your business center? Because we’re storing files digitally, perhaps we have areas within the office that can be repurposed.”
The panel concurs that their communities are not being held liable for lost or damaged packages, and point out that communication with residents about when their packages are available for pick-up is critical.
Apt Communities Share Their Numbers
The session included results from the 2018 NMHC/Kingsley Package Delivery Report, which featured data on delivery and strategy based on communities from 29 industry-leading apartment firms who own and/or operate more than 1.2 million units. Responses were received from 2,100 communities representing 562,880 units.
Class “A” properties comprised 63 percent of responses and “B” totaled 30.1 percent. Nearly one-quarter (23.2 percent) were built between one and five years ago, representing the largest age block. The survey offers statistical breakdowns based on property type and individual markets.
Just 40 percent of respondents says the capacity of their package lockers is sufficient for resident demand year-round.
Leasing agents do the majority of package handling (81 percent of respondents) followed by community managers (79 percent) and maintenance staff (34 percent).
Sixty-seven percent of respondents say packages are held at the management office and more than one-third (35.2 percent) manage package delivery through package lockers; 51.6 percent have the package carrier deliver to the resident door. Eight percent of the communities charge residents an extra fee for package delivery.
Nearly half (48 percent) say that carriers follow delivery instructions. Of those who do not, 49 percent drop packages at leasing office, 47 percent leave them in the lobby, 37 percent put them at the residents’ front door and 30 percent drop packages in the locker area without putting them into the lockers.
During a typical week, 42.8 percent of the communities receive less than 50 packages, 20.1 percent receive from 51 to 100 packages and 22.1 percent receive more than 200.
Some 57.2 percent of communities will hold packages for residents at the leasing office indefinitely. One-quarter (25.6 percent) do so for three to five days. Just more than half (53.5 percent) say their office team handles return packages from residents and provides them for the carrier to pick-up.
E-commerce continues to create a waste management challenge in many communities (41.1 percent) because of the large volume of cardboard and packaging materials being discarded.
Interest in refrigerated package lockers is on the rise. Given the growing popularity of food delivery services and mail-order food offerings such as Blue Apron, some commented that demand for these specialized lockers might increase.
However, others say shipped food is sufficiently packaged and refrigeration is unnecessary. Refrigerated lockers would be more suitable for deliveries such as flowers, which would also necessitate larger locker spaces because of bouquet height.
According to the NMHC/Kingsley report, of those that have refrigerated lockers, 43.5 percent say they are used daily.
Commented one locker supplier, “We’re finding that once we install refrigerated lockers at a community, that community begins to ask about heated lockers and freezer lockers.”
Refrigerated lockers, one supplier suggests, costs approximately 30 percent more than standard lockers.
Crunch Time: Handling Black Friday, Cyber Monday
The total number of packages shipped and delivered in the United States to Luxer One clients during Black Friday increased by 68 percent, compared to the week before Black Friday. This jump follows the surge trend experienced in 2017, when package volume increased by 80 percent pre-Black Friday compared to post-Black Friday.
Apartment communities saw 5 percent more packages than in 2017. On an individual level, shoppers ordered more packages this year than the 2017 Black Friday weekend—but not by a large margin. The week following Black Friday 2018 saw more packages per day delivered than in 2017—and for that matter, any other week in history.
Parcel Pending reports that its property clients saw year-over-year growth of 20 percent in package deliveries during Cyber Monday week and a 63 percent bump in deliveries during that week compared to non-holiday weeks.
One robust example was Waterton’s Presidential Towers in Chicago. The community received 5,521 packages through Luxer One Nov. 8-22 (the two weeks leading up to Thanksgiving), and then delivery volume jumped to 9,074 packages in the two weeks after Black Friday.
“Generally speaking, shoppers seem to have settled into a groove; properties that had our lockers last year saw only 5 percent more total packages delivered this year during the same time period,” says Melody Akhtari, Director of Communications, Luxer One. This year, 75 percent more packages were delivered to oversized lockers in the week after Black Friday than the previous week.
“Besides giving this unique locker its biggest workout of the year, this increase highlights one of the most important ways a property can future-proof their package management solution: Pay attention to scalability,” she says. “This scalability created a safety net that ensured thousands of packages were securely delivered to the lockers, instead of forcing the carriers to attempt delivery later or leave the packages in the open, leaving them vulnerable to package theft.”
Residents picked up their packages 43 percent faster this year. The average pickup time for 2018 is 16.4 hours. By 10 days after Black Friday, the rate had dropped to only 9.4 hours.
“This happened naturally; residents are just inherently more excited to pick up their packages during the holiday season,” Akhtari says.
Daily package volume is continued to rise in December. For property managers, Black Friday is only the beginning. The package delivery spike is on track to remain elevated throughout December, Akhtari says.
Two weeks after Black Friday, daily delivery volume has climbed to 98 percent higher than usual.