As online and offline commerce are getting closer to each other and customers schedules are getting more and more crowded, pick up lockers seem to become more useful and popular. Ever asked yourself – how do pickup lockers work?
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They are versatile, easy to use and something customers need from online and in-store retailers. So let’s dig in and see how they work and who should use them.
What is a Pick Up Locker?
First off – what is a pick up locker? Simply put it is an area of lockers where retailers can drop off merchandise and customers can pick it up. Amazon has been a pioneer in this field, with Amazon Lockers opening up the gates to a new type of fulfilment.
The pick up lockers work by assigning a specific location to packages and sending pick up codes to customers. The customers can then go to their designated pick up location, enter the security code and grab their packages.
After Amazon has built their first experimental pick up lockers, others soon followed.
Some of those that developed their own systems of pick up (and ship) lockers are 3PL companies. For example FedEx and UPS have developed quite advanced pick up and drop off locations. UPS has named theirs “Access Points” and they’re building a network able to sustain growing demand.
FedEx has developed a network of “Ship&Get Self Service Lockers“. With their lockers one can drop off items for shipment or receive packages.
Both are growing really fast and soon others will follow suit. Even startups have ventured in this area with some highlights being Swapbox, an Y Combinator startup and Bufferbox, a company that was recently acquired by Google. However, due to the fact that this is a very competitive, capital intensive niche, both startups are now dead.
So yes, they are popular but how do pickup lockers work, especially from a retailer point of view?
How do pickup lockers work for large retailers?
One very specific use case for the pick-up locker system would be large retail chains. For example Walmart announced their Grab & Go lockers following their Site to Store Self Service Lockers experiment.
Apart from the internal fulfilment challenges, retailers need to focus on some key aspects regarding the development and implementation of such pick up locker systems:
1. How can pickup lockers be secured?
For obvious reasons there needs to be a secure access to shipped goods. To do so each drop off will have to issue a security code that can be decrypted and accessed with the private code the customer will receive.
The systems will also have to have fall-back security systems such as video surveillance and locking systems in case of hacking attempts (there will be some).
Security code should work online but also have a fall-back local solution that can work in case internet connection is off.
2. Connecting the lockers with logistics
The pick-up locker system works with other fulfilment operations and will have to input status data directly into TMS (transport management systems) so shipping personnel could be directed to the correct pick up locker area and the specific pick up locker.
As packages differ in size, specific information regarding the type of lockers that are available should be available in real time so packages are stored correctly.
3. How do pickup lockers communicate?
So far most pick up lockers use alphanumeric codes to help users get accustomed to picking up their packages without any hassle. But these codes pose threats in terms of security. While these codes can always be an option and can be easily sent to any device, with smartphones and smartphone apps on the rise, some other solutions may work even better.
One such option would be QR codes embedded in the retailer’s mobile application. The codes can be generated on the fly based on a secured algorithm that neither exposes the code and can also work within the application the customer already uses, thus improving loyalty.
4. What is the future of connectivity for pickup lockers?
With so many developing their own pick-up locker systems, a connectivity protocol should become the norm. With such a protocol FedEx could ship to either Amazon, Walmart or even UPS lockers for example, improving cross-retailer experience and creating economies of scale.
That being said, the development of pick-up locker systems is obviously a bit more complex than these few paragraphs but I wanted to give you a starting point and explore some of the challenges.