Global Parcel Shops and Locker Networks: Market Insight Report 2017, including Parcel Shops and Locker Networks Database
This report includes:
– An updated and expanded version of our previous report on parcel shops and locker networks: this previously covered Europe and has now been extended to worldwide coverage
– Comments on other developments in the last mile of the journey of a parcel from retailer to consumer.
– A spreadsheet providing details of 234 parcel shop and locker networks which, between them, have more than 380,000 locations, worldwide.
The final mile component of the internet retail delivery chain, from the parcel depot to the consumer, is the most expensive part of the overall cost of handing a B2C parcel. Our work has shown that, for leading UK carriers, this typically represents around 45% of total operating costs. This makes improvements in this area the top priority for the parcels industry worldwide. To meet these challenges, recent years have seen a succession of innovations aimed at improving last mile services, from both incumbent operators and new entrants.
The report analyses current parcel shop and locker networks and provides estimates of their likely revenue, based on our work in the market and the actual volumes achieved by, prices charged by, and revenues of several leading networks. It sets out the potential for further growth in location numbers, and the revenue that such growth would be likely to lead to.
In addition to parcel shops and locker networks, the report also reviews other last mile logistics market developments including:
– Carrier systems and consumer apps
– Home lockers
– Drones
– Robots and driverless vehicles
– In-boot delivery
– Self-employed courier networks for both standard and urgent deliveries
The report also sets out how parcel shop and locker networks have developed historically and how they are likely to do so in the future. This includes analysis of the relevant drivers of growth – in particular home shopping – setting out historical changes and available forecasts.
Summary
Market background
This report focuses on the range of methods being used and / or considered to improve last mile delivery.
In particular we look at networks of locations to facilitate last mile delivery of parcels to consumers and business consignees. The sites may be:
– Parcel shops, which are staffed outlets, most commonly convenience stores or other shops with long opening hours, including florists, petrol stations and other outlets.
– Secure locker banks, generally found in places which are accessible from early until late and are able to provide an adequate level of security, such as railway stations, supermarket car parks and petrol station forecourts.
These networks are now being rolled-out in most countries worldwide. As a result, a very large number of people are now within a short travel time of one or more such locations.
The networks have the potential to offer benefits to a range of different parties including consumers, parcel carriers, internet retailers, field service companies and site hosts by providing a combination of increased convenience and lower costs. In particular they:
– Improve the economics of typical parcels operations by increasing consolidation.
– Improve the success rate of consumer deliveries and hence satisfaction levels.
– Reduce time lost by field engineers travelling to the depot for spare parts.
– Provide additional footfall and hence revenue for the host locations
The other main last mile innovations discussed in the report are:
– Improvement in carrier systems and development of consumer apps
– Home lockers
– Drone delivery
– Robots and driverless vehicles
– In-boot delivery
– Courier delivery models
Market size and growth
The Apex Insight Parcel Shop and Locker Database contains more than 380,000 locker and parcel shop locations.
There are over 260,000 parcel shops and more than 120,000 locker locations.
China is by far the largest market with 161,812 locations, of which over 100,000 are lockers.
Revenue per location varies significantly between countries and according to the size and utilisation levels of networks
The most important driver of demand for locations is the level of business-to-consumer parcels generated by home shopping. Home shopping has grown in all countries covered by this report in recent years having more than doubled overall in the last five years.
– Internet retail sales continue to grow rapidly, from US$1,336bn in 2014 to US$2,050bn in 2016.
– Internet retail sales in Asia Pacific nearly doubled to reach US$1,152bn in 2016, overtaking both Europe and North America.
There is surprisingly little relationship between maturity (measured by internet retail sales as % of GDP) and rate of growth of internet retail markets
Competitive landscape
A series of organisations, including established parcel carriers and independents, is rolling out networks within countries and internationally. Leading networks include the following:
– Deutsche Post DHL’s Packstation locker network in Germany is the oldest and most successful parcel locker network in the world. It is also the largest locker network in Europe, with 2,750 locations
– The largest locker network in China is Hivebox. It has recently secured funding to significantly expand its network locations over the next two years.
– Amazon is rapidly expanding its pick up location networks, as well as its parcel locker networks in the US and Europe.
– UPS has expanded its Access Point network with 8,000 locations in the US and over 25,000 globally. It is currently investing in a parcel locker network in the US.
Other major operators of last mile networks include Sposter, Hermes, InPost, DPD and GLS.
Business models differ between operators
– Most (but not all) carrier-owned networks handle only their own volumes
– Most independent networks are open to a range of carriers. In some cases they act as first tier supplier, working directly with retailers, while in other cases they act as a subcontractor to their carrier partners
There are four key success factors that an independent network needs to achieve in order for its locations to be consistently selected by consumers:
– Open / agnostic network: a consumer’s preferred, local site should be open to them for use with any retailer or carrier
– Many locations: to ensure there is one close enough to every consumer
– Long hours: open when the consumer wants access
– Awareness: requiring significant consumer marketing effort.
Outlook
Demand for better last mile delivery will continue to grow with internet retail. New trials and deployments of last mile delivery methods continue to be announced.
In this environment, we expect growth in demand for parcel shops and lockers to continue. The growth of ‘Click-and-Collect’ type models which allow consumers to select a parcel shop or locker as an alternative to delivery to the home, could well lead to growth being faster than that of overall internet retail sales.
Many parcel shop and network operators, such as Hivebox, UPS, Amazon, InPost and DHL, have plans in place to grow location numbers.
Penetration levels vary dramatically between countries. For example:
– Poland currently has one location for every $300k of internet retail spend, while other European countries such as Denmark and Germany also have high densities.
– The equivalent figure for the US is one location for every $33m of spend, indicating the potential for further growth
Key challenges in achieving further growth include:
– Acceptance of concepts by all consumers, not just early-adopters
– Availability of sufficient sites for more lockers and, in particular, parcel shops.
– Availability of sufficient capacity at the sites to cope with anticipated levels of demand.
What does the database contain?
Database Fields:
– Network Name
– Country
– Region
– Website
– Owner
– Operation type (locker, parcel shop)
– Solution partner (e.g. locker manufacturer)
– Number of locations
– Transport partners
– Location partners (e.g. where shops or lockers are based)
– Customers (e.g. retailers)
– Business model (open vs closed)
– Notes (other information)
In such a dynamic area with new installations being carried out, both by incumbents and new entrants, it is inevitable that this will be a moving picture, and that no such list could ever be exhaustive. However, we are confident that this represents by far the most complete picture of parcel shop and locker deployments available.