Why are parcel lockers not working in the UK last mile?

Despite the internet shopping boom and the march of click-and-collect, ByBox has recently withdrawn its consumer service and our ongoing last mile delivery research suggests that InPost is struggling to gain traction with volumes at its parcel lockers remaining low.

At the same time, Parcel shops, which perform a very similar function, are performing well, with growing volumes supporting the growth of the existing chains and the roll-out of a new one by DPD. And parcel lockers have been successful elsewhere – in particular in Germany, where DHL’s Pakstations are widespread. And ByBox’s lockers are successful in UK B2B applications, such as getting parts to and from field engineers

We don’t yet know the answer, but these are possible reasons.

The wrong business model?
Both parcel locker networks launched their consumer offering as an open network to serve a range of carriers rather than under the wing of a leading carrier. They did so at the time that many carriers were deciding that they wanted to have their own networks with, for example, UPS acquiring Kiala and rapidly rolling out its Access Points. But some of the parcel shop networks, in particular Collect Plus, do deal successfully with multiple carriers.

Unfavourable economics?
Parcel lockers are far more expensive to deploy than a parcel shop network. But the ongoing operating costs for lockers are clearly much lower – and ByBox and InPost had already made the investment in any case, so the cost argument doesn’t seem decisive.

Consumer resistance?
There is some evidence that UK consumers have not warmed to parcel lockers and that some people have struggled to use them. But if the German consumer can get the hang of it, why can’t people in Britain?

We aim to explore this in our upcoming research in the sector.