Global Parcel Shops and Locker Networks: Market Insight Report 2021, including Parcel Shops and Locker Networks Database
This report includes:
– The main report, which covers parcel shops and locker networks worldwide, giving a detailed view of networks currently in operation, the historical growth of outlet numbers and sets out probable scenarios for future growth.
– An excel spreadsheet containing our full database of 322 networks in 69 countries with 1.8m locations worldwide
– A conference call with our analysts to address your questions arising from the report.
The final mile component of internet retail, from the depot to the consumer, is the most labour-intensive, and therefore expensive, part of the overall cost of delivering a parcel. In our work in the market over several years we have found that, for leading carriers, it represents an average of around 45% of their total costs.
This report focuses on retail pick-up / drop-off points (PUDOs), i.e. parcel shops and parcel locker networks, worldwide.
– These are now proven and fast-growing last mile delivery methods.
– The numbers of locations of each have continued to expand rapidly
– In the first few weeks of 2021 there have been three high-profile fundraising exercises involving leading networks: HiveBox, InPost and Instabox.
The report is based on our database of parcel shop and locker locations which has been compiled and enlarged over the last four years. It now contains information on over 320 separate networks globally with almost 1.8m locations.
– It gives a detailed view of networks currently in operation, the historical growth of location numbers and sets out probable scenarios for future growth.
– It includes profiles of over 50 leading networks including as well as information on locker system providers.
Our forecast scenario for growth in the number of outlets and the revenue that they generate is supported by analysis of the key drivers of growth – in particular online retail spend and its share of total retail spend – setting out historical changes and available forecasts, by country.
This report focuses on the development of parcel shops and lockers to facilitate delivery of items to – or collection from – the consumer.
– Parcel shops are staffed outlets, most commonly convenience stores or other shops with long opening hours, including florists, petrol stations and other outlets.
– Secure locker banks are generally found at indoor or outdoor sites which are both accessible from early until late and offer an adequate level of security, such as railway stations, supermarket car parks, convenience stores, office and apartment block foyers, universities and petrol station forecourts.
These networks are now being rolled-out rapidly in most countries worldwide, to increase consumer convenience and reduce delivery costs. A high proportion of the population is 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 and hence reducing cost.
– Improve the success rate of consumer deliveries and hence satisfaction levels and delivery costs.
– Reduce the environmental impact of, and congestion caused by, delivery by reducing total vehicle miles travelled.
– Provide additional footfall and hence revenue for host locations, supporting their economics in a challenging retail environment.
– Reduce time lost by field engineers travelling to the depot for spare parts.
It is important to note that parcel shops and locker networks are not a distinct market. They are substitutes for other last mile channels such as home delivery and click and collect
– Roll-out of networks has not been driven by demand but by supply – the appetite for carriers and investors to build networks and make capacity available.
– Hence future growth depends primarily on future investment decisions by relevant parties which are related, but not directly, to the growth of online retail.
Also parcel shops and lockers are close substitutes for each other, providing almost identical functions from the point of view of retailers, carriers and consumers.
Market size and growth
We have identified more than 1.77m parcel shop and locker locations worldwide.
– This includes over 1.2m parcel shops and more than 0.5m locker locations.
– China is by far the largest market with over 40% of all the parcel shops worldwide and over 80% of locker banks. It is also a leader in development and deployment of the latest locker and consumer app technology.
Since 2019 the total global number of locations has increased by 44% as existing networks have rolled out further locations and new networks have been set up. Growth has, to a very small extent, been offset by the closure or contraction of some networks which had struggled to get their business model right and been lossmaking.
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.
The COVID-19 pandemic has given significant further impetus to the segment from the increase in B2C parcel volumes, the needs of carriers to scale up their delivery capability to cope with increased in volumes and the perception that lockers in particular offer a more socially distanced form of delivery than to the door
A series of organisations, including established parcel carriers and independents, is rolling out networks within countries and internationally. Our database includes the 323 networks in 69 countries which we have identified. Leading networks include the following:
– Deutsche Post DHL’s Packstation locker network in Germany, which was the first parcel locker network to be deployed at scale successfully. It is also the largest locker network in Europe, with over 9,000 locations.
– HiveBox, the largest locker network in China. It has secured funding to significantly expand its network locations both organically and through acquisition. Its network now extends to nearly 270,000 locker banks and it is now starting to deploy lockers outside China, having supported the Omniva network in Estonia.
– Amazon, which is rapidly expanding its pick up location networks, as well as its parcel locker networks in the US and Europe. Its number of locker banks in the UK has increased by 30% over the last year.
– Others such as Best Inc., UPS Access Point, InPost, FedEx Onsite, Hermes, Instabox, Mondial Relay, Parcel Pending (Quadient), Pickpoint, DPD (La Poste) and GLS (Royal Mail).
Business models differ between operators:
– Most (but not all) carrier-owned networks are exclusively for their own parcels
– Many independent networks are open to a range of carriers. In some cases they act as the first tier supplier, working directly with retailers, while in other cases they act as a subcontractor to their carrier partners.
– Most networks consist of one type or the other but some have successfully combined them (eg Hive Box, Amazon, InPost Poland). This potentially enhances both the service quality and economics of their networks, enabling them to put parcel shops in locations where there is not enough volume to support a locker bank or use them as peak overflow capacity, allowing the locker network to run at higher average utilisation.
We believe 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 which enables a consumer’s preferred, local site to 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 and expenditure.
Demand for online shopping and convenient and cheap delivery options continues to grow. Historically, parcel shop and locker models have grown much faster than online retail and current roll-out and expansion plans mean that this looks likely to continue.
Penetration levels vary dramatically between countries. For example Poland currently has one location for every $0.3m of internet retail spend and other European countries, such as Czech Republic, Denmark and Germany, also have high densities. The equivalent figure for the UK and US is one location for every $5m and $23m of internet retail spend, suggesting that, despite recent expansion, these countries are extremely under-penetrated.
Key challenges in achieving further growth include:
– Acceptance by mainstream consumers rather than natural early-adopters, which may require improved user experience, better consumer apps, improved processes and greater marketing efforts.
– Persuading retailers to change their delivery pricing policies to share the benefits of lower delivery cost to parcel shops and lockers by making the delivery prices they charge to consumers lower for these options vs home delivery.
– Availability of sufficient sites, especially for lockers, which are relatively bulky and may require planning permission.
– Availability of sufficient capacity at the sites to cope with anticipated levels of demand.
What does the database contain?
– Network Name
– 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)
What are the sources and methodology?
The main sources for the report are:
– Extensive desk research on parcel shop and locker networks and locker manufacturers worldwide covering company accounts, websites, press reports and other sources
– Apex Insight’s ongoing work on online retail and the parcel delivery market worldwide
– Interviews with senior-level contacts in the market
The key input to our market size estimates is our database of locations, which is included with this report. We look at number of locations relative to online retail spending and population on a country by country basis to help evaluate the market potential, which guides our market forecasts.
Who is it useful for?
The report is intended for:
– Owners and operators of parcel hop and locker networks
– Locker system manufacturers and suppliers
– Customers of parcel shop and locker networks, in particular, retailers who sell via the internet
– Buyers or potential buyers of locker systems looking to choose the best option for their needs
– Investors in these businesses
– Market regulators and policymakers
– Banks, analysts, consultants and other parties with interests in the sector
Who was it written by?
The report was written by Frank Proud and Paul Chapman
Frank founded Apex Insight in 2012 and set up our Parcels and Delivery practice
His background is strategy consulting, with two firms, Bridgewater and Burlington, which were originally founded by ex-Bain teams. He has advised many clients across the logistics industry, from start-ups to global leaders.
Subsequently, he was a senior member of the Transaction Support team at EY, advising private equity firms and corporate acquirers on commercial due diligence and other acquisition-related issues.
He leads Apex Insight’s consulting work for investors and clients in the logistics industry.
He has an MA in Economics from Cambridge University.
Paul has extensive experience across a wide range of parcels, delivery and logistics markets
As well as having a leading role in Apex Insight’s research, he has worked on consulting assignments for clients and investors in the sector.
His previous experience includes being Logistics Research Manager at Datamonitor, co-founder of Analytiqa and a marketing / strategy role at Christian Salvesen.
He has a BA in Modern Languages with Business Studies from Swansea University