In 2011, Amazon introduced TV & movie streaming as part of its Prime subscription service. Perhaps unsurprisingly, this boosted Prime subscriptions, boosting Amazon sales, and creating a boom in package deliveries. Today, nearly 47% of package deliveries come from Amazon! In multi-family and mixed-use buildings, this created a huge problem.
Melody Akhtari, Director of Marketing & Communications at Luxer One, says that what started as a front desk courtesy in these properties is now a major headache. Luxer One has the solution.
How package lockers increase both efficiency and a buildings bottom line.
Ensuring accessibility to package locker services through compliance and customization.
Read the interview transcript below, or listen to the original 25-minute podcast here.
Blake: Welcome to the future living podcast. I'm your host Blake Miller. Melody Akhtari is the Director of Marketing and Communications for Luxer One - A producer of smart package lockers for multifamily and mixed-use properties. The need for these types of devices is relatively new, however founded in 2005 Luxer One is not a new company. They've been around for the entire growth of the e-commerce boom. I started my conversation with Melody by asking where the idea for Luxer One came about and how they got the company where they are today.
Melody: Luxer One was started back in 2013, and before that we had been placing smart lockers into apartment buildings starting in 2005 with a company called Laundry Locker. It was a pretty basic concept - we would put these smart lockers in apartment buildings to service dry cleaning and laundry for the residents living there.
After a few years, the property managers realized they were starting to get a lot of packages for these same residents, and it was becoming a burden. So they came to us and said, "You know how you're already automating dry cleaning and laundry pickup for residents? Could you do something like that for packages?" And that's where the idea for Luxer One was born.
We actually had our customers telling us that they had a problem we were uniquely poised to solve. Luxer One was born in San Francisco and now it's really taken over the US and Canada. We've got over 3500 locations and now we're really focused on solving that package problem and preparing for the future of package growth.
Blake: That's incredible. Talk on that for a second - what type of package growth have you guys seen since before smartphones and e-commerce really started exploding? What has that growth been like? What is an average apartment building, or one of your locations see in terms of package volume daily or weekly?
Melody: It's been a complete shift. What started out as a courtesy of accepting a package delivery here or there at the front desk at an apartment building has turned into a massive problem. We've reached a tipping point that stems from two different factors. First off, market factors. Amazon came in and really changed that paradigm when it comes to online shopping. And as a result of that, other retailers have had to complete compete.
Now you've got all sorts of retailers offering two-day shipping for free and really competitive prices online compared to in-store. The market factors have resulted in a really hot opportunity to sell items online and ship them to consumers. Combine that with consumer behavior where you've got millennials and even boomers in the habit of buying things online now because it's so easy.
That's really what has contributed to this tipping point of packages blowing up, especially in multifamily apartment buildings. Take a look at packaged volume these days: 47% of packages come from Amazon.
Blake: Incredible. That's that's a staggering number. Let's take a step back here - for those that might not be familiar with package lockers or the Luxer One experience, how do you differ from others in how you handle all the different sizes of boxes that are being shipped now. It's definitely not just small boxes anymore. We're shipping furniture. We're shipping all types of stuff.
Melody: A lot of people are ordering their everyday essentials online.
Blake: I'm guilty. I'm living as a service on Amazon so I'm contributing.
Melody: We don't go to stores and we just buy our toothpaste or paper towels online in addition to these specialty items. That's really what's contributed to the growth in volume. A typical two hundred unit building could receive between 50 and 75 packages a day. All of those are different sizes and a different product mix but the way a delivery works is simple regardless of what the contents are.
Any carrier - whether that's FedEx, USPS, or Amazon - will come to the property and go to the lockers with their deliveries and they have a special access code to make deliveries. They'll type that into the touch screen at the lockers and then they can start making their deliveries. They'll select the resident name or the unit number for that delivery and then they select the size of locker for that particular box.
So it's dynamically selected and it's a smart use of space by not having to reserve a locker for each resident. You can have a dynamic, smart use of space where a small delivery will go into a small locker and maybe that same resident might have an extra large delivery tomorrow that goes into a different locker so they select the size of locker for that delivery and then it pops open automatically. The carrier can just place the package inside and at that moment the resident will get a text message or an email even while they're sitting at work or they're at brunch with a friend. It says you have a package that's been delivered, here's your access code. Pick it up whenever you want.
From there, whenever they come home, whether it's midnight or 6:00 PM, they can go up to the lockers at the apartment building, type in their access code or just scan it in and then that particular locker containing their delivery is going to automatically pop open. It's a really exciting moment when it pops open and what you've been waiting for has been safely and securely sitting there the whole time.
Blake: It is fun.
Melody: There is a special joy in that locker popping open.
Blake: And it's unique. The user experience you kind of feel like you're unboxing before you're unboxing and it's kind of cool. The only criticism I can give you guys is: don't send me two notifications that I've got a delivery because I've got the app and the text. But we're trying to solve those types of problems like simplifying notifications.
Melody: Totally. You know what's interesting about that is with our perishable deliveries we've actually done that on purpose.
Blake: Interesting. OK.
Melody: This way residents know that there is a perishable delivery that has a higher urgency so you can pick it up because a lot of them are insulated and they have a ticking time clock of when you can pick them up. On the flip side of that we've also come up with an actual refrigerator that is integrated with our lock.
Blake: I immediately retract my criticism because I love it when companies have a very thoughtful reason as to why they do something instead of just saying that's a hard problem to solve.
Melody: We are definitely thoughtful about the nuances in the product. That's essentially what makes us different to answer your earlier question. The goal that we have as a business is to solve for 100% of the packages that come through an apartment building.
Blake: I love that.
Melody: Package growth is growing year over year by about 20%. So this year you're going to have a number of packages and next year it's only going to be more followed by the next year and so on. So we have the ability to integrate with our own package room technology. So the same technology that unlocks a locker can also unlock an additional package room sitting next to the lockers for overflow purposes. We've designed this product with overflow in mind because we know that's the number one issue that's going to be plaguing properties from now on. This volume is not going anywhere.
Blake: Let's talk a little bit about the planning of this. Say I'm building a new building or even I'm going in and retrofitting a building and looking for ways to deliver high impact, high value amenities to my residents while also saving my property manager's time and my own efforts of managing all of these things. What am I thinking about when I'm putting in these locker systems? It sounds like you guys obviously have a lot of smart technology that needs to be there. What does all of that look like and what should we be considering?
Melody: The requirements are pretty simple: power and ethernet. Ultimately it comes down to smart space planning. Logically, you're going to have carriers coming to your property to make deliveries to the residents. So first and foremost we want to make sure you have package lockers located somewhere logical for them. It makes sense to put them next to the mailboxes for example.
Blake: Do you do any consulting on that up front and talk about making it even easier for people to pick up and drop off packages or even take into consideration Amazon and other delivery drivers?
Melody: That's probably one of the biggest challenges plaguing the industry right now. Amazon is not only shifting the paradigm when it comes to online shopping but also last mile delivery. You don't necessarily have these career delivery drivers like you would with USPS and FedEx who are coming every single day. We're solving for that by making the delivery process really easy and making sure we have 24/7 support.
That's just a phone call away to help with the carriers as well as the residents and the property managers. We call it the three-legged stool to make sure this entire user experience is designed for each group of people involved: the carriers, the property managers, and the residents. If that experience is not perfect for any one of those, that stool is going to fall over.
Blake: You mentioned carriers a couple of times, and carriers aren't just Amazon, U.P.S. and FedEx. Who are you thinking about all these different types of carriers and what is the evolution of delivery types that you guys are now having to solve for? You mentioned perishable items, what's going on there especially in these high in luxury apartments and across the board?
Melody: The carriers for the most part are package carriers and personal carriers. They're coming in with a cardboard box full of something, but you are getting a lot more mail delivery folks. That even includes dry cleaning delivery. Our Luxer lockers, true to its origins, will still accept dry cleaning. We've got hooks inside them to accept dry cleaning and clothing.
There are a lot of different folks coming into the property and making deliveries for the residents living there. It needs to accommodate all of them. Ultimately the system is designed for the asynchronous handoff of goods regardless of what that good is. Item goes in, notification goes out, and someone comes and picks up their package. That's really what we've designed for at its core. We make edits for it along the way, like adding the refrigeration and adding in the hooks depending on the product.
Blake: I'm wondering what some of the on-boarding has been like both for the property managers to get it going but really with the carriers. Do you have training that you're working on with the carriers at a higher level and they're training on down or is it market by market?
Melody: It's market by market. Funny enough, it's very much based on the carriers buy ii. Sometimes we're working with the USPS postmaster in that city to get wide buy in and training for their carriers and sometimes we're working with an individual carrier to get them to understand the system. We have a whole carrier support training team because that's really such an important part of that three-legged stool, making sure the carriers are just as bought in as the residents who get this perk. Once we have this conversation with the carrier and show them how the system works it really clicks, we just need the opportunity to click it with them for those 10% who don't quite understand it.
When I say it clicks, it changes the way they do their job. It allows them to have a central place to make their deliveries which is what they've always wanted, but it allows them to do it a lot faster. So instead of having to go up and down the stairs and go to different units on the property, they have nice one single point to make all of their deliveries.
Blake: One of the things I really wanted to touch on is some of the stuff that you guys are leading the way on, including accessibility - and thinking about how these new types of package handoffs are affecting people we need to be thinking about. What are you guys doing there?
Melody: When it comes to accessibility, we want to make sure that we're actually designing a system that works for everyone living in that building. Every developer is thinking of that as well. How can we make sure this property is accessible universally? Unfortunately there are no there are no guidelines by the government saying package lockers have to be designed this way. There are kiosk requirements in the ADA, so we're we're working off of the ADA standards for design.
On the hardware side, what that means is making sure all of the usable components are accessible within 15 to 48 inches so that if you're on a wheelchair you have access in this range of motion. What we've done is we've made sure all usable components, a compartment of every size plus the touchscreen, are easily accessible in that area.
The way you have to go above and beyond to service everyone that lives on a property is to offer them the customization of how they can experience the system. On the software side we actually have user settings where a user can go in and mark that they only want their packages delivered to certain accessible lockers and they can even direct the carrier to not deliver to the lockers.
What that allows us to do is pop up a notification for the carrier that says for this particular resident please deliver to the unit or please deliver it to the leasing office if that resident can't carry a package or transport it themselves. So the software customization is really what matters because that's what takes it above and beyond and customizes it for the package locker experience rather than just any mainstream kiosk.
Blake: Having the ability to custom direct when packages get delivered or anything like that is moving into some of these more more concierge type features. Is that where the property owner or even Luxer One can monetize other things? It sounds really convenient and a great amenity as a resident to have the ability to know when my packages arrive through an app.
Melody: There are certainly monetization opportunities with a package locker system and the way we see it is, again, that three-legged stool. Your experience needs to be seamless for everyone involved so we don't impose fees or anything like that but we do have opportunities to monetize the system and drive a little bit of revenue.
The easiest and most pleasant way to do that is to offer your residents a way to experience it for free, and then let's say a package has been held for over three days - that's when it might start incurring a fee. So the resident experience isn't really imposed upon but the property still gets to have some ancillary income coming in through some entity. A more pleasant experience is to offer outbound shipping.
Blake: Oh interesting. Cool. Super helpful.
Melody: You're seeing a lot of different delivery experiences happening. People are renting clothing. People are buying four items and returning three of them and only keeping one of them. So that package locker is not only a delivery mechanism but it actually ships stuff out.
Blake: We touched on this a little bit ago but I wanted to come back to the refrigerated locker combos. You've got things like Amazon Fresh and all of the different Blue Apron types of delivery services - how do you guys handle that? What does it look like and then where does it go from there? What else is going to be delivered that you guys are going be holding for folks?
Melody: What we did was we thought, OK - how do we turn our lockers into refrigerators? What that meant was building a refrigerator, which is a pretty hard thing to do. So we said forget it we're not refrigerator experts let's just go to the refrigerator experts. So we partnered up with True Refrigeration. They're an incredible American company that makes commercial fridges. If you've ever seen the behind the scenes in a restaurant, they're probably using True for refrigerators in the back.
We worked with them to take one of their commercial fridges and outfit it with our locks that can be controlled by our central locks and touch screen. Now we actually have True Refrigerators as part of the Luxer One system that accepts perishable deliveries. The beauty of that is that they're not limited in size like a locker would be; t's a full-sized refrigerator. So if you have a flower arrangement that's really vertically tall it can go in there, and if you have smaller medicine packages or food delivery they can go in there. With a lot of these packages they end up being like we said a lot larger than they need to be because of the insulation and extra packaging they have to put in there. You do need that flexibility of space particularly for these perishable deliveries.
Blake: We're running short on time but we always end every episode with a quick lightning round and my favorite question to start is with what business or service is going to be obsolete in the next 10 years? In other words who is the next Blockbuster business or service?
Melody: I probably say it's different types of social media like Facebook or Snapchat. Consumers are becoming really savvy about how their information is being used and how they're spending their time. I just think that, with young people especially, some of these platforms are becoming antiquated and more thoughtful use of time and relationships has become prioritized.
Blake: That's awesome to hear, I've started to see a lot of that. What device have you gotten in the last couple of years and how has it changed your routine?
Melody: Hands down, my Google Home. I say my Google home as if I have one - I have four. They are all throughout the house. We started using it as a way to play music and turn on the lights, but it's really blown me away how incredible the quality of intelligence is and I recently was in a friend's house that had the Alexa version and I was pretty blown away at how much more intelligent the Google Home is. How it can decipher what you're saying and all of the different integrations that it does. So now I have it set up where if my garage is open my hall light turns green, and I remember to close the garage. There are so many different ways to customize it. It has really shifted the way my home operates.
Blake: We've been talking a lot about how technology is changing everything. What do you think that technology's not going to change in the future?
Melody: At the end of the day human desires are human desires. I think that technology is not going to be able to come in and change what drives us as people. We can certainly come up with technologies that address desires like hunger and companionship and a sense of belonging, but those at their core are what make us human. I don't think technology can really change that.
Blake: Love that answer. I love when we get hope for humanity. For multi-family investors, folks that are building these new apartment buildings, what are some things that they can be doing to future proof their properties for delivery as it stands today and how it's going to continue to grow.
Melody: Design for tomorrow, not for today. I'm still shocked at how many old iPod dock alarm-clocks I see in hotel rooms. That was a design for today back when they had the 30-pin connectors and it wasn't a design for tomorrow. Thinking through what this building will look like in 5, 10, 15 years and what will remain consistent, like human desires. What will not remain consistent is the hardware and other minor things that we need to plan for.
Blake: For the same audience that are considering what package management systems they should be putting in - what's something that they should be thinking about that isn't obvious? Such as you've got to have the right space and all this stuff.
Melody: Like I said it comes back to the three-legged stool. The one thing that they need to always be considering - you know property managers are definitely thinking about their residents but thinking about themselves as well. What kind of ROI can they get from their property management solutions. Also that carrier experience - they're not alone in solving this problem. There are other elements involved. Think holistically about everyone involved in the equation.
Blake: That's awesome. Well Melody, I had such a great time having this conversation today with you. Learned a ton. Tell everybody how they can find you on the Internet.
Blake: Excellent. We'll make sure that's in the show notes as well. Thanks again Melody.
Melody: Thanks for having me.
Blake: My thanks again to Melody from Luxer One for joining me on this episode of The Future of Living. Learn more about Luxer One on their website LuxerOne.com, on Twitter @LuxerOne and on Facebook @LuxerOneapp and connect with them on LinkedIn.
Luxer One provides smart locker solutions for multifamily, retail, office, mail center, and university. Want to learn how we can help you manage your package problems? Reach out to a member of our team here.