What Is a Parcel Locker and How Can It Help Your Business?

Parcel lockers are bulkstorage units with multiple lockable compartments, designed to facilitate delivery and collection of orders at any time of the day or night. This 24/7 accessibility makes parcel lockers a powerful tool in an era of increasing e-commerce.

A customer can order an item online, for instance, and travel to a nearby parcel locker to retrieve their order. Shippers can deposit packages safely and securely, even when no one’s available to sign for the shipment. At construction sites and industrial facilities, this capability allows for after-hours deliveries, preventing costly delays.

There are as many designs and capabilities of parcel lockers as there are uses for these shipping solutions. Some industries may use different terms, but any highly accessible, secure storage unit for packages can be considered a parcel locker. Other common terms for parcel lockers include:

  • Cluster box. This is a United States Postal Service term; USPS defines a “cluster box” as a “centralized unit of individually locked compartments for the delivery and collection of mail.”
  • Will Call Dropbox. This is an industry term for a certain type of parcel locker, typically fitted with electronic locks that generate unique keycodes for each order pickup. These parcel lockers are usually designed for industrial use, with heavier construction than some B2C models.
  • Buy Online, Pick Up In Locker (BOPIL) locker. This is a play on “BOPIS,” the “buy online, pick up in-store” model of retail. Some retailers apply the name “BOPIL” to the storage unit itself. Yes, “BOPIL locker” is redundant, but so is “PIN number,” still in wide usage.
  • Retail locker or retail pickup locker. It is possible to offer “click and collect” purchasing without the use of a parcel locker, but retrieving an order at the counter still requires standing in lines. A parcel locker with electronic locks removes the line completely. Retailers often refer to parcel lockers as “retail lockers.”

At its simplest, a parcel locker features traditional keyed compartments. This is a common arrangement in the property management industry, for instance, where property managers can simply hand each resident the key to their mailbox.

But in the industrial distribution space, Industrial Internet of Things (IIoT) capabilities offer even greater convenience. Electronic parcel lockers can form part of an IIoT solution for delivering or picking up orders without costly delays.

Electronic Parcel Lockers and How They Work

An electronic parcel locker adds digital functionality to the traditional collection of locked boxes. This technology typically comes in the form of smart locks, digital keypads that users access through an app or portal for complete control.

There are five steps to filling an online order using an electronic parcel locker:

  1. The customer makes an order through the supplier’s estore and selects “pick up at locker” as the delivery option.
  2. Employees at the facility recieve the order through their estore portal.
  3. Staff places the order in a free locker and generate a one-time passcode for the electronic lock.
  4. The electronic lock sends this passcode to the customer, informing them that their order is ready and available at the location, in this particular locker, with this particular code.
  5. The customer picks up their order; the one-time passcode expires on access.

This set-up provides an Industry 4.0 approach to the challenge of delivery on project-saving orders. In the example above, the benefits accrue to both the customer and the seller, whether they’re in the B2C retail space or B2B materials distribution. But it’s easy to see how the arrangement could work similarly the other way around, too — that is, the customer can set up an electronic parcel locker and the distributor can use it for anytime deliveries using a similar system.

Buy Online, Pickup In-Store (BOPIS) Services for Retailers and Materials Distributors

The online shopping revolution has hit traditional, brick-and-mortar retailers hard. Some of the biggest legacy names in the industry — from Sears to Toys R Us — have been closing their doors and refocusing on new ways to interact with their customers.

One promising development for brick-and-mortar retailers is the advent of Buy Online, Pickup In-Store sales, or BOPIS. The process is simple: The customer finds an item on a retailer’s website; they buy the item online and select “BOPIS” as their preferred delivery method. Then they drive to the location and retrieve their item from a designated compartment in an electric parcel locker posted outside the store.

The advantages of BOPIS are backed up by research:

  • According to research published in TWICE: This Week in Consumer Electronics, as much as 79 percent of shoppers end up buying additional items when they go to pick up a BOPIS order. This could be the shot in the arm traditional retail needs.
  • Unlike door-to-door shipping, retailers don’t have to charge a fee for BOPIS. Customers can select the option and collect their order when it’s convenient for them, without paying hefty shipping fees.
  • The avoidance of shipping costs is not a small consideration. More than 55 percent of the buyers who choose BOPIS say they do so in order to avoid shipping fees.
  • Package theft — so-called “porch piracy” — is a growing concern among online shoppers. One survey of e-commerce customers found that 22 percent of respondents listed package theft as their greatest concern when ordering items online. BOPIS, supported by smart parcel lockers, ensures security for virtually all online orders that choose the pickup method.

Most of the research on BOPIS and consumer preferences has been done in the B2C retail space. But there’s no reason to assume B2B suppliers can’t grow their market share using a similar technique. Distributors of construction materials and electrical supply goods can offer their customers the convenience of a BOPIS arrangement — they’ll just have to do so with larger, heavier duty parcel lockers than their B2C counterparts.

Will Call Dropboxes from BHS, Inc. are parcel lockers built for industrial materials. They feature all-steel construction, a weatherproof powder coating, and a variety of locker sizes to match common industrial materials, including conduit.

Delivery Lockers for Outdoor Use

Can you use parcel lockers outside? The answer to this question depends on the parcel locker, but the shortest answer is a simple “yes.” Industrial parcel lockers from BHS are designed specifically for outdoor use. Their waterproof coating, flush doors, and sloped roofs protect sensitive orders in all types of weather.

Some parcel lockers are designed only for indoor use. Maybe they lack a waterproof coating, or, if fitted with electronic locks, the electronics are not weather-proofed. While such a parcel locker might be fine for a property management application, for BOPIS use, parcel lockers and their electronics should be reliably weather-proof.

Using Parcel Lockers in Specific Industries

Clearly, parcel lockers are increasingly important for brick-and-mortar retailers as well as e-commerce sellers. Here are just a few other industries that will benefit from parcel lockers, along with specific applications for each:

  • Property management. According to package management company Parcel Pending, property managers at multi-family units spend about an hour of their time processing and delivering every 15 packages their residents recieve.
    Over the week, that can add up to labor savings of up to $1,200 per week, the company says. The addition of electronic parcel lockers with an IIoT system that handles the notifications and reporting can return all that valuable time to property management employees.
  • Vehicle rental. Parcel lockers make very effective dropboxes. Car rental companies or hoteliers can place even a single-locker dropbox outdoors at their locations to collect keys and other valuables at any hour. BHS manufactures a single-unit parcel locker specifically for this purpose, in face: The High Value Dropbox.
  • Resell/thrift stores. High Value Dropboxes are also ideal for collecting jewelry, clothes, and other resellable items 24/7. Resellers use them to ensure safe, secure delivery at the donator’s convenience, regardless of the facility’s opening hours.
  • Electrical material distribution. Electrical wholesalers are competing against low-cost, large-scale companies like Amazon in the e-commerce space. The giants of B2C e-commerce are increasingly offering B2B services, including electrical distribution, threatening the wholesaling industry with disintermediation.
    One of the ways to remain competitive is to offer electrical contractors online shopping experiences that are as quick and convenient as their B2C predecessors. Parcel lockers designed for electrical components give distributors the power to provide BOPIS options to their customers; alternately, they can deliver parcel lockers to client job sites and deliver materials after hours.
  • Construction contracting. Studies of global construction challenges corraborate what every builder has experienced; late delivery of materials is a leading cause of project delays. One study, cited by Rahman et. al, found that “late delivery and slow mobilization of materials” was the most common among 25 causes of delay on construction projects in the United Kingdom (Rahman’s quote).
    Industrial parcel lockers can help prevent these delays. Distributors can place their own lockers at the job site and fill just-in-time deliveries as they become available. Smart locks integrated with cloud-based e-commerce platforms can further streamline the fulfillment process.  
  • Warehousing. Any application that relies heavily on shipping and receiving can benefit from electronic parcel lockers — and that includes warehouses and distribution centers themselves. Outdoor parcel lockers with IIoT tracking and messaging functionality can play an important role in keeping the flow of materials moving — even when no one’s there to accept a delivery or hand off an order

This list is far from comprehensive. Manufacturers can use electronic parcel lockers to control access to tools, and even log the users who check them out. Equipment rental providers can accept after-hours returns with a parcel locker.
In short, wherever there’s a need for materials to flow, parcel lockers can help.

Equipment-as-a-Service Industrial Lockers

The IIoT functionality of an electronic parcel locker suggests a new business model, particularly for retailers and industrial material distributors: Equipment-as-a-Service (EAAS).

In this arrangement, customers don’t purchase their own parcel lockers. Instead, they rent them from the distributor, paying not only for the actual use of the equipment but for the software systems that maintain comprehensive records of orders and shipments themselves.

Applying the EAAS model to electronic parcel lockers provides a number of benefits to users:

  • The user avoids any maintenance or upkeep costs on the equipment.
  • The provider’s cloud-based software systems offer an online portal, which users can access any time, from anywhere. This portal can provide real-time data on orders, deliveries, and retrieval from each of the lockers in the unit.
  • An EAAS parcel locker makes a powerful value-added benefit for construction and industrial distributors. By providing their own smart lockers, distributors can provide deliveries 24/7, track them through their cloud-based systems, and provide real-time information to customers. This is a service that the forces of disintermediation cannot match.

Equipment-as-a-service is an emerging model within the IIoT space. By offering this service before competitors, today’s material distributors can gain a strong competitive edge, even in an era of increasing disruption. In fact, an electrical distributor offering branded EAAS parcel lockers is well-positioned to do their own disrupting rather than reacting to the actions of the e-commerce giants like Amazon.

Choosing a Parcel Locker for Industrial Applications

At this point, it’s clear that parcel lockers are an important part of the digital shopping experience. However, B2B industrial distributors have different needs than most B2C e-commerce retailers. In order to choose a parcel locker for an industrial application, distributors should consider the following questions:

  • What materials will the parcel locker hold? The biggest difference between a B2C locker and an industrial dropbox may be the size. Electrical distributors need lockers that can contain bundles of conduit, for instance. Capacity is another important consideration. Industrial materials typically weigh far more than a B2C shipment.
    The Will Call Dropbox from BHS is available in custom configurations to hold most common materials. Steel, weather-proof construction offers a standard capacity of 3,000 pounds. Higher weight limits are available on request.
  • What’s the easiest way to give customers access to their one-time use locker? Electronic locks on industrial parcel lockers offer a variety of access methods. They can generate single-use passcodes, and distributors can share those with customers through a secure mobile app.
    Locks can also be configured to provide access via key fob or RFID card. This option is ideal for in-house use (as in the distribution of tools) or for EAAS models. Regardless of the access method, smart locks create audit trails with timestamped logs of entry.
  • Where can customers most efficiently access the parcel locker? BOPIS (or BOPIL, if you prefer) is a value-added service, and the value that it adds is largely one of efficiency. For most distributors, that means placing industrial pick-up lockers one of two places: Outdoors at their own facility, with plenty of room for loading and unloading trucks; or at a customer’s jobsite itself.

Distributors in the industrial B2B space should choose parcel lockers built by manufacturers who understand the requirements of industry. The Will Call Dropbox from BHS, Inc. incorporates the IIoT features that make parcel lockers so successful for e-commerce retailers and adds heavy-duty, all-steel construction to guaruntee a long service life, even with abrading or caustic materials.

To learn more about how a parcel locker can add value to industrial users, call the BHS sales team at 1.800.BHS.9500.


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