Are Parcel Lockers the Cure to the D2C Duldrums?


Logistics innovations

Not long ago, the valuations of companies like Wayfair, Warby Parker, Stitch Fix, Allbirds, and Peloton soared into the billions. These companies, and many like them, were pioneers of the Direct-to-Consumer (D2C) retail niche.These brands promised low prices to consumers through reduced overhead costs and by eliminating intermediaries.

The business model worked exceptionally well. However, as stated by CNBC Tech Reports, recent results have been drastically different. Popular brands struggle to stay afloat because of rising advertising prices and policy changes.

For D2C businesses to duplicate their previous levels of success, they will need to explore creative options to continue their growth. For example, Smart Parcel Lockers are becoming popular as an innovative solution for many retail, residential, and commercial businesses. Let us look at how D2C retail companies can utilize Smart Parcel Lockers to turn significant challenges into major wins.

Challenge: Facebook AD Prices Soar

Without operating storefronts, these D2C companies have had to find effective methods of advertising that would reach millions of people in their targeted demographic. CNBC Tech also reported that Facebook ads had become a major means to build their brand and visibility.

Two years ago, Facebook priced ads at $6 per one thousand people for specifically targeted demographics. Now, Facebook ads have skyrocketed, tripling to $18 per one thousand people, resulting in a significant financial barrier.

WIN: Smart Parcel Lockers as an Advertising Tool

Besides using Smart Parcel Lockers as a pickup location for your customers, they can act as a functional billboard. Use them in busy areas with heavy foot traffic, such as train stations, airports, and malls. The introduction of Smart Parcel Lockers to a new location alone garners interest as many people have not seen them before in public spaces. Better Marketing affirms that billboards remain an effective way to stimulate consumers to act. Additionally, Smart Parcel Lockers can be outfitted with digital screen displays for additional advertising as well as displaying flash ads on the host monitor.

Photo of a yellow smart locker with a woman carrying shopping bags

Customizable retail smart parcel locker

Challenge: Apple’s New Privacy Policy

According to reporter Phoebe Bain, the rollout of IOS 14 and Apple’s new privacy policy have hindered D2C companies from measuring their Facebook ad performance. Consequently, businesses have to pay more money without the ability to quantify the results of specific campaigns.

WIN: Ads in High Foot Traffic Areas can be Measured

Placing your Smart Parcel Lockers in high foot traffic areas lets you measure how many people are exposed to your advertisement at any time, any day, and any month of the year. Advanced technologies can also present advertisements based on a passerby’s demographics. Such metrics are akin to online marketing but with the added, memorable exposure.

SafeGraph, Data Experts who help organizations understand market trends, believe incorporating foot traffic into your analytics will provide more insight into customer demographics, helping you optimize your marketing efforts regarding the best locations. Smart Parcel Lockers offer an opportunity to capitalize on the effectiveness of billboard advertising in heavily trafficked areas in a cost-effective and highly measurable way.

More Wins:

Increased Revenue – Besides promoting your brand, you can profit by advertising other businesses through the Smart Parcel Locker technology. Each locker can have display screens installed above the lockers usable for advertising your brand and others.

Customer Satisfaction & Decreased Overhead – Smart Parcel Lockers are ideal because they offer consumers more options and accessibilities. In addition, each locker can accept returns from customers, reducing shipping costs and adding convenience for consumers.

Promotional OpportunitiesRetailers can offer more services to attract potential customers. Smart Parcel Lockers can provide promotional experiences by leaving product samples to introduce customers to new products. Retailers can store same-day coupons for hot-ticket items to drive more consumers to online purchases to take advantage of deals and offers.

Community Hub – Smart Parcel Lockers offer the ability for peer-to-peer exchange. Charge customers a small fee and provide the convenience of using lockers to exchange goods among themselves. Using these small, creative, yet effective ideas for increasing revenue, could relieve the strains of certain challenges faced in recent years by offsetting locker operational costs.

Lower Product Return Rates – According to Conversion Rate Optimization Experts, e-commerce stores have a 30% rate of return compared to 8.89% of brick-and-mortar stores. Additional statistics revealed that 92% of consumers surveyed said they are more likely to purchase from a company where the return process is easy. Smart Parcel Lockers provide the ultimate in returns convenience while lowering the retailer’s logistics costs.

Rent Out Unused Locker Slots – Retailers who purchase Smart Parcel Lockers as a company asset will inevitably see instances of reduced slot utlization. By tapping into a broader network, unused slots can rented out to logistics companies seeking to reduce their last-mile costs. 

Image of a conceptual ParcelPort retail smart lockerConceptual retail smart parcel locker

The Future of D2C

In 2021 Wayfair lost $78 million in the third quarter, according to the Boston Globe. Warby Parker lost $91 million in the same quarter.

So many of the D2C companies have suffered similar fates, but there is hope. Creative business solutions could help companies thrive in this new era of business. Smart Parcel Lockers from ParcelPort are customizable in both the hardware and software. This means they can be uniquely designed to address your individual business needs and represent your distinctive brand.

Smart Parcel Lockers:

  • Are easy to manage
  • Increase profit margins
  • Will reduce labor overhead
  • Generate additional revenue
  • Utilize the latest innovative technology

A press release by Fortune Business Insights advises Smart Parcel Locker market is expected to reach $1.63 billion by 2028, with buy online, pickup in-store (BOPIS) becoming an ideal option for many e-Commerce stores. Smart Parcel Lockers remain a creative and smart solution to benefit from the changing landscape of retail.

To learn more about how your organization can maximize smart lockers to reduce cost, increase revenue, and delight your customers, contact the ParcelPort team online by visiting or calling 1-800-818-0870.