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August 2016

Amazon Locker Enters Apartment Market

 

By Paul R. Bergeron IIIAugust 2016

Phoenix-based Mark-Taylor chosen to test program for the world's largest online retailer

Amazon Locker boldly entered the conventional apartment resident package delivery market in July by debuting its program at 37 Mark-Taylor Residential communities in the Phoenix market.

"At this point, it's no secret in our industry that the growth of online shopping has put new and growing demands on apartment operators when it comes to getting those packages to our residents securely and efficiently," says Chris Brozina, Executive Vice President of Mark-Taylor. As an example, one of the communities received as many as 15,000 resident packages in 2015 alone.

Mark-Taylor was chosen as Amazon's debut partner based in part on its large presence in Phoenix, which is home to one of Amazon's primary fulfillment centers west of the Phoenix metro area, which distributes more than 15 million packages per day. "We're honored that Amazon has chosen us as their first large-scale partner in this technology, but it's even more meaningful to know that this system won't put more costs back on our residents; it's about making their lives more convenient, period," he says."Our class-A resident demographic is ideal because we have a lot of young residents who have a good deal of disposable income and who are active Amazon shoppers." 

According to Brozina, discussions with Amazon began in late 2015, and the company has been a reliable management partner with his communities in terms of execution from the outset.

"We are honored to partner with a best-in-class online retailer such as Amazon, especially on a technology that has such tremendous benefits for our respective customers," he says. "They have invested heavily into this delivery system are clearly conscientious about preserving the strong reputation of their brand, as are we. Amazon tells us that they want to learn as much as they can about serving apartment residents so that their delivery system can become even better than it is now."

Amazon declined units Magazine's request for comment.

Amazon Gives Mark-Taylor a URL

Mark-Taylor has nearly 14,000 Class A apartment homes (25,000 residents) and operates exclusively in Arizona and Nevada. Prior to the pilot program, the Scottsdale, Ariz.-based company handled resident package delivery much the same way most operators do, in "reactionary" fashion. "The growth in volume was becoming a problem logistically, and it's pretty natural to see the problem will continue to mount without proactively addressing it," Brozina says.

Today, Mark-Taylor is encouraging online ordering from its residents and is promoting the Amazon program, which has been designed specifically for its residents. Amazon created an exclusive landing page and special "check out" URL that only Mark-Taylor residents use when shopping.

"The delivery/pick-up system is automated," Brozina says. "It requires no integration into property management software or oversight by the onsite teams."

When Amazon delivers a package, its sends a unique barcode to the resident. The resident can scan this barcode over the locker screen at a community, opening it so that the resident can pick up their packages. No PIN is required and the resident doesn't have to enter any information into the lockers, which are available 24-7 and 365 days a year. Most important, Mark-Taylor residents are not charged to use the service, and residents can receive and return their packages without ever having to visit the post office."

The concept of Amazon Locker originated in 2011 and the program continues to expand. It serves several dozen metro areas with hundreds of locker locations that consumers can access.

But I Didn't Order on Amazon

Volume is impacted by so many things-property, season, demographic, etc., according to Brozina-"but we've done quite a bit of research and it's safe to say that in general, it appears that Amazon represents more than 50 percent of our total property deliveries-and growing."

Mark-Taylor residents who receive packages that are not ordered through Amazon (such as from eBay or Zappos) are able to pick them up at the leasing office during office hours.

The leasing staff attaches a sticky note to these packages, suggesting that they instead shop through Amazon, when possible. And, if residents order through Amazon and do not use the unique URL, Mark-Taylor alerts the resident of the Amazon Locker option.

Amazon and Mark-Taylor chose to slowly publicize the program, in part, because they "wanted to make sure the install process and any small kinks were firmly ironed out before making a splash," Brozina says. Even without promotion, the new lockers have generated buzz among existing residents and the company anticipates increased prospective resident traffic with the new amenity. 

Where Next?

Amazon has not announced any details about future expansion of the program, but Brozina is confident that Mark-Taylor's successful partnership is just the beginning of a new way to deal with the perpetual problem of package delivery at apartment communities.

Amazon does not publicly disclose the locations of its fulfillment or sortation facilities; however, those wishing to research potential key Amazon markets can visit the blog at taxjar.com and search Amazon sort center locations for an unofficial list. —P.B.

Amazon Locker For Student Housing: Mixed Grades

The performance of Amazon Locker in privatized student-housing communities is mixed, according to management staff at several communities where it was installed in the past couple of years.

Grand Marc at University Village in Riverside, Calif., is a 756-bed property managed by Asset Campus Housing. Its leasing manager, Jessica Mosqueda, says the community's relationship with Amazon Locker goes back to at least March 2014.

"It's a cool selling tool when we show it during leasing tours," Mosqueda says. "And I notice some of the same students using it over and over again."

Mosqueda says her community of approximately 840 residents receives between 50 and 100 packages per day. It is used by a limited number of residents, based on the lockers' storage size (approximately 50 slots). Amazon Locker covers all expenses.

"Those who don't choose to use Amazon Locker pick up their packages in our leasing office," she says. "The way we understand it, if we aren't getting enough package delivery volume, Amazon will discontinue the program. But that hasn't been a problem since [March 2014]."

At University of California, Irvine, American Campus Community's Regional Vice President Dennis McCauliff says Amazon Locker was not effective for his on-campus privatized housing because not enough packages were delivered for it to make sense, and retrieval delays by student residents jammed the system during busy periods.

"The first three weeks of any semester were especially difficult," McCauliff says. "We might receive about 250 packages per day during that time, but for whatever reason, the students only came to pick up about half of those within the next 24 hours. Then, when another 250 packages came in that next day, there was not sufficient room to store the newer packages. We ended up having to find other non-locker storage areas to keep them. It was a mess."

Shipments of textbooks to students caused the abnormally high volume during that period. "You would think that they'd come right down to pick up their books," McCauliff says.

Aside from those first three weeks, the community did not receive enough packages for the "numbers to work," especially when considering the number of non-Amazon packages that were delivered.

Adam Byrley, Executive Vice President, The Preiss Company, says he had to share his Amazon Lockers with two other nearby student-housing communities in the Austin, Texas-based submarket of Riverside, Texas. "Packages that weren't even for our residents were coming to our location," he says.

Bryley says for the 2016-17 school year, he is considering offering a $2 charge to residents who want their packages delivered directly to their apartments. The deliveries would be handled by office staff, such as part-time leasing agents. —P.B.

Learn More

NAA 2017 Student Housing Conference & Exposition

Feb. 14-15, 2017, Hyatt Regency, Chicago

Registration opens in September! 

Paul R. Bergeron III is Director of Publications for NAA and can be reached at pbergeron@naahq.org or 703-797-0606.