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June 2016

Addressing the Problem of Package Delivery

Addressing the Problem

 

By Paul R. Bergeron IIIJune 2016

A place for everything and everything in its place.

If resident package delivery, storage and retrieval could be so easy.

Apartment owners “delivering” new communities or retrofitting existing ones are paying a lot more attention to resident package delivery, having recovered from the largest days of online shopping in history during last winter’s holidays season and seeing a steady up-tick in package delivery since.

Installing lockers, expanding office storage areas, converting existing spaces to include shelves or relying more on resident software alert systems are affecting staff time, office hours and resident satisfaction in myriad ways.

Whether it’s built into new construction or within existing communities, apartment owners and managers are being cost-conscious about investing in solutions, while keeping an eye on future e-commerce growth and innovative design strategies. One suggests that future new development could include having an individual storage area near the door of each apartment home, or perhaps a centralized package area for each floor.

While the list of solutions available by industry service partners continues to grow, so, too, does the list of factors that apartment firms must consider when choosing its approach. They also must consider that package returns is another key step in e-commerce, and seek ways to accommodate their residents’ efforts this way.

“Each community is different and requires a unique plan. The key is knowing the needs of your residents and the physical characteristics of the asset,” Lecia Anderson, Vice President of Operations, JVM Realty Corporation, says. “There are too many factors: volume, property size, property type, unique dynamics, Americans With Disabilities Act (ADA) guidelines, location—and even climate.”

Anderson says that JVM tracked package volume and logistics and conducted a thorough time-and-motion study over the past year at all of its properties so that it could come up with the best system for each situation.

Apartment communities must also factor in such systems’ compatibility with their existing property management software and potentially reconsider their Monday through Friday and weekend office hours to accommodate the expected future growth for consumer online commerce.

The JVM portfolio has 15 properties located from Oklahoma to Ohio, mostly in the Midwest, including markets such as Chicago and Kansas City. It plans to soon add two more.

Anderson and JVM Chief Operating Officer Greg O’Berry say its markets limit their options. Unlike properties in the Sunbelt, JVM cannot install some mechanical devices or software-based systems in non-conditioned (i.e. outdoor) spaces, such as its communities in cold-winter climates.

O’Berry says that finding package locker systems that can integrate with his property management software is not always easy. He says apartment owners and managers must make that part of their due diligence.

“They need to integrate, otherwise you might spend any time you have saved maintaining and updating two separate resident databases,” O’Berry says. “The industry’s major multifamily property management software providers have different processes for allowing third-party vendors to integrate. Some resident package solution companies have varying commitment levels from these software providers and success in getting these integrations done.”

Responded one locker storage company representative, “Our system integrates with all property management software. We don’t want to be in the business of ‘having our fingers’ in anyone’s software. What we ask is that the community provides us with daily updates of move-ins and move-outs. They need to, because we then need to welcome them into this system and learn their delivery preferences, such as being contacted by email, text or a phone call.”

One owner who commented on the challenge of a locker system was concerned that after the lockers are installed, the provider moves on to the next potential customer.

Package locker companies speak honestly about their place in this booming business, sincerely countering some owners’ concerns about investing in storage lockers.

“We handle all the maintenance needed of the lockers,” says one package lockage representative. “We are designed to be a service company, not a company that only sells lockers.”

That company also said that lockers are not a one-size-fits-all solution for the apartment industry.

“We knew going into this that our product will be a good fit for 70 to 80 percent of apartment communities nationwide,” the supplier representative says. “Some apartment communities, based on volume or resident demographic, for example, simply do not need our product.”

“Following ADA standards is important, particularly when it comes to the height of the locker, the turning radius available and the providing of a touchscreen system that includes Braille, for instance,” says one. “For companies seeking a locker solution, we recommend putting it in the mailroom space, as that is already being designed to meet ADA standards.”

Anderson says, “Our policy is not to make any decisions or invest any money unless someone at the property has met with the carriers so that they are onboard with the plan.”

Residents Take Notice

Anderson says the package delivery phenomenon is something that some residents are just now discovering, too.

It’s critical to communicate and promote to new and existing residents about any new package retrieval system, Anderson says.

“Not fully understanding what our community could do for our residents when it comes to package delivery, some of our residents, instead opted to have their packages delivered elsewhere—at their workplace office, for example,” Anderson says. “They knew our office hours and their work hours didn’t always work well together, so having their package sent to their office was more convenient for them. Then they still had to get it home.

“But once we determined and instituted the right system, they began to have their packages delivered to their apartments. By them using it, it showed us that they liked the system.”

Anderson says, for example, a 6x10 room with shelves will work well for a 240-unit property that receives approximately 15 packages per day.

Working with a package locker provider, JVM created a “room within a room” concept at one of its properties, says JVM Vice President of Marketing and Business Development Mary Herrold. This abbreviated system is being installed into a renovated cyber lounge. It was chosen because this community gets fewer than 15 packages/day and the packages are picked up within 18 hours, Herrold says.

She says the concept was created because building a new room just for package delivery was not needed, nor was it physically possible because of space concerns. In this storage room, residents are given fob access to the cyber lounge and access their package(s) with a code provided by the carrier. Herrold says her investment was $7,500 and included installation, software and code pad.

“Helping residents to retrieve their packages is important to us because it’s part of our promise to deliver excellent customer service,” O’Berry says.

24-Hour Delivery

AMLI Residential employs a similar package room solution using Luxer Room, a controlled-access technology built by package locker provider Luxer One. When packages are delivered to the 24/7 video surveilled room, residents get a text with an access code to gain entry and retrieve their item from labeled shelving inside.

AMLI Management CEO and President, Steve Hallsey, says “Residents love it because they can pick up their packages 24 hours a day.”

Hallsey says, “Ratings and reviews for the properties where we’ve rolled this out have improved faster than at properties where we don’t have it deployed.”

He says a 25 percent increase in overall customer satisfaction comes as a result of residents having secure access to packages and onsite staff being more available.

In San Francisco specifically, where many residents commute to Silicon Valley and have unconventional work schedules, a fully-staffed 24/7 concierge service is not only unrealistic but is inefficient, says Mark Alfieri, Chief Executive Officer, Monogram Residential Trust.

“[Increasing package delivery] is a trend we are seeing across our portfolio on a national scale,” Alfieri says. “Package delivery is no longer a luxury service, it is a standard amenity our residents expect.”

In April, Monogram opened Olume, a 12-story, 121-unit property in San Francisco’s Mission District, which boasts a locker system from Package Concierge.

Monogram worked with its property management software to estimate package volume specifics for Olume, looking at general package volume and package sizes that other nearby multifamily communities were receiving daily, as well, Alfieri says.

“Overall, we noticed that properties with a younger renter base received higher volumes of packages. Additionally, services like Amazon and Google Express continue to evolve and make online shopping faster and more convenient.”

Alfieri factored in a growth rate of 1.5 percent annually for package delivery, a figure he called the industry standard at this time. “We’ll continue to monitor this,” he says.

“Space in apartments in markets such as San Francisco is precious,” Alfieri says. “Using the space we’d have, we can reconfigure our lockers. I see a time in the near future when apartments will be built with their own package locker-type space near their front door.”

Customized Solutions

Some communities are creating or considering creating their own package management facilities within their communities.

GoldOller Real Estate Investments, which operates 40,000 units, launched a company-wide initiative for package handling called GoPack&Ship. Within the year, all GoldOller communities will offer this service. Richard Oller, GoldOller’s Chairman, says apartment living is all about convenience and lifestyle services and today that must include safe and reliable package administration.

Oller says the GOPack&Ship Area operating hours will be the same as the clubhouse (9 a.m. to 6 p.m. weekdays; as late as 5 p.m. on weekends), where most of these shipping facilities will be located. Oller says the hours could be adjusted, based on demand.

The solution will debut soon at its 2,000-unit GoldOller Canterbury Green community in Fort Wayne, Ind. Oller says this complete package management facility will be fully staffed.

Canterbury Green will both accept and distribute packages, and facilitate outgoing packages including returns.

It is designating 400+ square feet in its GoTech business lounge with more than 1,000 square feet of shelf space.

“Prior to our ownership, this property did not accept packages,” Oller says. “To make sure the space we were carving out for this service would meet and exceed demand, we reached out to the community at large. We spoke with local shipping companies to find out how many packages they handle for our community during the peak holiday season, multiplied that by the average package size in the United States and came up with a good estimate of our current space needs, then we doubled it.”

Oller does not employ a one-size-fits-all solution. At many of its smaller garden properties, a secure package room in the leasing center or clubroom remains adequate, Oller says. At those communities, Oller has added tracking and notification technology, re-secured the package rooms and redesigned them to hold more packages.

Melanie French, Executive Vice President, Operations, Cortland Partners, says that during the past two years it has evaluated having package lockers across the portfolio.

“We felt that this would be an expensive option that would be more expensive to maintain through the years and would not work well for every community,” she says. “We looked at hand delivering packages as a customer touchpoint, but when surveyed, residents did not want this option.”

She says lockers can work well in urban, high-rise communities because those are enclosed, and by natural design, have 24-hour access to mailbox areas.

Cortland Partners is using a software logging and alert system that is in conjunction with its own storage space at 86 of its properties.

French says associates use their iPads to scan the package barcodes using a web-based package tracking software, which then notifies the resident via text or email.

“Historically, it would take about 11 to 12 minutes per package for the process of receiving, documenting, notifying the resident, getting the package for the resident and gaining their signature,” French says.

“That time has been greatly reduced. Phone calls to and from the resident and the leasing office about packages have been reduced by more than 50 percent. Associates like the ease and simplicity of the system, tracking is improved and most importantly resident feedback has been extremely positive, both in person and in surveys and online reviews.”

French says she is considering converting one vacant apartment per community into a resident services location, offering a staffed concierge-type service open 12 hours a day. This center will provide dry cleaning pick up and drop off, packing and shipping of packages, a print, scan and copier services, along with a small grocer-style market offering a limited selection of refrigerated drinks and simple snacks.

“Essentially, our residents will not want or need to leave the community after a tiring day of work,” French says.

She estimates that by doing this, the community would give up $1,200 to $1,500 per month in rent, add staffing and have a one-time set up cost for equipment.

“It makes sense economically and would cost less than $50,000 annually,” French says. “Package lockers can cost twice that initially, often have to be maintained by the community in addition to the monthly software cost that can run several hundred dollars per month. All of this, and they still only house packages with none of the other resident benefits offered by the concierge center.”

Back-Office Bonanza

P.B. Bell has always allotted ample back-office space for its staff so that they can comfortably perform their jobs. After converting to a paperless office a couple of years ago, P.B. Bell’s President of Property Services Debbie Willis says the company decided to use much of this extra space to store our packages. This space is generally 9 x 8 feet in size.

Willis says that because P.B. Bell assigned such a great deal of space for its maintenance team, where it sets up shop and performs its duties, it is finding that part of that area can be used to accommodate overflow when there is a high volume of package deliveries.

“This space is basically unfinished, roughed in, so it makes sense,” Willis says. “At this time, we don’t see the value in designing a finished room for packages.”

P.B. Bell has 42 apartment communities in the Phoenix metropolitan area. Willis says her communities receive approximately 10 to 15 resident packages per day at their larger communities (300 to 400 units).

Willis says the community’s office hours typically are from 9 a.m. to 6 p.m., with one or two nights staying open until 7. It also is open from 10 a.m. to 5 p.m. on Saturday and Sunday.

“We look forward to the fact that our residents will come to visit us to pick up their packages,” Willis says. “It gives us a chance to get some face time. For many residents, you never get to see them or talk to them.”

Notification At Hubbard Place in downtown Chicago, deliveries are made by James Bond, so to speak.

Residents are notified via text message with a secret code they can use to open a custom wood drawer built into the lobby wall to retrieve packages.

“The system, which we affectionately call ‘James Bond’ internally, lets residents access their deliveries 24/7 and allows our staff to focus on other priorities,” says Sheila Byrne, Executive Vice President of Property Management for The Habitat Company.

Waterton’s Presidential Towers, Chicago’s largest apartment community, had a staggering 99,881 packages delivered in 2015, an 11 percent increase over 2014.

Residents of the community’s 2,346 units receive upwards of 1,000 packages per day between Thanksgiving and Christmas, leaving it up to Waterton to figure out how to sort and store all of the items until residents are able to pick them up.

During the holidays, that means setting aside a special overflow space for deliveries and rearranging schedules so more staff members are on hand to retrieve packages during the 4 p.m. to 7 p.m. rush, when residents return from work.

A recent renovation of the property, which was built in the mid-1980s, included the addition of four television-like monitors in the lobby that notify residents when they have a delivery. Residents also have the ability to sign up for notifications that can be sent via text or email.

Tearing Up The Blueprints

In some cases, demand for resident package delivery is causing developers to rearrange their approved community blueprints either before construction begins or even after concrete has been poured.

Sabrina Taylor, a Regional Property Supervisor for PAULS real estate company in Denver, recommended that an area intended for a maintenance room be converted to a package locker system at the VIA Apartments community. She says there wasn’t pushback.

Taylor, a 14-year industry veteran who has experienced onsite the time and attention that staff-directed package management involves, says her company told her, “This makes sense. Make it work.”

To compensate for it in her budget, she cut expenses intended for a kiosk and monitor.

“All we had to do was remove a door and add sources for electricity and data,” Taylor says. “When you see it, it doesn’t look like an afterthought. It so happens that the area was next to our mail room, anyway. We were able to make the locker colors match our interior design. We made sure that the lockers were in an area that is along the leasing tour path. We market it as an amenity—and it’s one that we sell the hardest.”

“Package locker systems have become our new standard for our new multifamily developments,” Taylor says. “Since the successful implementation at VIA, we now plan for package locker systems, budget for them, and make sure they are a part of our programming.”