Last-mile delivery is where customer expectations come to life. It’s the final step in the logistics journey, and it plays a critical role in shaping your brand’s reputation. But while it’s essential for a smooth customer journey, it can also be a silent contributor to rising costs.
Many businesses aren’t fully aware of how much money gets tied up in this phase of logistics. Under the pressure of reducing costs and keeping up with rising e-commerce volumes, the transition from home delivery to parcel locker pickup points is in full speed. Yet with this cost-effective switch to automation, are we decreasing value in other areas of the customer retention game? What exactly are the hidden costs of outsourced parcel lockers, and how can you address them before they start eating into your margins?
The hidden costs that pile up
While fuel, labor, and other obvious costs are easy to track, quality locker delivery often carries hidden financial burdens. For example, managing multiple couriers might seem like a smart strategy for flexibility and coverage, but it can quickly lead to chaos. Each courier has its own systems and processes, resulting in increased complexity and potential delays.
When you introduce parcel lockers in your stores with the expectation of boosting foot traffic and cutting costs, you could unintentionally send customers to competitors if these lockers are managed by different companies. Separate lockers don’t share capacity. Customers may encounter full lockers and have no choice but to seek alternatives, disrupting their experience and weakening their loyalty to your brand. And all of that while the locker standing next to it might be empty (this happens a lot in mature locker markets like Finland).
Implementing an agnostic locker system can help streamline operations, as these lockers can be 12% cheaper for couriers compared to home delivery. However, the real benefits hinge on effectively designing the consumer experience around these lockers. If the process isn’t thoughtfully structured, you risk frustrating customers, diminishing brand value and undermining the important relationship you’re trying to build with your customers.
The customer journey matters
The experience a customer has when picking up a package plays a crucial role in shaping their perception of your brand. Picture this: You order a product online, only to receive a generic email from the courier that lacks any brand mention. Suddenly, you feel anxious about where to pickup your order. Navigating multiple lockers can turn a simple pickup into a frustrating experience.
Worse yet, when customers encounter a retailer who seems overwhelmed and grumpy due to constant inquiries about the lockers, it can significantly dampen their experience. And because these lockers in-store are owned by courier partners, in-store personnel are often lost on how to answer questions. These scenarios can leave customers feeling disconnected from your brand, underwhelmed by your service in-store, making them more likely to choose a competitor next time, thus undermining the trust and loyalty you’ve worked hard to build.
The bigger picture: Your brand’s reputation
It’s not just your budget that’s at risk. An inconsistent parcel locker process can damage your brand’s reputation. Today’s customers have high expectations for fast and reliable delivery. If your service is inconsistent—whether through delays, missed deliveries, or damaged goods—it can quickly erode customer trust. This, in turn, leads to negative reviews, lower customer retention rates, and even brand damage that can be hard to reverse.
Imagine instead of outsourcing the lockers in your stores, you take ownership. A seamless, well-managed locker operation designed for your customers and brand does more than ensure timely deliveries—it delivers on your brand’s promise. Consistent, reliable delivery experiences build customer loyalty and strengthen your reputation in a competitive marketplace.
Owning the lockers does not mean you have to arrange your own logistics, we simply suggest changing the ownership of the physical machines and the customer-facing brand.. Connect your courier partners and let them handle the part they are incredibly good at while placing your brand and customer experience front and center.
Ensuring that your locker logistics align with customer expectations is key to maintaining this positive relationship and standing out from the competition. When you control the delivery process, you ensure that your brand is consistently delivering on the promises it makes.
Conclusion
Lockers should enhance efficiency, not complicate the customer experience. By taking control of your lockers, you can still collaborate with your logistics partners but ensure a consistent and seamless experience from order to pickup. Rethinking how you manage parcel locker delivery can turn a logistical challenge into a strategic advantage, enhancing your brand’s promise and ensuring every customer interaction reinforces that promise.
Curious how you can streamline last-mile delivery and keep customers happy? Stay tuned for actionable insights in our upcoming posts!
In the meantime, follow us on LinkedIn for sneak peeks and browse our past blogs for more insights.
