The Boxes of the Smart Locker Industry.
The Bubbles of Smart Lockers
Over the last 12 months, I have spent a lot of time with locker manufacturers and resellers, sitting down together to review the market and the manufacturer’s position in it. While it is one of my favorite parts about my job, the conversations are ever so different from one meeting to the next.
Recently, someone pressed me on the topic of the market size of “smart lockers.” Over the years, we have invested time and resources to understand this question better. We’ve had countless conversations with industry leaders to put the pieces together. The more conversations I have, the more I realize how fragmented this industry truly is.
When I speak to parcel locker companies in the US, I ask them the question, “What is the size of the smart locker market?” They immediately focus on the number of multi-family residents, universities, and retail locations, layering in the average parcel deliveries at each one of those segments.
Every manufacturer has its own focus, which is based on industries, use cases, and geography. I continue to find new manufacturers and brands every week, focusing on solutions for a specific customer. Our estimated numbers continue to increase as we uncover these players in different market corners.
Is this amount of fragmentation good or bad? Everyone might have a different opinion, but it is not healthy for the overall space. This amount of fragmentation has prohibited smart lockers from becoming more mainstream. A recent study indicates that the smart locker market will grow at a +19% CAGR through 2030. The only way to achieve this growth is by creating mainstream solutions.
What is needed to become more mainstream? Here are my TOP 5…
Consolidation: This may come in the form of traditional M&A but also consolidation of software solutions. So many locker manufacturers have their proprietary version of shitty software. This creates isolation and the inability to be leveraged for more applications and integrations. Creating popular industry standards will raise the number of ships in the industry.
Better UI/UX: The software experience for locker owners/operators and their users has been really poor. Management software has software designs that are reminiscent of decades prior. User experiences matter when it comes to the further growth of this industry. We need to ensure that people across all industries can understand and quickly be trained to maximize the value of their smart locker investment.
Easier Installation: Many locker companies make installation very painful. Only a few companies are spending the time to create products that drastically reduce the time needed to deploy a new locker location. The complex installation process creates additional friction that the customer digests in their calculation when deciding to purchase a locker system.
Standardized Configurations: Many innovative locker manufacturers pride themselves on customization. Their sales representatives take the easy road and tell the prospective customer, “We will build whatever locker design you want!” This strategy creates a couple of problems… First, it lengthens the sales cycle to finalize the order with the customer. Second, it makes longer lead times for the customer. This slows growth for the company and the time frame when the customer will return and order more lockers. Last but not least, it cuts into the locker manufacturer’s gross margins. Developing standardized configurations will speed up the sales process delivery process and make a more frictionless experience.
More APIs & Integrations: A transaction with a locker is typically only part of a more significant transaction and flow. Integrations are critical for the continued growth of the intelligent locker industry. Building a vast API library can help speed up those integrations for customers. Many locker companies say they have APIs, but typically, those APIs are minimal, and the integrator has a lot of work to build up to the APIs to integrate successfully.
Conclusion: The smart locker industry has significant opportunities over the next five years. However, I encourage you to look broader than the specific market you service. We need many lockers in our communities for various applications and use cases. The more consumers use lockers daily, the larger the market grows collectively.