The Deal with Deliveries

Just in time for what’s expected to be another record year for online holiday shopping, NMHC and Kingsley Associates deliver the goods on all things packages at apartments.

Rick Haughey 2014

As online shopping has continued to grow in popularity, many apartment communities are finding themselves acting as de facto package drop-off, distribution and storage centers for their residents’ deliveries. This year’s holiday season should test community limits as another delivery deluge is on the way.

According to the National Retail Federation (NRF), Americans plan to do half their holiday shopping online in 2015. NRF forecasts show online sales increasing between 6 to 8 percent in November and December, pushing this year’s online holiday sales totals as high as $105 billion. In anticipation, parcel delivery companies are preparing in a big way.

FedEx expects double-digit gains in holiday shipments this year and three days of double its normal package volume in the wake of Cyber Monday. And rival UPS has advised online retailers of possible delays due to high package volume, which is expected to double from typical volumes to 28 million parcels a day from Thanksgiving to Christmas.

While some apartment firms consider package service a resident amenity and are experimenting with various solutions to better manage the mounting package deliveries, others believe it’s the responsibility of package carriers, and are looking to get out of the process altogether.

Click on image to enlarge.

Click on image to enlarge.

Camden Property Trust, for one, announced management offices would stop accepting parcels at all of its 169 properties nationwide this year. Package carriers can still deliver to residents’ doors, but the management offices will no longer hold packages for residents if they’re not home at time of delivery. The controversial decision led to news coverage in both local and national media, including on the Today Show and NBC Nightly News and in The Wall Street Journal.

The wrap

Despite the recent media attention, little industry-wide information on package delivery at apartment communities exists. Recognizing that package delivery has been a mounting issue for some time, NMHC and Kingsley Associates partnered on the industry’s first national package survey last year to get a handle on the degree of delivery dilemma.

The research showed that a typical apartment community can receive as many as 100 packages a week—a figure that can double during the holiday season. Nearly a quarter of respondents said they received more than 200 packages a week during the holiday season.

Other takeaways included:

  • Three out of four package carriers typically try to deliver a package directly to a resident’s door. However, if a resident isn’t home, 70 percent of carriers leave the package at the management office. Nearly nine out of 10 management offices will accept those packages on their residents’ behalves.
  • One in four apartment communities uses specialized software to manage packages on site, a ratio which increases to three out of five for high-rise communities. Nine percent say they have self-service package lockers.
  • Eighty-seven percent of apartment communities have dedicated space for package storage, with 77 square feet being the average square footage reserved for storing them. That area almost doubles in high-rise communities.
  • Sixty-five percent of apartment property managers reported that residents were concerned about the security of packages left at their doors. In a 2013 resident preferences survey, a package delivery/holding area was the second most-desired community amenity after fitness centers.

More delivery details

This year, a new apartment resident preferences survey from NMHC and Kingsley Associates asked more in-depth questions about package delivery and storage. (Find out more about the survey at www.nmhc.org/residents.) Nearly three out of four (72 percent) apartment residents indicated that they were interested or very interested in a package delivery or holding area.

Apartment residents in the Minneapolis-St. Paul metro area were most passionate about a package holding area, with 81 percent of respondents indicating that it was a community amenity of interest. The amenity was also especially popular in the metro areas around Atlanta (79 percent), Chicago (79 percent), St. Louis (78 percent) and Houston (77 percent).

However, even with package holding areas, package pick-up sometimes remains a challenge at many communities. Management offices are often only open during normal business hours, which makes it difficult for residents who work during the day to retrieve their packages.

When asked what the preferred solution was for picking up packages after hours, roughly a third (32 percent) of residents said they would like their apartment communities to install self-serve package lockers. The data also showed that, in general, the younger the resident, the more interested he or she was in this type of package solution. However, when asked about their willingness to pay for the use of a package locker, 87 percent of all respondents said they would not pay.

Residents were open to other options for after-hours package pick-ups, but there was hardly a preferred method. Twenty-one percent said they would prefer their packages be dropped at their door and 20 percent wanted the management office to be kept open later one or two days a week for package pick-up. Another 12 percent preferred for staff to deliver packages inside their units and 11 percent said they would rather the community offer some other self-service package holding or pick-up area.

While the merits of each package delivery solution in apartment communities can be debated, the upshot is that our increasingly digital economy has revolutionized the entire supply and distribution chain for goods and services. Like it or not, apartment communities are currently at the end of that chain and struggling to adjust.

New on-site policies, new services and technology innovations will have to be evaluated and updated as package volumes set new records and parcel carriers and others pilot new solutions. In fact, some have already gotten started. Several carriers have begun delivery to local retail establishments for customer pick up. The U.S. Postal Service is venturing into building package lockers, something Amazon currently deploys in several cities. Other companies like Uber are even considering package delivery using their drivers, and Google is piloting same-day delivery in select markets.

But with just 25 days between Cyber Monday and Christmas, this year’s holiday delivery period is set to be especially intense. So, happy holidays to all the harried property managers out there sorting through the tide of seasonal deliveries and good luck in the New Year finding the right package solution for your company and residents.

Rick Haughey is the vice president for industry technology initiatives at the National Multifamily Housing Council in Washington, D.C. He can be reached at rhaughey@nmhc.org. More information is available at www.nmhc.org/packages.