Smart parcel locker market trends: How big is the smart lock industry?

The smart locker industry has exploded in recent years. Get the inside scoop on parcel locker market trends, and learn how businesses that adopt the technology gain a competitive advantage.
SendTech Staff Writer Pitney Bowes
07/16/2021 Receiving

The smart locker industry has exploded in recent years. Get the inside scoop on parcel locker market trends, and learn how businesses that adopt the technology gain a competitive advantage.

The global smart parcel locker market is predicted to reach over $3.5 billion by 2028.

The accelerated growth of ecommerce and an increasing demand for technology-enabled solutions is fueling trends in the electronic locker market across multiple industries. Impacted stakeholders and industries must get ahead of the curve to gain the competitive advantage. Here’s what you need to know.

Development of the smart parcel locker market

Simple locker systems have been used for many years in places such as school hallways, locker rooms and transit terminals. The predecessors of today’s smart electronic lockers relied on keys or combination locks to keep the contents secure. But locker management was a hassle: keys frequently got lost or broken, and combinations were forgotten. What’s more, the workflow was entirely manual and record-keeping was paper-based, time consuming and prone to errors.

In the early 21st century, technologies such as bar codes, wireless communications and database software led to the development of smart locker systems. The first U.S. patent for an electronic locker system, issued in 2003, described an invention with “locker management capabilities that are not possible with conventional locker systems that enhance security and reduce operating costs.”

Two decades later, electronic locker systems have achieved widespread adoption as multiple industries developed new applications for smart parcel lockers. At the same time, electronic locker technology evolved to feature a wide range of options that improve operational efficiency and enhance the user experience, including video, remote monitoring, electronic notifications and more. This article presents an overview of the diverse market trends and consumer behaviors that are shaping today’s smart parcel locker market, and forecasts of future market growth.

Smart parcel locker adoption

At first, it was assumed that the market for electronic locker systems would be limited to schools, gyms, fitness centers and airports. It wasn’t until the advent of e-commerce that demand for smart parcel lockers became widespread. Retailers quickly realized that smart lockers made it possible to satisfy customer demand for fast delivery without the high cost of expedited shipping, and it wasn’t long before retail became the largest market for the technology. Colleges and universities, both of which have many students who prefer to shop online, were also quick to see the benefits of smart electronic locker systems. Mailrooms that had been overwhelmed by the volume of parcels were able to provide secure, convenient delivery. Demand increased when the pandemic drove the need for contactless delivery. Many businesses began using electronic locker systems to solve many of the logistical challenges of the hybrid workplace. Read this article for a more in-depth exploration of business applications for electronic locker systems.

Smart parcel locker market growth trends

When the pandemic forced brick and mortar retail outlets to shut down, the resulting explosion in e-commerce drove increased demand for electronic locker systems. In 2021, retail accounted for a whopping 57 percent of global revenue, and just over 70 percent in North America. Revenues for this sector are forecast to grow at 12 percent CAGR through 2028.

The combined global revenue share for the university and enterprise sectors (11 and 9 percent respectively) is less than half that of retail, but with a CAGR of just over 13 percent, both sectors are expected to grow at a faster pace than retail over the next five years. By 2028, forecasts indicate that revenue will grow fastest in other sectors that may include such diverse applications as libraries, evidence management and field service. However it is likely that these emerging sectors will still represent a relatively small number of locker units compared to retail.

What’s driving the smart parcel locker market?

Smart parcel lockers to the rescue 

So, what’s driving the smart parcel locker market? 

In a word: shipping. The booming ecommerce industry combined with consumer incentives like free shipping drove package shipping volume up by nearly 17% in 2020. While shutdowns may have contributed to this increase, it shows no sign of slowing down. Just ask the mailrooms of the enterprises, government agencies and university campuses scrambling to meet the surge. Or the retailers trying to manage its ripple effects as demand for curbside delivery and Buy Online, Pick Up In Store (BOPIS) soars. Together, these forces are fueling the need for more reliable, secure, technology-enhanced parcel services.

Smart lockers are a simple, modern solution to manage evolving package, mail and asset delivery demands. They increase efficiencies and provide secure, contactless pickup options for recipients. Businesses are embracing the smart locker trend for their specific needs in innovative ways, demonstrating that their uses are unlimited.

See the breakdown of the smart locker market by trend and sector, region and provider.  

Smart parcel locker trends

This list isn’t exhaustive, but it is representative of some of the top smart locker trends contributing to their market growth.

  • Postal lockers: While smart parcel lockers are more commonly thought of for packages, they’re also being used as a safe, secure and convenient way to deliver mail 24/7. USPS rules and restrictions apply so providers with existing ties to the shipping industry are leading this trend. Printing shipping labels and sending packages from a smart locker is a trend on the horizon.
  • Asset lockers: In addition to preventing theft and loss, asset lockers streamline the allocation, distribution and management of assets ranging from laptops to safety equipment. This smart locker trend is increasingly sought after by organizations that need to ensure an end-to-end chain of custody for assets.
  • Retail lockers: Buy Online, Pick Up in Store (BOPIS) programs help retailers reduce the cost of last-mile shipping by allowing them to leverage in-store inventory. That, as well as contactless delivery and improving the package pickup experience for recipients, are contributing to retail’s adoption of smart parcel lockers. 
  • Modular lockers: When space is at a premium or a workflow is especially complicated, one size doesn’t fit all. Demand is growing in the smart locker market for customizable solutions that accommodate specific volume, space, layout and aesthetic requirements. Scalability is another sought-after feature that modular lockers address.
  • Community lockers: Local communities are adopting the smart locker trend to enhance public services. Smart lockers allow citizens to request important documents like licenses and permits and retrieve them on their own schedule, freeing staff to focus on other critical tasks.  
  • Distribution lockers: The shift to a hybrid workforce creates challenges for companies who need to distribute necessary materials and supplies ad hock. Distribution lockers provide remote workers secure access to the resources they need to keep business moving. 

Sectors adopting smart locker solutions

Some 61% of centralized mailrooms plan to invest in smart parcel lockers in the future. Asset management and retail will account for even more adoption. Here are just a few industries driving the smart locker market.

  • Colleges and universities: Overburdened staff are managing high volumes of packages, heightened service expectations and new health and safety protocols. Smart parcel lockers not only transform campus package and mail delivery, they’re being used to create new services for campus bookstores, libraries and more.
  • Enterprises: Asset management has always been a challenge for employers. Remote work has only increased the pain. As hybrid work environments become the norm, so too will smart parcel lockers as a safe and logical solution for managing IT, equipment and supplies for both remote and onsite workers.
  • Government agencies: In addition to traditional challenges of package and asset management, government agencies require visibility into everything that moves across the organization, including sensitive documents. The ability to integrate existing software for chain of custody and reporting needs is critical to government adoption.

Smart locker market growth by region

According to a study by GlobalInfoResearch, total global revenue for electronic locker systems nearly quintupled from 2017 to 2021, growing from $398 million to $1.495 billion in 2021, and is forecast to exceed $3.5 billion in 2028. As of 2021, Europe accounted for the lion’s share of global revenues, followed by Asia Pacific and North America at second and third place respectively. The Asia Pacific region also leads in terms of units sold, with more than twice the number of units sold in Europe and North America, the next two largest markets, combined. China leads the Asia Pacific’s growth due to its large population and ecommerce giants like Alibaba.

Adoption of advanced technologies

As technology continues to advance, electronic locker system manufacturers will continue to integrate advanced features to enhance security, protect the chain of custody and improve convenience. Current integrations already include chip cards in applications that require payment, and biotechnology applications for identification including thumbprint, retina scanning and facial recognition. In the future, artificial intelligence may play a role in determining how smart locker systems are used and deployed.

Adoption by region

According to a Fortune Business Insights study, North America is forecasted to hold the highest market share of the smart locker market in the coming years, while Asia Pacific is expected to see the highest compound annual growth rate (CAGR).

The growing popularity of online shopping in North America is compelling ecommerce providers to adopt technology that helps meet the demand and improve the customer experience. Europe’s established logistics networks are securing its second-place position in the smart locker market. Meanwhile, China is leading the Asia Pacific’s CAGR due to its large population and ecommerce giants like Alibaba.

Emerging providers

The global market for smart parcel lockers is undergoing robust competition and innovation. Take, for example, security-focused manufacturers designing smart lockers for law enforcement or refrigeration companies expanding to lockers.

Fittingly, Pitney Bowes has entered the US market with smart parcel lockers made of US steel coupled with its nationwide logistics network and award-winning local service and support team. Other entries to the market are expected to accelerate.

Watch this space

The competitive landscape for smart parcel lockers is coming into focus and it’s a view no relevant industry or stakeholder can afford to ignore.

As ecommerce expands across the globe and the demand for technology-enabled convenience rises, it’s time to smart-locker up or get left behind..