Pandora’s Box: Determining the Best Path Forward for Package Management

by Katie Sloan

If you have sufficient room and staff at your property to handle the influx of package deliveries today, chances are good you may come up short tomorrow.

 “I’m sure in a few years, I will say the same thing I said two years ago: We still don’t have large enough package areas,” says Kristen Penrod, a principal with Parallel.

Most properties report receiving an average of 150 to 200 packages per day. But at larger properties, and during peak times such as move-in, deliveries can multiply quickly. “During the busier times of year, 600 a day is not unheard of,” says Matt Fulton, managing director with Greystar. “The sheer volume is concerning. Properties built even five years ago don’t have the room to store that many packages.”

According to American Campus Communities’ 2019 Spring Living Survey, the REIT was able to identify that on average, 91 percent of residents receive one package a week and that 86 percent of residents retrieve their packages within 24 hours. Craig Meddin, founder and CEO of Postal Solutions, which has been delivering mail and packages to student housing for 20 years, says that package volume is increasing 15 percent year-over-year. “We have some student housing sites see 50 percent increases from one year to the next,” he says.

Package management is an issue the industry is still grappling with and will continue to do so as e-commerce habits evolve. Like student housing’s infamous high-speed internet amenity, package management requires innovative and immediate operational solutions implemented faster in student housing than you might see such solutions showing up in conventional multifamily. 

Parallel has just opened the 502-bed MUZE near the University of Texas, Austin. The developer designed a package room that fits seamlessly behind the front reception desk. The staff is responsible for managing the deliveries, but box pileup stays out of the visible sightline.

The convenience of e-commerce is particularly appealing to international students receiving personal items and cooking ingredients from home. Parents also love sending care packages or directly ordering items for their college students. Fulton says, too, that if you’re managing an unfurnished project, you can expect oversized furniture deliveries regularly. And the increasing popularity of meal prep deliveries, like Hello Fresh and Blue Apron, is also adding new burdens to the package-delivery process. According to Meddin, Valentine’s Day and Halloween are also peak package seasons. 

There are several options today to address this operational challenge. Many owners execute a number of different approaches within their portfolio. Some are still receiving and delivering packages the old-fashioned way: drivers haul their packages straight to the office, the staff signs for them if necessary, then notifies the resident to come to the office to pick up the package during office hours. Some student housing companies hand deliver the package directly to the resident’s door as another point of contact for good service and high reputation marks.

Others are examining a more self-serve, 24-7 option that puts the whole process directly in the hands of the students through automated lockers and package rooms. In most cases, these solutions remove the ownership and management staff entirely from the logistical process — not to mention removing them from any liability should a package not be received or arrive damaged. A carrier bypasses the office, heads straight to the designated package delivery area, be it a group of lockers and/or a package room, drops the packages in their secure environment, then the resident receives notification to pick up their package any time, on their own clock.

According to Anh Tran, CEO and Co-Founder of Notifii, the message that goes directly to students is an important piece of the package-management puzzle. “Students represent the largest demographic of package recipients. That makes package management and most importantly, the text notification feature, an operational necessity,” says Tran.

There are some hybrids of all these models. Parallel — which developed the 502-bed MUZE near the University of Texas, Austin — designed a package room that fits seamlessly behind the front reception desk. The staff is responsible for managing the deliveries, but box pileup stays out of the visible sightline.

“We discussed the package lockers at length with our designers and ultimately decided a package room controlled by management was best,” Penrod says. “This room almost disappears from the resident’s view and alleviates our office from being cluttered with packages all the time. On our next project, we have a slightly larger site, so we are able to provide lockers and a package room, which will be nice for resident ease to access the smaller packages without going to management.”

Meddin says the package locker and monitored package room combo is becoming extremely popular in student housing. The monitored package room offers flexibility and versatility, while the lockers are quick and easy. They can also be configured to be completely self-serve in conjunction with a package room. For some operators, lockers can help with marketing or add to the sophistication of a community’s image by being wrapped or ordered with a custom color to look impressive.

 “Many of our clients pick a fun color for lockers or wrap them in a creative style that they customize,” Meddin says. “It has become a touring amenity for prospective residents. We have clients who plan where they’re going to put their lockers so that they are clearly on the path of property tours.”

ACC is one such company putting their lockers to use in this way. “Locker systems can be wrapped with customized vinyl that allows the package solution to be incorporated into the design as an amenity with colors, logos, art, and marketing,” says Heather Laney, senior vice president of development and property integration with ACC.

“We believe that locker management systems will become more prevalent as each year passes,”adds Laney. “American Campus will not allow parcel carriers to deliver directly to the student door for several reasons, including security of the residents and loss or damage of packages left outside unit doors.”

For future developments, ACC is planning a designated space in each new project for locker systems given a specified formula for the appropriate number of lockers to residents — and the necessary power and data those lockers will require. ACC will include a smaller package room behind the reception desk to manage any overflow or oversized packages.

“ACC believes package locker solutions are the way of the future,” Laney says. “This allows students access to retrieve their packages 24 hours a day rather than just during office hours. Locker solutions remove the middle man, reducing the number of times each package is handled, ultimately reducing the amount of damage or loss.”

For its existing portfolio, ACC will transition to lockers. The company tested several locker package solutions over the previous year. “We wanted to make sure we tested throughout a full year — through each season: move-in, Christmas, move-out,” says Laney. “Transitioning to locker systems will allow ACC to be removed from the liability of loss or damage. We will also be able to reduce the number of employee hours working on package management, allowing us to redirect our team’s efforts to leasing and overall customer service of our existing residents.”

Third-party companies such as Postal Solutions are now working with developers so early in the process of a new build that they’re usually consulted before or during the architectural renderings process. “Owner-operators are building with a package solution in mind today more than they ever have before,” Meddin says. “It’s much more common today to plan for the size of a package locker system a developer wants or how big of a room they need in advance of construction. The advice I give to developers is, ‘if you have the space for a package solution, plan on needing even more space in the near future.’ Package volume is ever-increasing.”

Operators differ in their approaches to the staffing of package management. Third party companies offer complete outsourcing of the amenity, both physically and from a staffing perspective. Others can’t quite yet justify the extra expense of a complete and total outsource.

“On the student side, we use the Notifii software in many locations,” says Fulton. “It helps streamline the log-in process and encourages recipients to pick up their packages in a timely manner. But even that system requires time and manpower to sort and log in packages. However, it is efficient enough that we don’t feel the need to add staff to deal with the extra package load.”

Package Concierge lockers at Hub on Campus Orlando. Many communities use the lockers as blank canvases that can advance a brand and impress prospective residents during property tours.

Package Concierge offers package management solutions including indoor and outdoor lockers and overflow or stand-alone package rooms. Lockers come in three styles. Each is designed to accommodate different types of facilities, price points and indoor or outdoor environments. When lockers and package rooms are used in tandem, they communicate electronically and can eliminate the need for staff involvement in the package-management process. 

“Nearly every student housing community has or is considering how to tackle the issue of managing the growing mountains of packages arriving daily in their community,” says Georgianna Oliver, founder of Package Concierge. “They are considering automation as a way of alleviating the strain on their staff while also providing their students with a convenient solution that is easy to use. Students prefer self-service options.”

Earmarking square footage for non-revenue-generating purposes can be a pain point. Some conventional multifamily owners make up for it by parlaying their package systems into an ancillary income stream through registration and amenity fees. While some student housing owner/operators do add fees to use the locker system, just as many avoid those fees due to not wanting to be the one property in a market charging fees, Meddin says.

“Our projects are primarily dense, urban-infill developments, and real estate is precious,” says Penrod. “So we are continuously looking for thoughtful ways to provide the package space needed for functionality while incorporating it creatively so we don’t simply lose that space in our ground floor amenity areas.”

Most owners are adapting to embrace of e-commerce in their own ways. For Campus Advantage, automated package rooms are paying off. “Any time we are doing a new project or a renovation, we are putting in package rooms,” says Katy Smerko, vice president of operations for Campus Advantage. “Students can go into the rooms 24 hours a day. At the properties where we’ve implemented this solution, we haven’t seen any packages stolen. The biggest challenge is training the package delivery companies to buy into the system. It’s one extra step for them instead of dropping the packages off at the office.”

To call package management an amenity on par with fitness centers and fast internet might be a bit premature, but it may not be far off. If students can’t get their package how they want, when they want, that could become a potential deal-breaker for a prospective resident.

“I don’t think students will not rent because we don’t have a package room, but I do think they won’t renew,” says Penrod. “They don’t even ask if we have a package room because, at this point, it is expected as part of what a building has to offer. Operationally, we are having to build the management of these systems into our budgets now to alleviate adding staff to just deal with packages. It’s a constant challenge to balance our amenity spaces with the less exciting requirements like package management, but we know it’s important and continue to improve ways to deal with it.” 

— Lynn Peisner

This article originally appeared in the September/October 2019 issue of Student Housing Business magazine. 

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