Apartment Managers Dealing With Holiday Package Onslaught That Seems To Double Every Year
The 2019 holiday season was a good one for many retailers, especially online. E-commerce sales grew again during the busiest retail stretch of the year, as they did each year through the entire decade.
For consumers, the convenience of delivery keeps improving. It's easier than ever to tap a few buttons and watch the items show up a day or two later. In the country's millennial-dominated urban centers, that convenience is magnified for the increasingly car-free masses.
For the owners and managers of those shoppers' apartment buildings, ballooning e-commerce means headaches that grow just as fast.
While new-construction buildings are devoting more space and resources to packages, older buildings are getting overwhelmed with the onslaught of boxes and bags, especially during major online shopping events.
"Our biggest surge in package deliveries this year was the Wednesday after Cyber Monday," said Draper and Kramer's Bill Van Senus, property manager of the 418-unit Grand Plaza Apartments on State Street in Downtown Chicago. "The building received about 900 packages on that day alone, with all of the two-day deliveries ordered on Cyber Monday arriving then."
Two years ago, the building received 300 packages, he said. The package déluge came just three days after the second-busiest day of the year: the Sunday after Black Friday. Lori Torres, the CEO of package managment company Parcel Pending, said the volume of packages handled by her company's lockers was up 88% year-over-year in 2019.
"It's gone through the roof," Van Senus said.
Overall e-commerce sales grew 18.8% during the 2019 holiday season compared to 2018, according to Mastercard. That year, online sales grew by 18.4% over 2017. E-commerce sales were 14.6% of total retail sales during the 2019 holidays, which the company defines as Nov. 1 to Dec. 24, a percentage that has been steadily growing over the years.
On Cyber Monday, shoppers spent a record $9.4B online, according to Adobe Analytics data, up 19.7% over 2018. Black Friday e-commerce sales also ballooned in 2019, rising to a total of $5.4B, up 22.3% year-over-year.
Because of the intense volume, when packages comes to Grand Plaza Apartments, they don't go to the management office or a locker system. They go to the dry cleaner on the first floor.
The dry cleaner has extra space to keep the items, Van Senus said, and the building has contracted with the owners of the business to help scan the packages in.
"It's old school, but many Chicago buildings still do it that way, for now," Van Senus said. “High-rises are going to have to hire a package person and have a package room. In the future, it will be someone’s job just to deal with packages."
One resident couple was out of town the week after Black Friday, Van Senus said, and did a lot of shopping from the road on Cyber Monday. Throughout the week, more than 20 packages of varying shapes and sizes arrived for them, so it fell to the Grand Plaza staff to organize them and have them waiting when the couple returned home.
Many newer properties are opting for lockers, included in the plans from day one. The 492-unit 727 West Madison tower in Chicago’s West Loop neighborhood uses a Luxer One locker system, which involves sending residents a text message or email alerting them that a package is in the access-code-protected locker, according to building General Manager Beth Argaman.
But during the holidays or any other surge period, it isn't enough for landlords to set a locker system and forget about it, even if the building is just a year old, like 727 West Madison, and designed for this era's onslaught of cardboard.
"During the holidays, the property management team increased their daily audits to three times a day, printing the list of packages delivered and cross-checking the Luxer lockers and overflow package room, which was set up to sort packages by apartment number," Argaman said.
"The building is equipped to handle packages," she added. "Older buildings have more difficulty. Storage is always a challenge."
Back in 2015, one major U.S. multifamily landlord, Camden Property Group, decided in the face of rising deliveries that packages couldn't be delivered at all to its management offices. Rather, they can be delivered to tenant doorsteps (without a signature) or tenants can pick them up elsewhere. The Houston-based REIT cited the expense of handling packages, which it said totaled about $3.3M per year, as a key consideration.
"Five years later, we still believe this is the best approach, particularly with the consistent increase in online ordering and the number of packages delivered to daily," Camden Executive Vice President of Operations Laurie Baker told Bisnow in an email. "We constantly evaluate our processes and our customers’ living experience and will adjust as necessary or if other solutions become available that make more sense."
Most other apartment owners still hold onto their tenants' packages, at least for now.
"Package delivery is one of the top-valued services of our residents," Bozzuto Management Co. Managing Director of Property Operations Nancy Goldsmith said in an email. Bozzuto owns or manages 255 communities nationwide, including properties in Washington, D.C., New York, Chicago, Boston and South Florida.
"Residents value the convenience," Goldsmith said. "They like the option of either a concierge handing them a package or retrieving it from a locker, and the convenience of text message or email alerts."
The company uses a number of locker systems, including Luxer, but also Amazon Hub and Package Concierge and Butterfly MX, she said. It uses Yardi RENTCafé CRM for resident messaging.
"We provided our residents with extended package pickup hours, assistance with large package delivery, increased messaging regarding holiday hours and package delivery on the holiday eves," Goldsmith said.
Sixty-seven percent of apartment landlords still hold packages at a management office or other room, though more than half of landlords also leave packages outside residents' doors — some landlords do both — according to National Multifamily Housing Council survey data.
About a third of the communities surveyed by the NMHC use package lockers of some kind, while about 10% use resident-accessible package rooms.
"There's no single strategy that's going to work for every apartment landlord," NMHC Vice President of Industry Technology Initiatives Rick Haughey said. "Landlords are still trying various solutions."
That isn't only because the volume of deliveries is up — so is the variety of deliveries.
"Tires are being purchased online more than ever before, because it's cheaper than at store," Haughey said. "Where do they usually end up? In leasing offices. Four tires, stacked up next to someone's desk until the resident can pick them up. No one would have imagined such a thing when most apartments were being developed."
Tires might not be arriving at most buildings, but perishable grocery deliveries are arriving more regularly, Haughey said. Higher-end properties can install refrigerated lockers, but that is hardly a solution for every building. Even regular lockers can be a stretch for old properties.
"Lockers take up space and represent an expense," Haughey said. "Other options might be better for some properties, such as a secure package room, or package tracking software."
Lockers aren't a new solution, but they still have room for growth.
Driving the growth in part is tenant demand, Parcel Pending's Torres said. Instead of luxury amenities used occasionally — resort-style pools, clubrooms or basketball courts — residents expect daily-use, integrated amenities, including systems (and not only lockers) that facilitate timely and safe package delivery, she said.
Now that the holidays are over and the packages delivered, a new challenge is coming: dealing with the empty boxes.
This has been such a challenge that RMK Management Corp. opted to engage an outside recycling provider to just pick up the cardboard and recycle it at its Halsted Flats property in Chicago’s Lakeview neighborhood.
"The company comes out as needed, which is typically two to three times a week, to pick up the empty boxes and recycle them. Sometimes, especially during the holidays, they may even come daily,” RMK Management Executive Vice President Diana Pittro said.
“The cost for this service is less than scheduling additional trash pickups to accommodate the overflow from the boxes. All residents have to do is leave their boxes in the hallway on specified days and they’re picked up and recycled,” Pittro said.
Grand Plaza is fortunate to have a large trash and recycling room on each floor, Van Senus said.
"People put boxes there, and a janitor comes through to empty them," he said. "During the holiday season, we were filling up two to three elevator cars a day with nothing but used boxes for recycling."
CORRECTION, JAN. 15, 12:15 P.M. ET: An earlier version of this story incorrectly attributed a comment to Beth Argaman. The story has been updated.