Royal Mail to introduce parcel lockers – finally

January 2, 2024

By Paul Chapman

Royal Mail is embarking on a strategy to keep pace with industry competitors like Amazon by introducing parcel lockers across the UK. Nick Landon, Chief Commercial Officer, revealed that the UK postal service is actively pursuing the installation of lockers.

The issue for Royal Mail is the ability to secure locations and to choose an optimum operating model. Given Royal Mail’s strategic agreement with the Post Office, an option could be to site parcel lockers either inside or outside existing post offices; as well as locating them inside or outside existing Royal Mail delivery offices. For Post Offices, this would have the benefit of additional footfall at a time when Post Offices are seeking additional sources of revenue. In the recent past, Royal Mail has introduced a form of a drop off locker, more akin to a large postbox than a parcel locker bank. It has around 1,500 of these on UK streets.

Parcel lockers are increasing across the UK for various reasons. There are benefits to the carrier, the location host and the consumer. Carriers are increasingly focusing on out of home delivery methods as a way to reduce final mile costs and improve overall delivery success rates. Out of home locations also act as a back up to a failed delivery.

Both lockers and parcel shops provide additional footfall and hence revenue for host locations, supporting their economics in a challenging retail environment. And for the consumer – convenience – it’s a better way for consumers to get their parcels if they are not at home often.

Compared to other countries around the world, the parcel locker is still a relatively new concept in the UK. The parcel locker is used a lot more in Scandinavian countries, Eastern Europe (especially Poland) and in China.

At our last count there were approximately 11,000-plus lockers and 42,000 parcel shops in the UK – so for every one locker there are four parcel shops. The main parcel locker networks in the UK are Amazon and Inpost (accounting for most of the 11,000 existing lockers), with some smaller companies looking to secure a foothold such as Lockars and Yeep.

Another interesting recent development is the announcement that Quadient will also be rolling out agnostic parcel lockers for any carrier to use. It has partnered with carriers DPD, Evri and DHL and just last week, it announced a partnership with MFG, an independent forecourt operator as a host.

It remains to be seen how quickly Royal Mail rolls out a parcel locker network and what operating model it follows, but it is playing catch up to Amazon and InPost.

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