The growth in contactless delivery due to the pandemic

Arik Levy, Luxer One CEO joins the Yahoo Finance Live to discuss Sacramento-based Luxer One which develops smart locker technology for retailers, schools, libraries, corporate environments and multifamily buildings and their announcement this week that it’s the first such company to reach 100M deliveries through its smart lockers.

Video Transcript

AKIKO FUJITA: Let's talk first about the growth that you have seen, because you were in this space even before any of this happens, in terms of the pandemic. How is the use case changed as a result of these health concerns that have popped up?

ARIK LEVY: Yeah, well, thanks for having me. It's very exciting to talk to you guys. As you know, we just hit 100 million deliveries of the package, the electronic package, locker space for the largest in that space. We deploy our lockers into apartment buildings, office buildings, large retailers. We work for municipalities, all types of different areas.

And so, you know, we've seen a real shift in our business as the pandemic has hit. One thing is, right out of the gate, package volume increased pretty significantly, almost to our Christmas levels. So we'll always see a pretty good spike during the Christmas season. And right in the March time frame when the pandemic hit, everybody moved to online ordering, everybody start working out of their house, and we saw that volume and obviously our locker utilization growth.

We also saw our buy online, pick up in store business where we deploy our lockers into large retailers, we saw significant growth there. And then we saw some of our market shift, for example, office buildings, which was a really booming market for us and one where the lockers were starting to take off. People were deploying these lockers into office buildings to handle packages, intercompany mail, et cetera. But it shifted to things like municipalities. We work with DMVs, and libraries, and all types of new spaces that are looking for solutions for contactless ways to get their items into their consumers' hands.

ZACK GUZMAN: And, Arik, obviously, there are Amazon Lockers out there, but much more retailers than just Amazon. So when you think about a growth year, I assume it would be concentrated in cities where populations are much more crowded. You would need something like this, makes it a little bit easier. What's the selling point maybe on alleviating the stresses on delivery platforms out there to make it a bit easier to meet the surging e-commerce demand?

ARIK LEVY: Yes, so, you know, a lot of our-- our deployments, about almost over 4,000 of our deployments, are in large apartment buildings. And so you can imagine those apartment buildings, if you look back four or five years ago, they received 5, 10, 20 packages a day. Now they are receiving 50, 100, 200 packages a day.

And so a lot of the demand for our products come from those buildings who are looking for a solution to alleviate handling all those packages in the leasing office. So, you know, things like Amazon Lockers. Amazon Lockers is a fantastic solution, but it's very Amazon focused. Our lockers are agnostic. So, in an apartment building, it can handle packages from any carrier.

We also deployed specific lockers for retailers. So take a Home Depot, for example, has lockers in over 1,000 of their stores. Those are deployed for buy online, pick up in store.

And so instead of a curbside solution or a package be shipped to your home, over 40% of packages that people are ordering online are actually picking up in the stores. So that when they come into the stores to pick up those packages, they pick them up from a locker. It's a very quick, very contactless, very easy transaction. That's been a real success for large retailers who are applying these.

AKIKO FUJITA: You know, the retail play, certainly, it's easy to see the growth on that front because you have, in fact, been able to ride that growth that we have seen in e-commerce. But you've also got partnerships in place with schools and libraries as well. How significant do you think that growth is going to be moving forward?

ARIK LEVY: Yeah, you know, that really wasn't an area that we were looking at or focusing on. And we had tremendous demand, really post-pandemic, or during the pandemic, in these areas. Take a library, for example, where students and kids need to get books, people are reading a lot, they're at home, but you can't come into the library. So we started getting calls from libraries out of blue not even realizing this opportunity has become a major, major growth area for us.

Same thing with municipalities and such as well. So those are really exciting growth area for us. And I think they're going to displace, in fact, even overcome, some of the loss we saw on some of the office side of things.

So, you know, people are demanding contactless delivery and the lockers are a fantastic solution for that. They're incredibly efficient. They're incredibly streamlined activity. And even using our mobile app, you can pop open the locker. So you don't even need to touch the screen to pick something up.

ZACK GUZMAN: Yeah, one report that caught my eye from CNR Research showed an uptick in American consumers reporting packages being stolen within the last year. 36%, seems high. A 1/3 of Americans saying that that's happened to them within the last year. How much of that is driving maybe some of the enthusiasm in the product you offer, as well?

ARIK LEVY: Yes. So, I mean, I mentioned them earlier, which was buy online, pick up in store. It was recently Best Buy, Home Depot, Lowe's, a lot of the major retailers are saying almost 40% of what people are buying online, they're actually going to the store to pick it up. And so a lot of the demand for that, even if you look at the Amazon Lockers, one of the major reasons for that is for inability for consumers to get packages securely delivered to their home.

So when the pandemic gets a little easier because people are actually at home, but even if you look at pre-pandemic and what's going to be post-pandemic when people go back into the office, there are a lot of US consumers. In fact, the numbers that I've seen are almost north of 40% of consumers don't have a secure way to get a package delivered to their home. And so lockers become that solution, both public lockers, like an Amazon Locker, or lockers that are going to a store, like a Home Depot or the UPS Store, or things like that, are going to become alternative pick up points for packages. And you know, that the package theft and the insecure way of getting packages delivered are fueling a lot of our growth and a lot of searching for alternative ways to get packages delivered.