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Unlocking the failed delivery problem? Opportunities and challenges for smart locks from a consumer perspective
Research in Transportation Economics xxx (xxxx) xxx
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Research in Transportation Economics journal homepage: http://www.elsevier.com/locate/retrec
Unlocking the failed delivery problem? Opportunities and challenges for smart locks from a consumer perspective Heleen Buldeo Rai *, Sara Verlinde, Cathy Macharis Vrije Universiteit Brussel, MOBI Research Centre, Pleinlaan 2, Brussels, Belgium
A R T I C L E I N F O
A B S T R A C T
JEL classification: R41 O33 Q55 Q56
The number of consumers that make online purchases is growing, together with the frequency in which these purchases are made. This change in consumer behaviour revitalised the practice of home delivery. Consumers prefer their homes in favour of alternative locations, despite the fair chance that they are not present at the time of delivery. The result is delivery failure, which creates unnecessary costs for logistics service providers and retailers, inconveniences for consumers and an additional burden to the environment. Smart lock systems are presented as a promising solution, as they enable access to delivery couriers by means of dedicated digital keys, even when no one is at home to receive the order. Smart locks’ technical feasibility has been demonstrated, yet consumer acceptance is the main obstacle in implementation. To this end, we organised six focus group discussions with 49 e-consumers. Findings suggest that consumers are reluctant to adopt smart lock systems, mainly because of security concerns. Suggested solutions to alleviate the obstacles include improving courier information, limiting courier access and enhancing professional support. The research contributes to the theoretical knowledge pool of efficiency-improving parcel delivery de velopments and provides insight into consumer acceptance of a delivery innovation that has the potential to reduce costs and increase efficiency, sustainability and receiver satisfaction.
Keywords: Online retail Smart locks Sustainability
1. Introduction In Belgium, approximately 200.000 parcels are delivered to con sumers on a daily basis (De Roo, 2018). During peak periods, such as the end-of-year holiday season, online sales even double (Allen et al., 2017b). Evidently, growing as well are the number of online shoppers and the frequency in which these online purchases are made (Comeos, 2018). Hence, organising these deliveries in an efficient way is essential, from a cost perspective as well as from an environmental perspective. Accordingly, logistics service providers invest in all kinds of alternatives, mainly alternative delivery locations including attended collection points (following a “shop-in-shop” concept) and unattended collection points (i.e. automated locker banks) (Weltevreden, 2008). Such alter native locations are more efficient as compared to home delivery, because they enable consolidation of parcels and efficient routing schedules (Wang, Zhan, Ruan, & Zhang, 2014). Most importantly, collection points and lockers avoid the problem of home delivery failure (Visser, Nemoto, & Browne, 2014). Regardless, consumers prefer to receive their parcels at home (Buldeo Rai, Verlinde, & Macharis, 2018).
In an attempt to reduce failed delivery rates, parcel service providers allow consumers to select a (narrow) delivery timeframe on weekdays that fits their schedule, reroute their parcels to another location or receive their parcels in the evenings, on Saturdays or on Sundays, when it is more likely that they are at home (Van Duin, De Goffau, Wiegmans, Tavasszy, & Saes, 2016). While such developments are successful in improving delivery success rates, they have a negative effect on parcel consolidation and routing efficiency (Boyer, Prud’homme, & Chung, 2009). Therefore, another innovation has caught attention in the businessto-consumer delivery market: smart locks. Smart locks are keyless electronic door locks that are operated through consumers’ smartphones and allow third parties to unlock a private delivery location with a unique, one-time-use digital key that is send via text messages or mobile applications (Reyes, Savelsbergh, & Toriello, 2017). So far, smart locks have been tested to access houses and car trunks for delivering all kinds of goods, including groceries. Tests by retailers Walmart and Amazon in the US (Jones, 2017; La Monica, 2017) and ICA in Sweden (Davidson, 2016) demonstrate its technical feasibility. In addition, logistics service
* Corresponding author. E-mail addresses: [email protected] (H. Buldeo Rai), [email protected] (S. Verlinde), [email protected] (C. Macharis). https://doi.org/10.1016/j.retrec.2019.100753 Received 12 December 2018; Received in revised form 16 June 2019; Accepted 23 September 2019 0739-8859/© 2019 Elsevier Ltd. All rights reserved.
Please cite this article as: Heleen Buldeo Rai, Research in Transportation Economics, https://doi.org/10.1016/j.retrec.2019.100753
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According to Visser et al. (2014), 12% of failed orders are redirected to be offered again the next day, a process that can be repeated up to four times (Van Duin et al., 2016). Yet, research suggests that 50% of these redeliveries fail again the second time (Buldeo Rai et al., 2019; McLeod et al., 2006). Delivery failure has negative effects on all stakeholders that are part of the last mile delivery process, i.e. logistics service providers, retailers, consumers and society as a whole. For logistics service providers and retailers, delivery failure is associated with costs. According to IMRG (2016), these costs add up to between £1,90 and £3,40 per failure. This range is based on information from five logistics service providers and includes reprocessing, communication and redelivery costs. In the increasingly competitive, cost-sensitive and customer-focused distribu tion sector, such costs are an additional burden (McLeod et al., 2006). Moreover, a survey by Conlumino for Barclays (2014) indicates that 64% of retailers in the UK mention consumers being absent during de livery as a critical concern. Delivery failure is caused by the mismatch between consumers’ lifestyles and working patterns on the one hand, and standard delivery times on the other hand (Song, Cherrett, McLeod, & Guan, 2009). Moreover, logistics service providers are often unclear about the approximate time in which the delivery will take place. This hinders consumers to organise for delivery reception and creates inconveniences (Allen, Thorne, & Browne, 2007; Buldeo Rai et al., 2019). What’s more, a survey in the UK showed that 8% of consumers ceased to shop online because of this lacking information. Ultimately, also society as a whole is negatively impacted by delivery failure, due to the additional vehicle-kilometres and associated externalities. Considerable benefits are envisioned for all stakeholders if the last mile challenge of online transactions could be optimised and improved (McLeod et al., 2006). Alternatives to home delivery are presented in the “good practice guide on urban freight transport”. These alternatives include reception boxes, delivery boxes, collection points, lockers and controlled access systems (Allen et al., 2007). While reception and delivery boxes (i.e. either fixed or temporarily attached personal lockers to consumers’ homes) pose challenges in terms of business model (Wang et al., 2014), collection points and lockers require consumers to pick up their order in a location nearby. Generally, consumers are not willing to finance such € l€ €m, 2001), nor are they innovative boxes (Punakivi, Yrjo a, & Holmstro happy to travel for their orders (Edwards, McKinnon, Cherrett, McLeod, & Song, 2010). What’s more, collection trips are often carried out dedicatedly by car, thus reducing collection points’ environmental po tential (Buldeo Rai, Mommens, Verlinde, & Macharis, 2019). Ultimately, controlled access systems (i.e. smart locks) remain a promising option, which provide couriers with a means of gaining access to a locked area to leave the goods in. Recently, retailers and logistics service providers have experimented with smart locks as a way to gain access for parcel delivery, in car trunks and homes. Yet, the major challenge is consumers’ concern. Research into consumers’ understanding, acceptance and use of new technologies has led to the creation of diffusion of innovation theory and attitude the ories such as theory of reasoned action, theory of planned behaviour and technology acceptance model (Wang, Yuen, Wong, & Teo, 2018b). Such theories and models are designed to measure the degree of acceptance and satisfaction from different points of view, depending on the con structs or determinants which represent their structure (Momani & Jamous, 2017). Only a few studies deal with technological solutions that aim to alleviate the last mile problem and the consumer perspective simultaneously. However, such research represents a major knowledge gap in literature and is called for (Vakulenko, Shams, Hellstr€ om, & Hjort, 2019; Wang et al., 2018b, 2018a). Different from service in novations applied to upstream supply chains in intra-organisational and inter-organisational contexts, the last mile is a consumer-oriented business with a strong behavioural component (Collins, 2015). Con sumers increasingly have the power to dictate how the last mile needs to be organised (Wang et al., 2018b) and their perspective is crucial to the
providers have successfully tested smart lock solutions in Belgium and judge the technology to be ready for implementation (Buldeo Rai, Ver linde, & Macharis, 2019). Yet, these tests also point out the main obstacle in smart lock implementation, which is consumer acceptance. According to King and He (2006), identifying factors that cause people to accept and make use of systems developed and implemented by others is a continuing issue. Following a news article on the topic, CNN correspondent Paul R. La Monica launched a poll on the social media platform Twitter, to which 271 users responded to the question if they would sign up for Walmart’s in-fridge delivery service: 21% voted yes, 65% voted no and 14% was unsure (La Monica, 2017). Hardly any research has been done on this promising but challenging home delivery innovation. Therefore, the objective of this research is to find out if consumers are ready to use smart lock systems for delivering online ordered goods, and under which conditions. To this end, we organised six focus group interviews with online consumers from March to April 2018. The remainder of this paper provides a literature over view in section two and a description of the methodological approach in section three. Section four presents our research results, which are dis cussed in section five. The final section ends with conclusions. 2. Literature Every year, the number of consumers ordering online products and services grows, together with the frequency in which these purchases are made (E-commerce Europe, 2015). This change in consumer behaviour revitalised the practice of home deliveries. Generally, consumers prefer their homes to receive online orders in favour of alternative delivery locations that are available, such as collection points and lockers (Bul deo Rai et al., 2018). Although home deliveries do not necessarily imply a heavier environmental burden compared to individual trips to stores, currently the last mile to the home is associated with several challenges that hinder its efficiency (Mangiaracina, Marchet, Perotti, & Tumino, 2015). These challenges include order fragmentation on the consumer side, short delivery terms and a maladjusted built environment. Another major issue is delivery failure due to consumers being absent to receive their parcel (McLeod, Cherrett, & Song, 2006), the so-called “not-a t-home-problem” (Deutsch & Golany, 2018). Figures on the share of deliveries that fail are inconsistent, with variations between 2% and 60% depending on the source. GLS, DPD and DHL, major logistics ser vice providers in the business-to-consumer parcel market, report failure rates between 15% and 50% depending on the area (Norman, 2015). In Belgium, the Belgian postal organisation and largest parcel service provider, reports a failure rate of 14% (Gijsbrechts, 2017). Table 1 gives an overview of percentages found in literature. Differences in failure rates among logistics service providers depend largely on the policies that they apply in case of receiver absence. In general, orders that could not be delivered to the appropriate address are dropped off at consumers’ neighbours or a collection point in their area. The delivery is considered successful when neighbours accept the order, but considered a failure when redelivered to a collection point. Table 1 Overview of delivery failure percentages from literature. Author(s)
Year
Country
Delivery failure percentage
Fernie and Sparks Retail Logistics Task Force McLeod et al. Edwards, McKinnon and Cullinane Okholm et al. IMRG Van Duin et al.
1999 2001 2006 2009
UK UK UK UK
30% 60% 25% 2%–30%
2013 2014 2016
3%–50% 13%–14% 25%
Goodchild and Ivanov Gijsbrechts
2017 2017
EU UK The Netherlands US Belgium
10%–15% 14%
2
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success of any innovation related to it (Wang, Yuen, Wong, & Teo, 2018a). Thus, a thorough understanding of consumers’ perceptions and behavioural responses towards the service innovations is imperative in providing services that fulfil consumers’ last mile needs (Wang et al., 2018b). Studies that do consider technological last mile solutions from the consumer point of view, investigate unattended home delivery models by means of secured boxes (Goethals, Leclercq-Vandelannoitte, & Tütüncü, 2012) and delivery by drones (Mittendorf, Franzmann, & Ostermann, 2017; Yoo, Yu, & Jung, 2018). Yet most research is dedi cated to lockers (Chen, Yu, Yang, & Wei, 2018; Vakulenko et al., 2019, 2018a; Wang et al., 2018b, 2018a; Xiao, Wang, & Liu, 2018; Yuen, Wang, Ma, & Wong, 2019, 2018; Zhang & Tong, 2017). These studies build on surveys anchored in innovation diffusion theory (Wang et al., 2018b, 2018a; Yoo et al., 2018; Yuen, Wang, Ng, & Wong, 2018), technology acceptance model (Yoo et al., 2018; Zhang & Tong, 2017), resource matching theory (Chen et al., 2018; Yuen et al., 2019) and €m, & Hjort, 2018a; 2018b), customer value theory (Vakulenko, Hellstro among others. Major findings from these studies point to the importance of consumers’ attitudes, perceptions and beliefs in determining will ingness and likelihood to adopt technological innovations (Mittendorf et al., 2017; Wang et al., 2018a, 2018b; Yuen et al., 2018). In this regard, Chen et al. (2018) found innovativeness and optimism among the most influential variables in consumers’ intended usage of lockers. In turn, less decisive are characteristics of the technological innovation itself (Wang et al., 2018b; 2018a) and consumers’ socio-demographic vari ables (Goethals et al., 2012; Yuen et al., 2018). Accordingly, the limited amount of research that has so far been dedicated to smart locks and the need for consumer perspectives in last mile research, advocates for an exploratory research approach. Quali tative data can help understand and explain the reasons behind certain attitudes and behaviours (Lauri, 2019). Therefore, the purpose of this research is to explore if consumers are ready to use smart lock systems for delivering online ordered goods and under which conditions, by means of qualitative focus group interviews.
profession, average number of online orders and average percentage of failed deliveries at home. Building further on this information, we classified our respondents according to their online purchase behaviour, in so-called “heavy buyers” and “light buyers”. We based this distinction on the global “E-shopper Barometer Report” from DPD Group (2017), that defines the average number of purchases for three types of buyers (small, medium and large) and 21 countries. In Belgium, the average number of annual online purchases is 13 (as opposed to 24 in the UK as highest average and 7 in Czech Republic and Estonia as lowest average): small and medium buyers make less than 7,4 purchases per year while heavy buyers purchase more. In our sample of respondents, 29 respondents are male (59,2%) and 20 respondents female (40,8%), which indicates a moderate over representation of men. The respondents are aged between 17 and 63, with an average of 25 years old. The difference is however large in the light buyers group (aged between 17 and 63, average of 29), but small in the heavy buyers group (aged between 18 and 24, average of 21). This is because younger consumers are found to be more internet-savvy and more active online shoppers (Wang et al., 2018a). However, it was challenging to attract older participants in general, which is a common issue in this type of research (see for example Wang et al. (2018a)) and a limitation in our study. Heavy buyers in our sample placed on average 2, 9 online orders per month (lowest number of monthly purchases was 1 and the highest number of monthly purchases was 10), while the light buyers used the internet to buy on average 2,6 products per year (lowest number of annual purchases was 0 and highest number of annual pur chases was 4). Table 2 provides an overview of our respondents. Interview questions and data collection process were designed ac cording to the guidelines suggested by Krueger (1998) and outlined in Table 3. The data collection process included presentation of the research and moderator to the respondents and a recording that was subject to respondents’ agreement and notification of anonymity. Five types of open-ended questions were used to guide the group discussions regarding the use of smart locks for parcel delivery. First, opening questions discussed online purchase behaviour, delivery preferences and
3. Methodology
Table 2 Focus group respondents.
Motivated by the novel research subject and the exploratory research question, we selected a qualitative research strategy. From March to April 2018, we organised six focus groups with 49 Dutch-speaking econsumers in Belgium. A focus group is a way of collecting data which involves engaging a small group of respondents in group discussions focused on a particular topic or set of issues (Lauri, 2019). The size of the groups (i.e. six to ten respondents per group) was established to achieve a good balance between respondent involvement and breadth of re sponses (Morgan & Krueger, 1993). During a focus group, researchers facilitate a discussion to elicit views and lay theories about the research topic (Lauri, 2019). As a methodological approach, focus groups are considered suitable because they look for information to understand a particular phenomenon or behaviour and the reasons why these occur (Lauri, 2019), while also creating synergies during focus group in teractions. In doing so, focus groups provide a means of investigating complex behaviours and motivations (Morgan & Krueger, 1993), as opposed to surveys that are ideal to accurately describe the individual characteristics of a large population (Lauri, 2019). Respondents were recruited via emails sent to students at a univer sity in the capital of Belgium (i.e. Brussels), as well as sent via students to their circle of acquaintances, friends and relatives. In the invitation enclosed in the email, we explained the aim of the focus groups (“To find out consumers’ attitude towards possible alternatives to standard home de livery of online orders.“), their role in these focus groups (“To share their opinion in open group discussions.“) and a number of locations and dates on which the focus groups would be organised. Respondents were selected based on their intention to participate and a fact sheet that they filled in prior to the focus group, covering respondents’ age, sex,
Heavy buyers Sex
Age
Light buyers Average number of parcels per month
Focus group 1: 20/03/2018 Female 22 3 Male 24 1 Male 21 5 Female 20 2 Female 22 7 Female 18 2 Male 21 4 Male 21 2 Male 19 3 Focus group 2: 22/03/2018 Male 20 1 Male 21 1 Female 22 8 Female 21 1 Female 20 1 Male 20 1 Focus group 3: 29/03/2018 Female 21 2 Male 20 1 Female 21 5 Male 21 2 Female 19 2 Female 20 1 Male 21 4 Female 20 2 Female 22 10 Female 20 2
3
Sex
Age
Average number of parcels per year
Focus group 1: 25/03/2018 Male 18 2 Male 23 3 Male 63 1 Female 53 3 Female 22 2 Female 49 4 Male 51 4 Female 51 4 Male 59 2 Focus group 2: 29/03/2018 Male 20 4 Male 21 3 Male 22 2 Female 20 4 Male 20 1 Male 20 2 Focus group 3: 10/04/2018 Male 20 3 Male 22 3 Male 20 4 Male 21 0 Male 22 3 Male 21 2 Male 21 2 Female 17 3 Male 19 2
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once the data had reached saturation, after which they were transcribed and uploaded in a computer-assisted qualitative data analysis software, Nvivo.2 We used Nvivo to structure, categorise and analyse the data in a thematic way. Thematic analysis is a method for identifying, analysing and reporting patterns within data (Lauri, 2019). To this end, we iden tified and labelled relevant features of the data in codes and clustered these codes into themes to create patterns and find connections between responses (Miles & Huberman, 1994). Throughout the process, we reviewed codes and themes to check the fit between the coded data and the entire data set (Lauri, 2019). The research objective guided the systematic process and entailed to identify if and under which condi tions consumers are ready to use the smart lock system for delivery of online purchases, while accounting for potential differences between the two groups of buyers.
Table 3 Focus group outline. Introduction of the research and moderator. Informing of respondents about anonymity and recording. Introduction by respondents to the group. Questions: 1) Opening questions: � How frequent do you make an online purchase? Which type of product? Which retailer? � Which delivery method do you use? Why? � What are the main advantages and disadvantages of online purchasing? 2) Introductory questions � What is your view on current delivery methods? � What influences your choice for a delivery method? 3) Transition questions � How important are deliveries? What are your expectations? � How could deliveries be improved (in terms of sustainability)? � How often do you experience delivery failure? What do you think of delivery failure? � How could delivery failure be solved? � How can consumers, retailers, couriers solve delivery failure? 4) Key questions � Would you use smart locks for in-house delivery? Why (not)? � Would you use smart locks for in-car delivery? Why (not)? � How do you feel about smart locks? � How do you perceive smart locks? � Do you perceive smart locks as useful? Why (not)? � Do you perceive smart locks as easy? Why (not)? � What are advantages and disadvantages of smart locks? � What is your willingness to pay for smart locks? 5) End questions � What do you think about the future of online purchasing and deliveries? � What are opportunities and threats for online purchasing and deliveries? � Which initiatives would you like to see in the future concerning online purchasing and deliveries? � Summary of main points. � Conclusion of group discussion. � Debriefing and thanking of respondents. � � � �
4. Findings This section covers the results from the group discussions in three main themes: delivery preferences in terms of location, experiences with failed deliveries and respondents’ perception about smart locks as a solution for delivery failure. Although we expected the two groups of respondents (i.e. heavy buyers and light buyers) to differ in terms of preferences, experiences and perception, our analysis showed generally similar results for both groups. Accordingly, distinct differences between groups are only discussed when observed. 4.1. Delivery preferences Overall, respondents prefer to receive their online orders at an address of choice, i.e. home or alternatively at work. What’s more, home delivery is considered to be an inherent part of the online shopping experience. Some respondents are unfamiliar with alternative delivery locations (i.e. collection points and lockers), and few expressed an explicit preference for these alternatives. Collection points are largely considered cumbersome (because of limited opening hours) and timeconsuming (because of the collection trips that are required), while re spondents’ knowledge about lockers lacks. This is exemplified by questions on pricing (“Are lockers also free of charge?“), safety (“Aren’t lockers easily forced open?“) and use (“What if there are multiple parcels in the locker and you take someone else’s?“). In general, respondents consider alternative delivery locations only of interest when located on itineraries that they regularly traverse (e.g. on school/work commute).
online purchase experiences (i.e. as opposed to traditional retailing). Second, introductory questions covered various delivery locations in depth (e.g. home, collection point, locker, reception box and delivery box) by using stimulus materials illustrating the different available op tions. Third, transition questions addressed home delivery failure, i.e. experiences with such failures, possible solutions for it and how various stakeholders can pay a role. Fourth, key questions were asked about smart locks. Here, stimulus materials in the shape of videos1 were introduced to demonstrate the use of smart locks for delivery in car trunks and homes. Questions probed for respondents’ attitude and feelings towards smart locks, perceived usefulness and ease of use, and their use intention. These questions were based on the technology acceptance model, that was introduced by Davis (1989) to explain po tential users’ behavioural intention to adopt a specific technological innovation. “Perceived usefulness” and “perceived ease of use” are found to be fundamental determinants of user acceptance (Davis, 1989). Although four major modifications have been applied to the core of the model (adding prior factors, contextual factors, consequence measures and factors suggested by other theories), a more recent meta-analysis of 88 published studies confirmed the validity and robustness of the model and its potential for wider applicability (King & He, 2006). However, the constructs defined within the technology acceptance model are often used within empirical studies that involve direct statistical testing. Contrary, in this study technology acceptance model constructs were used to inspire the development of interview questions in a qualitative research context. Finally, end questions asked for additional and closing com ments and respondents’ view on online purchasing in the future. All interviews lasted about 1 h. The moderator ended the interviews
4.2. Delivery failure experiences Despite respondents’ preference for home delivery, they do experi ence inconvenience and frustration due to delivery failures. These feelings are however stronger among respondents that are considered heavy online shoppers, as opposed to respondents that barely shop on line. Delivery failure rates largely differ among respondents. While one respondent indicates to miss about 75% of his orders, others estimate a percentage around ten. Respondents raise several measures that they undertake to avoid delivery failures, e.g. group chats with familymembers to verify who will be home to receive the order and tele working on the day of delivery. Some respondents are fine to collect their parcels at their neighbours, while others present so-called “safe places” as a good solution in case of absence (e.g. in the garden, behind the parked car). However, these solutions are highly context-specific and depend on e.g. residence type, neighbourhood type and relationship with neighbours. Respondents also suggest measures that businesses can implement to increase first time delivery rates. These suggestions can be largely
1 The videos can be found via https://www.youtube.com/watch?v¼wn 7DBdaUNLA and https://www.youtube.com/watch?v¼WZUDHytwt3s.
2 Information on the software package can be found via http://www.qsrint ernational.com/nvivo/nvivo-products.
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divided in two: delivery information and delivery time. Regarding de livery information, respondents indicate to require more accurate in formation on the delivery, e.g. by receiving an estimated arrival time or by being able to follow the delivery route in real-time. To respondents, such information should be part of the standard home delivery service. Regarding delivery time, respondents suggest to broaden this towards moments when they are more inclined to be home, e.g. on evenings or weekends. Several respondents also point out their frustration with couriers that fail to wait long enough at the doorstep to allow them to receive the parcel. Some respondents suggest reception boxes as a qualified solution to reduce delivery failure. The concept is similar to traditional letterboxes, although reception boxes are larger and secured, to accommodate parcel deliveries. This innovative solution has already been proposed several years ago (Punakivi & Tanskanen, 2002), but its adoption has remained small-scale. Accordingly, respondents also raise several issues that are associated with reception boxes, including the business model behind it (i.e. who pays, which price), practical feasibility (e.g. installation loca tion in urban areas or for apartments, security) and (lack of) aesthetic quality.
five people enter your house and you cannot get there in time?” Moreover, one respondent raised the matter of social control, in which neighbours keep an eye out in their neighbourhood. This attention potentially di minishes with large-scale implementation of smart lock systems, that enable anyone to enter a house at any time. Respondents make several suggestions to reduce risk and improve adoption rate of smart locks. First, enhancing courier information, which can be done by review and rating systems, as common within Uber and other applications that are part of the platform-economy (Dablanc et al., 2017). Most respondents however agree that this in formation is not sufficient and express the need to actually know the courier that enters their property. In respondents’ view, a system similar to the local postal distribution should be in place, where one person consistently distributes mail in the same neighbourhood. Second suggestion to improve smart lock adoption implies to limit the access zones. By means of sensors, couriers’ access could be restricted to a specific part of the house, e.g. the hallway, parking garage or garden house. Another suggestion is to limit the door opening width, sufficient to enable parcel drop-off only. Third suggestion by respondents concerns to introduce professional support to the smart lock system. A solid insurance issued by a trusted, specialised party is perceived as a basic requirement. Other respondents raise questions on the fact that retailers sell and install smart locks. They consider security firms as more suitable and trustworthy parties for this purpose. What is clear from the group discussions is that hardly any respon dent identifies as early adopter of the smart lock system because of the perceived risks. Most indicate a readiness to introduce smart locks when family and friends, or “most people”, have adopted it with success. As one respondent formulates it: “First I want to know if others find the system successful and reliable, then I would consider it”. At the moment, support for smart locks among consumers seems limited. Next to addressing the concerns and potential solutions raised by respondents, we consider two opportunities for the future: online retail growth including e-groceries and its associated product returns. Although online penetration for grocery products is still low (Comeos, 2018), a considerable increase is expected in the future, when digital natives will be adults responsible for family purchase decisions (Nielsen, 2015). A study by Nielsen (2015) states that one quarter of online re spondents orders grocery products online, and more than half are willing to do so in the future. Groceries are sensitive products, therefore less fit for delivery in collection points and lockers. Given the possibility of smart locks for so-called “in-fridge deliveries”, we join assumptions made by Allen, Piecyk, and Piotrowska (2017a,b), that smart locks’ largest potential could be for delivering online groceries. Next to this, the focus groups identified returning products as most frustrating part of the online purchasing process, inducing some re spondents to keep unwanted products or shop only at retailers with the most convenient return process. Given rising parcel volumes and asso ciated returns, smart locks could enable pick-ups of product returns, preferably combined with delivery drop-offs. In sum, an increase in online order volume and frequency supports the smart lock system, both in terms of need and relevance.
4.3. Smart locks’ potential Overall, respondents express interest in the smart lock concept, which they perceive as useful for several purposes, including delivery of online ordered products and groceries. Other purposes, which some respondents find more relevant than actual delivery, is the ability to open the door for visits by friends or family and for cleaning services. For parcel delivery, investing in smart locks is only interesting when applicable for all orders, i.e. not only for Amazon products as presented in the demonstrative video that was displayed during the group dis cussions. On a related note, Amazon’s retail platform is known among Dutch-speaking consumers in Belgium but adoption is largely restricted to the French-speaking population, who orders from Amazon.fr (Ecommerce Europe, 2018). Respondents’ willingness to pay for a smart lock system is directly related to these additional functions and pur poses. Remarkably, both heavy and light buyers feel like they make an insufficient amount of orders to justify smart lock installation. Perception of smart locks’ ease of use among respondents is largely subjected to practical questions. For smart locks at homes, many re spondents worry about the combination with home security systems and the possibility of escaping pets. Smart locks at cars are expected to pose traceability problems for couriers, e.g. in case of large parking areas or underground parking areas that hinder geolocation software needed to locate the car. Respondents express concerns as well about what hap pens with their in-transit delivery if they unexpectedly need to use their car. There is no clear-cut preference for either one of the two smart lock applications (i.e. in-home and in-car) among the heavy buyers, while most light buyers appreciate in-home delivery. Most respondents are inclined to use smart locks at some point in time, given specific condi tions. Yet for both applications, the perceived risk of smart locks is (too) high. Respondents raise two security issues: hacking and theft. Hacking of the smart lock system is an issue that virtually all respondents expressed their concerns about. Yet, even if the smart lock system is solid, respondents refer to risks associated with “the human factor”, i.e. theft. Respondents fear theft by couriers when entering their property, and the fact that couriers can provide information to others. Not only about their valuables, but also about the location of in-house cameras or details about the security system in place. As one respondent puts it: “It’s a job for thieves: they earn money as courier, while at the same time searching for houses where they can find more”. In addition, cameras that are part of the smart lock system generate little trust. First, there is the legal matter of using the recorded images in case of actual theft and second, such images still provide few possibilities for action. “Many people will say: “I’m good as long as I can see the camera images”, but what will you do when
5. Discussion The findings outlined in this research provide insight into con sumers’ attitude towards controlled access systems or smart locks, which present a promising solution to eliminate delivery failure and alleviate part of the last mile challenge. This challenge threatens efficiency and performance of logistics service providers and retailers in the businessto-consumer parcel market, while also creating an additional environ mental burden to society (Boyer et al., 2009). The technical feasibility of smart lock systems has been demonstrated in several parts of the world that have adopted online retail models to a large extent, including the US, Sweden and Belgium (Buldeo Rai et al., 2019; Davidson, 2016; 5
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area on which we focused our study (i.e. Brussels, Belgium). In the future, smart lock research would benefit from further and wider investigation in other geographical areas in which adoption of online retail channels is high. Moreover, the focus groups that we organised were rather limited in sample size and did not accurately represent all relevant age groups. Future smart lock research can built upon our exploratory research findings. Promising next steps include, first, iden tification of most relevant consumer profiles. For example, studies dedicated to new vehicle technologies showed income, sex, residential environment and technology-savviness to be competent indicators for interest and adoption (Bansal, Kockelman, & Singh, 2016). Second, investigation of actions to relieve consumers’ main concerns, as Chen et al. (2018) and Yuen et al. (2018) did to encourage locker-adoption. Third, development of user-experiments to challenge consumers’ cur rent resistance after actual usage. For autonomous vehicles, to which consumers’ perceived risk is high as well, such experience proved to have a positive effect on acceptance (Feys & Vanhaverbeke, 2019).
Jones, 2017; La Monica, 2017). Yet, the key obstacle in smart lock implementation remains consumer acceptance. Accordingly, the find ings of this research contribute to the scientific body of literature on online retail’s last mile, while also providing several societal and managerial implications. This study contributes to scientific research on the last mile and online retail logistics in two ways. First, we advance knowledge on smart lock systems as an alternative to attended home delivery. Although the scientific community has developed an extensive and diverse body of literature on home delivery and home delivery alternatives (see e.g. Lim, Jin, and Srai (2018) and Hübner, Kuhn, and Wollenburg (2016) for overview), to date few studies are dedicated to smart lock systems. Possibly, this lack of attention can be explained by the second gap to which this research responds: the consumer perspective deficiency in last mile research. As the main obstacle to smart lock implementation is consumer acceptance and the related stream of research generally dis regards consumers as key stakeholder, this lack of studies investigating smart locks is an unsurprising result. The importance of including con sumers’ perspectives in last mile research has been raised by several authors (Vakulenko et al., 2019; Wang et al., 2018b, 2018a). The find ings of our research point out that consumers perceive smart locks as useful and easy to use, despite some practical issues (e.g. integration with home security systems, possibility of escaping pets). Such smart locks should be multi-purpose, as both heavy and light buyers judge their amount of online orders insufficient to justify smart lock installa tion for deliveries only. Yet, we also demonstrate that perceived risk for hacking and theft currently hinders consumers’ intention for (early) smart lock adoption. These perceptions live strongly among consumers, both heavy and lights users of online retail models, and are challenging to neutralise – even if a system works near perfection. In this way, our findings confirm the importance of the consumer perspective in last mile research and demonstrate consumers’ attitude towards smart locks systems specifically. In general terms, it contributes to the theoretical knowledge pool of efficiency-improving parcel delivery developments. Building further on these findings, the research provides managerial contributions as well. While it confirms that businesses working with smart lock systems have an important challenge to tackle when it comes to consumer acceptance, our findings also point out (part of) the solu tion. Such solutions include improving courier information, limiting courier access and enhancing professional support. We also introduce specific contexts that provide an opportunity for smart lock imple mentation, i.e. grocery deliveries and order returns. Such findings result from the exploratory and qualitative research approach that has been adopted in this research, which enabled to extract consumers’ perceived risk as well as initiatives that have the potential to reduce it. In this way, we provide practical insights to support sustainable implementation of smart lock systems in the future. Moreover, in line with suggestions made by Chen et al. (2018) and Yuen et al. (2018) for supporting con sumers adoption of lockers, logistics service providers and retailers experimenting with smart locks are advised to educate, communicate and market the benefits that smart locks provide, i.e. reduced environ mental impact, improved flexibility and convenience, building on word-of-mouth marketing through experienced users. From a societal point of view, every solution that is successful in reducing delivery failure and ultimately enhancing transport efficiency is considered of key importance. With delivery failures rates balancing between 2% and 60%, growing use of online retail channels and con sumers’ explicit preference for receiving these orders at home, solutions that enable unattended home delivery are crucial. The smart lock is a promising initiative, although it brings along significant challenges at the consumers’ side. Our research identifies the main challenges and points out potential solutions. In this way, it contributes to reducing the environmental impact that online retail’s last mile imposes on our society. Concluding this research, several limitations of our study deserve further reflection. These limitations include the specific geographical
6. Conclusion The number of online shoppers and the frequency in which these shoppers make purchases, is growing. Overall, consumers’ preference goes out to delivery at home, despite the chance that they will not be there to receive their orders. Such delivery failures cause unnecessary costs for logistics service providers that carry out these deliveries, while also creating an additional environmental burden. Hence, there is a need to optimise the delivery process. To this end, smart locks are presented as a competent solution. Smart locks enable couriers to access con sumers’ car trunks and homes with a dedicated, one-time-use digital key, to drop off parcels in case of receiver absence. Although the tech nical feasibility of smart locks has been demonstrated, the main obstacle in smart lock implementation is consumer acceptance. To identify op portunities and challenges for smart lock implementation from a con sumer point of view, we organised six focus group discussions with 49 online consumers, that we divided in “heavy buyers” and “light buyers” according to their online purchase frequency. The results of these focus groups indicate that while consumers experience inconvenience and frustration from delivery failure, delivery at home remains their preferred location. Smart locks are considered useful when applicable for other purposes as well, e.g. opening the door for visits and cleaning services. Two main obstacles to implementation are risk for hacking and theft. Suggested solutions to alleviate these obstacles include improving courier information, limiting courier access and enhancing professional support. Nevertheless, consumers are hesitant to become early adopters of the smart lock system. Next to addressing consumers’ concerns with competent solutions, two opportunities are expected to stimulate largescale adoption of smart locks in the future: online retail growth (including groceries) and its associated product returns. The research contributes to the theoretical knowledge pool of efficiency-improving parcel delivery developments. Moreover, for logistics service providers on the business-to-consumer market, the research results provide insight into consumer acceptance of delivery innovations that have the poten tial to reduce costs and increase efficiency and receiver satisfaction. Acknowledgements This work is supported by the Innoviris Anticipate programme: prospective research for Brussels-Capital Region. The authors would like to thank Alexis Close, Jasper De Bondt, Michiel De Decker, Gerben Fiesack, Sander Geerkens, Jens Jacob, Axel Peeters and Kobe Vaes for their much appreciated efforts in collecting the data. References Allen, J., Piecyk, M., & Piotrowska, M. (2017). An analysis of online shopping and home delivery in the UK. London.
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Research in Transportation Economics journal homepage: http://www.elsevier.com/locate/retrec
Unlocking the failed delivery problem? Opportunities and challenges for smart locks from a consumer perspective Heleen Buldeo Rai *, Sara Verlinde, Cathy Macharis Vrije Universiteit Brussel, MOBI Research Centre, Pleinlaan 2, Brussels, Belgium
A R T I C L E I N F O
A B S T R A C T
JEL classification: R41 O33 Q55 Q56
The number of consumers that make online purchases is growing, together with the frequency in which these purchases are made. This change in consumer behaviour revitalised the practice of home delivery. Consumers prefer their homes in favour of alternative locations, despite the fair chance that they are not present at the time of delivery. The result is delivery failure, which creates unnecessary costs for logistics service providers and retailers, inconveniences for consumers and an additional burden to the environment. Smart lock systems are presented as a promising solution, as they enable access to delivery couriers by means of dedicated digital keys, even when no one is at home to receive the order. Smart locks’ technical feasibility has been demonstrated, yet consumer acceptance is the main obstacle in implementation. To this end, we organised six focus group discussions with 49 e-consumers. Findings suggest that consumers are reluctant to adopt smart lock systems, mainly because of security concerns. Suggested solutions to alleviate the obstacles include improving courier information, limiting courier access and enhancing professional support. The research contributes to the theoretical knowledge pool of efficiency-improving parcel delivery de velopments and provides insight into consumer acceptance of a delivery innovation that has the potential to reduce costs and increase efficiency, sustainability and receiver satisfaction.
Keywords: Online retail Smart locks Sustainability
1. Introduction In Belgium, approximately 200.000 parcels are delivered to con sumers on a daily basis (De Roo, 2018). During peak periods, such as the end-of-year holiday season, online sales even double (Allen et al., 2017b). Evidently, growing as well are the number of online shoppers and the frequency in which these online purchases are made (Comeos, 2018). Hence, organising these deliveries in an efficient way is essential, from a cost perspective as well as from an environmental perspective. Accordingly, logistics service providers invest in all kinds of alternatives, mainly alternative delivery locations including attended collection points (following a “shop-in-shop” concept) and unattended collection points (i.e. automated locker banks) (Weltevreden, 2008). Such alter native locations are more efficient as compared to home delivery, because they enable consolidation of parcels and efficient routing schedules (Wang, Zhan, Ruan, & Zhang, 2014). Most importantly, collection points and lockers avoid the problem of home delivery failure (Visser, Nemoto, & Browne, 2014). Regardless, consumers prefer to receive their parcels at home (Buldeo Rai, Verlinde, & Macharis, 2018).
In an attempt to reduce failed delivery rates, parcel service providers allow consumers to select a (narrow) delivery timeframe on weekdays that fits their schedule, reroute their parcels to another location or receive their parcels in the evenings, on Saturdays or on Sundays, when it is more likely that they are at home (Van Duin, De Goffau, Wiegmans, Tavasszy, & Saes, 2016). While such developments are successful in improving delivery success rates, they have a negative effect on parcel consolidation and routing efficiency (Boyer, Prud’homme, & Chung, 2009). Therefore, another innovation has caught attention in the businessto-consumer delivery market: smart locks. Smart locks are keyless electronic door locks that are operated through consumers’ smartphones and allow third parties to unlock a private delivery location with a unique, one-time-use digital key that is send via text messages or mobile applications (Reyes, Savelsbergh, & Toriello, 2017). So far, smart locks have been tested to access houses and car trunks for delivering all kinds of goods, including groceries. Tests by retailers Walmart and Amazon in the US (Jones, 2017; La Monica, 2017) and ICA in Sweden (Davidson, 2016) demonstrate its technical feasibility. In addition, logistics service
* Corresponding author. E-mail addresses: [email protected] (H. Buldeo Rai), [email protected] (S. Verlinde), [email protected] (C. Macharis). https://doi.org/10.1016/j.retrec.2019.100753 Received 12 December 2018; Received in revised form 16 June 2019; Accepted 23 September 2019 0739-8859/© 2019 Elsevier Ltd. All rights reserved.
Please cite this article as: Heleen Buldeo Rai, Research in Transportation Economics, https://doi.org/10.1016/j.retrec.2019.100753
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According to Visser et al. (2014), 12% of failed orders are redirected to be offered again the next day, a process that can be repeated up to four times (Van Duin et al., 2016). Yet, research suggests that 50% of these redeliveries fail again the second time (Buldeo Rai et al., 2019; McLeod et al., 2006). Delivery failure has negative effects on all stakeholders that are part of the last mile delivery process, i.e. logistics service providers, retailers, consumers and society as a whole. For logistics service providers and retailers, delivery failure is associated with costs. According to IMRG (2016), these costs add up to between £1,90 and £3,40 per failure. This range is based on information from five logistics service providers and includes reprocessing, communication and redelivery costs. In the increasingly competitive, cost-sensitive and customer-focused distribu tion sector, such costs are an additional burden (McLeod et al., 2006). Moreover, a survey by Conlumino for Barclays (2014) indicates that 64% of retailers in the UK mention consumers being absent during de livery as a critical concern. Delivery failure is caused by the mismatch between consumers’ lifestyles and working patterns on the one hand, and standard delivery times on the other hand (Song, Cherrett, McLeod, & Guan, 2009). Moreover, logistics service providers are often unclear about the approximate time in which the delivery will take place. This hinders consumers to organise for delivery reception and creates inconveniences (Allen, Thorne, & Browne, 2007; Buldeo Rai et al., 2019). What’s more, a survey in the UK showed that 8% of consumers ceased to shop online because of this lacking information. Ultimately, also society as a whole is negatively impacted by delivery failure, due to the additional vehicle-kilometres and associated externalities. Considerable benefits are envisioned for all stakeholders if the last mile challenge of online transactions could be optimised and improved (McLeod et al., 2006). Alternatives to home delivery are presented in the “good practice guide on urban freight transport”. These alternatives include reception boxes, delivery boxes, collection points, lockers and controlled access systems (Allen et al., 2007). While reception and delivery boxes (i.e. either fixed or temporarily attached personal lockers to consumers’ homes) pose challenges in terms of business model (Wang et al., 2014), collection points and lockers require consumers to pick up their order in a location nearby. Generally, consumers are not willing to finance such € l€ €m, 2001), nor are they innovative boxes (Punakivi, Yrjo a, & Holmstro happy to travel for their orders (Edwards, McKinnon, Cherrett, McLeod, & Song, 2010). What’s more, collection trips are often carried out dedicatedly by car, thus reducing collection points’ environmental po tential (Buldeo Rai, Mommens, Verlinde, & Macharis, 2019). Ultimately, controlled access systems (i.e. smart locks) remain a promising option, which provide couriers with a means of gaining access to a locked area to leave the goods in. Recently, retailers and logistics service providers have experimented with smart locks as a way to gain access for parcel delivery, in car trunks and homes. Yet, the major challenge is consumers’ concern. Research into consumers’ understanding, acceptance and use of new technologies has led to the creation of diffusion of innovation theory and attitude the ories such as theory of reasoned action, theory of planned behaviour and technology acceptance model (Wang, Yuen, Wong, & Teo, 2018b). Such theories and models are designed to measure the degree of acceptance and satisfaction from different points of view, depending on the con structs or determinants which represent their structure (Momani & Jamous, 2017). Only a few studies deal with technological solutions that aim to alleviate the last mile problem and the consumer perspective simultaneously. However, such research represents a major knowledge gap in literature and is called for (Vakulenko, Shams, Hellstr€ om, & Hjort, 2019; Wang et al., 2018b, 2018a). Different from service in novations applied to upstream supply chains in intra-organisational and inter-organisational contexts, the last mile is a consumer-oriented business with a strong behavioural component (Collins, 2015). Con sumers increasingly have the power to dictate how the last mile needs to be organised (Wang et al., 2018b) and their perspective is crucial to the
providers have successfully tested smart lock solutions in Belgium and judge the technology to be ready for implementation (Buldeo Rai, Ver linde, & Macharis, 2019). Yet, these tests also point out the main obstacle in smart lock implementation, which is consumer acceptance. According to King and He (2006), identifying factors that cause people to accept and make use of systems developed and implemented by others is a continuing issue. Following a news article on the topic, CNN correspondent Paul R. La Monica launched a poll on the social media platform Twitter, to which 271 users responded to the question if they would sign up for Walmart’s in-fridge delivery service: 21% voted yes, 65% voted no and 14% was unsure (La Monica, 2017). Hardly any research has been done on this promising but challenging home delivery innovation. Therefore, the objective of this research is to find out if consumers are ready to use smart lock systems for delivering online ordered goods, and under which conditions. To this end, we organised six focus group interviews with online consumers from March to April 2018. The remainder of this paper provides a literature over view in section two and a description of the methodological approach in section three. Section four presents our research results, which are dis cussed in section five. The final section ends with conclusions. 2. Literature Every year, the number of consumers ordering online products and services grows, together with the frequency in which these purchases are made (E-commerce Europe, 2015). This change in consumer behaviour revitalised the practice of home deliveries. Generally, consumers prefer their homes to receive online orders in favour of alternative delivery locations that are available, such as collection points and lockers (Bul deo Rai et al., 2018). Although home deliveries do not necessarily imply a heavier environmental burden compared to individual trips to stores, currently the last mile to the home is associated with several challenges that hinder its efficiency (Mangiaracina, Marchet, Perotti, & Tumino, 2015). These challenges include order fragmentation on the consumer side, short delivery terms and a maladjusted built environment. Another major issue is delivery failure due to consumers being absent to receive their parcel (McLeod, Cherrett, & Song, 2006), the so-called “not-a t-home-problem” (Deutsch & Golany, 2018). Figures on the share of deliveries that fail are inconsistent, with variations between 2% and 60% depending on the source. GLS, DPD and DHL, major logistics ser vice providers in the business-to-consumer parcel market, report failure rates between 15% and 50% depending on the area (Norman, 2015). In Belgium, the Belgian postal organisation and largest parcel service provider, reports a failure rate of 14% (Gijsbrechts, 2017). Table 1 gives an overview of percentages found in literature. Differences in failure rates among logistics service providers depend largely on the policies that they apply in case of receiver absence. In general, orders that could not be delivered to the appropriate address are dropped off at consumers’ neighbours or a collection point in their area. The delivery is considered successful when neighbours accept the order, but considered a failure when redelivered to a collection point. Table 1 Overview of delivery failure percentages from literature. Author(s)
Year
Country
Delivery failure percentage
Fernie and Sparks Retail Logistics Task Force McLeod et al. Edwards, McKinnon and Cullinane Okholm et al. IMRG Van Duin et al.
1999 2001 2006 2009
UK UK UK UK
30% 60% 25% 2%–30%
2013 2014 2016
3%–50% 13%–14% 25%
Goodchild and Ivanov Gijsbrechts
2017 2017
EU UK The Netherlands US Belgium
10%–15% 14%
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success of any innovation related to it (Wang, Yuen, Wong, & Teo, 2018a). Thus, a thorough understanding of consumers’ perceptions and behavioural responses towards the service innovations is imperative in providing services that fulfil consumers’ last mile needs (Wang et al., 2018b). Studies that do consider technological last mile solutions from the consumer point of view, investigate unattended home delivery models by means of secured boxes (Goethals, Leclercq-Vandelannoitte, & Tütüncü, 2012) and delivery by drones (Mittendorf, Franzmann, & Ostermann, 2017; Yoo, Yu, & Jung, 2018). Yet most research is dedi cated to lockers (Chen, Yu, Yang, & Wei, 2018; Vakulenko et al., 2019, 2018a; Wang et al., 2018b, 2018a; Xiao, Wang, & Liu, 2018; Yuen, Wang, Ma, & Wong, 2019, 2018; Zhang & Tong, 2017). These studies build on surveys anchored in innovation diffusion theory (Wang et al., 2018b, 2018a; Yoo et al., 2018; Yuen, Wang, Ng, & Wong, 2018), technology acceptance model (Yoo et al., 2018; Zhang & Tong, 2017), resource matching theory (Chen et al., 2018; Yuen et al., 2019) and €m, & Hjort, 2018a; 2018b), customer value theory (Vakulenko, Hellstro among others. Major findings from these studies point to the importance of consumers’ attitudes, perceptions and beliefs in determining will ingness and likelihood to adopt technological innovations (Mittendorf et al., 2017; Wang et al., 2018a, 2018b; Yuen et al., 2018). In this regard, Chen et al. (2018) found innovativeness and optimism among the most influential variables in consumers’ intended usage of lockers. In turn, less decisive are characteristics of the technological innovation itself (Wang et al., 2018b; 2018a) and consumers’ socio-demographic vari ables (Goethals et al., 2012; Yuen et al., 2018). Accordingly, the limited amount of research that has so far been dedicated to smart locks and the need for consumer perspectives in last mile research, advocates for an exploratory research approach. Quali tative data can help understand and explain the reasons behind certain attitudes and behaviours (Lauri, 2019). Therefore, the purpose of this research is to explore if consumers are ready to use smart lock systems for delivering online ordered goods and under which conditions, by means of qualitative focus group interviews.
profession, average number of online orders and average percentage of failed deliveries at home. Building further on this information, we classified our respondents according to their online purchase behaviour, in so-called “heavy buyers” and “light buyers”. We based this distinction on the global “E-shopper Barometer Report” from DPD Group (2017), that defines the average number of purchases for three types of buyers (small, medium and large) and 21 countries. In Belgium, the average number of annual online purchases is 13 (as opposed to 24 in the UK as highest average and 7 in Czech Republic and Estonia as lowest average): small and medium buyers make less than 7,4 purchases per year while heavy buyers purchase more. In our sample of respondents, 29 respondents are male (59,2%) and 20 respondents female (40,8%), which indicates a moderate over representation of men. The respondents are aged between 17 and 63, with an average of 25 years old. The difference is however large in the light buyers group (aged between 17 and 63, average of 29), but small in the heavy buyers group (aged between 18 and 24, average of 21). This is because younger consumers are found to be more internet-savvy and more active online shoppers (Wang et al., 2018a). However, it was challenging to attract older participants in general, which is a common issue in this type of research (see for example Wang et al. (2018a)) and a limitation in our study. Heavy buyers in our sample placed on average 2, 9 online orders per month (lowest number of monthly purchases was 1 and the highest number of monthly purchases was 10), while the light buyers used the internet to buy on average 2,6 products per year (lowest number of annual purchases was 0 and highest number of annual pur chases was 4). Table 2 provides an overview of our respondents. Interview questions and data collection process were designed ac cording to the guidelines suggested by Krueger (1998) and outlined in Table 3. The data collection process included presentation of the research and moderator to the respondents and a recording that was subject to respondents’ agreement and notification of anonymity. Five types of open-ended questions were used to guide the group discussions regarding the use of smart locks for parcel delivery. First, opening questions discussed online purchase behaviour, delivery preferences and
3. Methodology
Table 2 Focus group respondents.
Motivated by the novel research subject and the exploratory research question, we selected a qualitative research strategy. From March to April 2018, we organised six focus groups with 49 Dutch-speaking econsumers in Belgium. A focus group is a way of collecting data which involves engaging a small group of respondents in group discussions focused on a particular topic or set of issues (Lauri, 2019). The size of the groups (i.e. six to ten respondents per group) was established to achieve a good balance between respondent involvement and breadth of re sponses (Morgan & Krueger, 1993). During a focus group, researchers facilitate a discussion to elicit views and lay theories about the research topic (Lauri, 2019). As a methodological approach, focus groups are considered suitable because they look for information to understand a particular phenomenon or behaviour and the reasons why these occur (Lauri, 2019), while also creating synergies during focus group in teractions. In doing so, focus groups provide a means of investigating complex behaviours and motivations (Morgan & Krueger, 1993), as opposed to surveys that are ideal to accurately describe the individual characteristics of a large population (Lauri, 2019). Respondents were recruited via emails sent to students at a univer sity in the capital of Belgium (i.e. Brussels), as well as sent via students to their circle of acquaintances, friends and relatives. In the invitation enclosed in the email, we explained the aim of the focus groups (“To find out consumers’ attitude towards possible alternatives to standard home de livery of online orders.“), their role in these focus groups (“To share their opinion in open group discussions.“) and a number of locations and dates on which the focus groups would be organised. Respondents were selected based on their intention to participate and a fact sheet that they filled in prior to the focus group, covering respondents’ age, sex,
Heavy buyers Sex
Age
Light buyers Average number of parcels per month
Focus group 1: 20/03/2018 Female 22 3 Male 24 1 Male 21 5 Female 20 2 Female 22 7 Female 18 2 Male 21 4 Male 21 2 Male 19 3 Focus group 2: 22/03/2018 Male 20 1 Male 21 1 Female 22 8 Female 21 1 Female 20 1 Male 20 1 Focus group 3: 29/03/2018 Female 21 2 Male 20 1 Female 21 5 Male 21 2 Female 19 2 Female 20 1 Male 21 4 Female 20 2 Female 22 10 Female 20 2
3
Sex
Age
Average number of parcels per year
Focus group 1: 25/03/2018 Male 18 2 Male 23 3 Male 63 1 Female 53 3 Female 22 2 Female 49 4 Male 51 4 Female 51 4 Male 59 2 Focus group 2: 29/03/2018 Male 20 4 Male 21 3 Male 22 2 Female 20 4 Male 20 1 Male 20 2 Focus group 3: 10/04/2018 Male 20 3 Male 22 3 Male 20 4 Male 21 0 Male 22 3 Male 21 2 Male 21 2 Female 17 3 Male 19 2
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once the data had reached saturation, after which they were transcribed and uploaded in a computer-assisted qualitative data analysis software, Nvivo.2 We used Nvivo to structure, categorise and analyse the data in a thematic way. Thematic analysis is a method for identifying, analysing and reporting patterns within data (Lauri, 2019). To this end, we iden tified and labelled relevant features of the data in codes and clustered these codes into themes to create patterns and find connections between responses (Miles & Huberman, 1994). Throughout the process, we reviewed codes and themes to check the fit between the coded data and the entire data set (Lauri, 2019). The research objective guided the systematic process and entailed to identify if and under which condi tions consumers are ready to use the smart lock system for delivery of online purchases, while accounting for potential differences between the two groups of buyers.
Table 3 Focus group outline. Introduction of the research and moderator. Informing of respondents about anonymity and recording. Introduction by respondents to the group. Questions: 1) Opening questions: � How frequent do you make an online purchase? Which type of product? Which retailer? � Which delivery method do you use? Why? � What are the main advantages and disadvantages of online purchasing? 2) Introductory questions � What is your view on current delivery methods? � What influences your choice for a delivery method? 3) Transition questions � How important are deliveries? What are your expectations? � How could deliveries be improved (in terms of sustainability)? � How often do you experience delivery failure? What do you think of delivery failure? � How could delivery failure be solved? � How can consumers, retailers, couriers solve delivery failure? 4) Key questions � Would you use smart locks for in-house delivery? Why (not)? � Would you use smart locks for in-car delivery? Why (not)? � How do you feel about smart locks? � How do you perceive smart locks? � Do you perceive smart locks as useful? Why (not)? � Do you perceive smart locks as easy? Why (not)? � What are advantages and disadvantages of smart locks? � What is your willingness to pay for smart locks? 5) End questions � What do you think about the future of online purchasing and deliveries? � What are opportunities and threats for online purchasing and deliveries? � Which initiatives would you like to see in the future concerning online purchasing and deliveries? � Summary of main points. � Conclusion of group discussion. � Debriefing and thanking of respondents. � � � �
4. Findings This section covers the results from the group discussions in three main themes: delivery preferences in terms of location, experiences with failed deliveries and respondents’ perception about smart locks as a solution for delivery failure. Although we expected the two groups of respondents (i.e. heavy buyers and light buyers) to differ in terms of preferences, experiences and perception, our analysis showed generally similar results for both groups. Accordingly, distinct differences between groups are only discussed when observed. 4.1. Delivery preferences Overall, respondents prefer to receive their online orders at an address of choice, i.e. home or alternatively at work. What’s more, home delivery is considered to be an inherent part of the online shopping experience. Some respondents are unfamiliar with alternative delivery locations (i.e. collection points and lockers), and few expressed an explicit preference for these alternatives. Collection points are largely considered cumbersome (because of limited opening hours) and timeconsuming (because of the collection trips that are required), while re spondents’ knowledge about lockers lacks. This is exemplified by questions on pricing (“Are lockers also free of charge?“), safety (“Aren’t lockers easily forced open?“) and use (“What if there are multiple parcels in the locker and you take someone else’s?“). In general, respondents consider alternative delivery locations only of interest when located on itineraries that they regularly traverse (e.g. on school/work commute).
online purchase experiences (i.e. as opposed to traditional retailing). Second, introductory questions covered various delivery locations in depth (e.g. home, collection point, locker, reception box and delivery box) by using stimulus materials illustrating the different available op tions. Third, transition questions addressed home delivery failure, i.e. experiences with such failures, possible solutions for it and how various stakeholders can pay a role. Fourth, key questions were asked about smart locks. Here, stimulus materials in the shape of videos1 were introduced to demonstrate the use of smart locks for delivery in car trunks and homes. Questions probed for respondents’ attitude and feelings towards smart locks, perceived usefulness and ease of use, and their use intention. These questions were based on the technology acceptance model, that was introduced by Davis (1989) to explain po tential users’ behavioural intention to adopt a specific technological innovation. “Perceived usefulness” and “perceived ease of use” are found to be fundamental determinants of user acceptance (Davis, 1989). Although four major modifications have been applied to the core of the model (adding prior factors, contextual factors, consequence measures and factors suggested by other theories), a more recent meta-analysis of 88 published studies confirmed the validity and robustness of the model and its potential for wider applicability (King & He, 2006). However, the constructs defined within the technology acceptance model are often used within empirical studies that involve direct statistical testing. Contrary, in this study technology acceptance model constructs were used to inspire the development of interview questions in a qualitative research context. Finally, end questions asked for additional and closing com ments and respondents’ view on online purchasing in the future. All interviews lasted about 1 h. The moderator ended the interviews
4.2. Delivery failure experiences Despite respondents’ preference for home delivery, they do experi ence inconvenience and frustration due to delivery failures. These feelings are however stronger among respondents that are considered heavy online shoppers, as opposed to respondents that barely shop on line. Delivery failure rates largely differ among respondents. While one respondent indicates to miss about 75% of his orders, others estimate a percentage around ten. Respondents raise several measures that they undertake to avoid delivery failures, e.g. group chats with familymembers to verify who will be home to receive the order and tele working on the day of delivery. Some respondents are fine to collect their parcels at their neighbours, while others present so-called “safe places” as a good solution in case of absence (e.g. in the garden, behind the parked car). However, these solutions are highly context-specific and depend on e.g. residence type, neighbourhood type and relationship with neighbours. Respondents also suggest measures that businesses can implement to increase first time delivery rates. These suggestions can be largely
1 The videos can be found via https://www.youtube.com/watch?v¼wn 7DBdaUNLA and https://www.youtube.com/watch?v¼WZUDHytwt3s.
2 Information on the software package can be found via http://www.qsrint ernational.com/nvivo/nvivo-products.
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divided in two: delivery information and delivery time. Regarding de livery information, respondents indicate to require more accurate in formation on the delivery, e.g. by receiving an estimated arrival time or by being able to follow the delivery route in real-time. To respondents, such information should be part of the standard home delivery service. Regarding delivery time, respondents suggest to broaden this towards moments when they are more inclined to be home, e.g. on evenings or weekends. Several respondents also point out their frustration with couriers that fail to wait long enough at the doorstep to allow them to receive the parcel. Some respondents suggest reception boxes as a qualified solution to reduce delivery failure. The concept is similar to traditional letterboxes, although reception boxes are larger and secured, to accommodate parcel deliveries. This innovative solution has already been proposed several years ago (Punakivi & Tanskanen, 2002), but its adoption has remained small-scale. Accordingly, respondents also raise several issues that are associated with reception boxes, including the business model behind it (i.e. who pays, which price), practical feasibility (e.g. installation loca tion in urban areas or for apartments, security) and (lack of) aesthetic quality.
five people enter your house and you cannot get there in time?” Moreover, one respondent raised the matter of social control, in which neighbours keep an eye out in their neighbourhood. This attention potentially di minishes with large-scale implementation of smart lock systems, that enable anyone to enter a house at any time. Respondents make several suggestions to reduce risk and improve adoption rate of smart locks. First, enhancing courier information, which can be done by review and rating systems, as common within Uber and other applications that are part of the platform-economy (Dablanc et al., 2017). Most respondents however agree that this in formation is not sufficient and express the need to actually know the courier that enters their property. In respondents’ view, a system similar to the local postal distribution should be in place, where one person consistently distributes mail in the same neighbourhood. Second suggestion to improve smart lock adoption implies to limit the access zones. By means of sensors, couriers’ access could be restricted to a specific part of the house, e.g. the hallway, parking garage or garden house. Another suggestion is to limit the door opening width, sufficient to enable parcel drop-off only. Third suggestion by respondents concerns to introduce professional support to the smart lock system. A solid insurance issued by a trusted, specialised party is perceived as a basic requirement. Other respondents raise questions on the fact that retailers sell and install smart locks. They consider security firms as more suitable and trustworthy parties for this purpose. What is clear from the group discussions is that hardly any respon dent identifies as early adopter of the smart lock system because of the perceived risks. Most indicate a readiness to introduce smart locks when family and friends, or “most people”, have adopted it with success. As one respondent formulates it: “First I want to know if others find the system successful and reliable, then I would consider it”. At the moment, support for smart locks among consumers seems limited. Next to addressing the concerns and potential solutions raised by respondents, we consider two opportunities for the future: online retail growth including e-groceries and its associated product returns. Although online penetration for grocery products is still low (Comeos, 2018), a considerable increase is expected in the future, when digital natives will be adults responsible for family purchase decisions (Nielsen, 2015). A study by Nielsen (2015) states that one quarter of online re spondents orders grocery products online, and more than half are willing to do so in the future. Groceries are sensitive products, therefore less fit for delivery in collection points and lockers. Given the possibility of smart locks for so-called “in-fridge deliveries”, we join assumptions made by Allen, Piecyk, and Piotrowska (2017a,b), that smart locks’ largest potential could be for delivering online groceries. Next to this, the focus groups identified returning products as most frustrating part of the online purchasing process, inducing some re spondents to keep unwanted products or shop only at retailers with the most convenient return process. Given rising parcel volumes and asso ciated returns, smart locks could enable pick-ups of product returns, preferably combined with delivery drop-offs. In sum, an increase in online order volume and frequency supports the smart lock system, both in terms of need and relevance.
4.3. Smart locks’ potential Overall, respondents express interest in the smart lock concept, which they perceive as useful for several purposes, including delivery of online ordered products and groceries. Other purposes, which some respondents find more relevant than actual delivery, is the ability to open the door for visits by friends or family and for cleaning services. For parcel delivery, investing in smart locks is only interesting when applicable for all orders, i.e. not only for Amazon products as presented in the demonstrative video that was displayed during the group dis cussions. On a related note, Amazon’s retail platform is known among Dutch-speaking consumers in Belgium but adoption is largely restricted to the French-speaking population, who orders from Amazon.fr (Ecommerce Europe, 2018). Respondents’ willingness to pay for a smart lock system is directly related to these additional functions and pur poses. Remarkably, both heavy and light buyers feel like they make an insufficient amount of orders to justify smart lock installation. Perception of smart locks’ ease of use among respondents is largely subjected to practical questions. For smart locks at homes, many re spondents worry about the combination with home security systems and the possibility of escaping pets. Smart locks at cars are expected to pose traceability problems for couriers, e.g. in case of large parking areas or underground parking areas that hinder geolocation software needed to locate the car. Respondents express concerns as well about what hap pens with their in-transit delivery if they unexpectedly need to use their car. There is no clear-cut preference for either one of the two smart lock applications (i.e. in-home and in-car) among the heavy buyers, while most light buyers appreciate in-home delivery. Most respondents are inclined to use smart locks at some point in time, given specific condi tions. Yet for both applications, the perceived risk of smart locks is (too) high. Respondents raise two security issues: hacking and theft. Hacking of the smart lock system is an issue that virtually all respondents expressed their concerns about. Yet, even if the smart lock system is solid, respondents refer to risks associated with “the human factor”, i.e. theft. Respondents fear theft by couriers when entering their property, and the fact that couriers can provide information to others. Not only about their valuables, but also about the location of in-house cameras or details about the security system in place. As one respondent puts it: “It’s a job for thieves: they earn money as courier, while at the same time searching for houses where they can find more”. In addition, cameras that are part of the smart lock system generate little trust. First, there is the legal matter of using the recorded images in case of actual theft and second, such images still provide few possibilities for action. “Many people will say: “I’m good as long as I can see the camera images”, but what will you do when
5. Discussion The findings outlined in this research provide insight into con sumers’ attitude towards controlled access systems or smart locks, which present a promising solution to eliminate delivery failure and alleviate part of the last mile challenge. This challenge threatens efficiency and performance of logistics service providers and retailers in the businessto-consumer parcel market, while also creating an additional environ mental burden to society (Boyer et al., 2009). The technical feasibility of smart lock systems has been demonstrated in several parts of the world that have adopted online retail models to a large extent, including the US, Sweden and Belgium (Buldeo Rai et al., 2019; Davidson, 2016; 5
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area on which we focused our study (i.e. Brussels, Belgium). In the future, smart lock research would benefit from further and wider investigation in other geographical areas in which adoption of online retail channels is high. Moreover, the focus groups that we organised were rather limited in sample size and did not accurately represent all relevant age groups. Future smart lock research can built upon our exploratory research findings. Promising next steps include, first, iden tification of most relevant consumer profiles. For example, studies dedicated to new vehicle technologies showed income, sex, residential environment and technology-savviness to be competent indicators for interest and adoption (Bansal, Kockelman, & Singh, 2016). Second, investigation of actions to relieve consumers’ main concerns, as Chen et al. (2018) and Yuen et al. (2018) did to encourage locker-adoption. Third, development of user-experiments to challenge consumers’ cur rent resistance after actual usage. For autonomous vehicles, to which consumers’ perceived risk is high as well, such experience proved to have a positive effect on acceptance (Feys & Vanhaverbeke, 2019).
Jones, 2017; La Monica, 2017). Yet, the key obstacle in smart lock implementation remains consumer acceptance. Accordingly, the find ings of this research contribute to the scientific body of literature on online retail’s last mile, while also providing several societal and managerial implications. This study contributes to scientific research on the last mile and online retail logistics in two ways. First, we advance knowledge on smart lock systems as an alternative to attended home delivery. Although the scientific community has developed an extensive and diverse body of literature on home delivery and home delivery alternatives (see e.g. Lim, Jin, and Srai (2018) and Hübner, Kuhn, and Wollenburg (2016) for overview), to date few studies are dedicated to smart lock systems. Possibly, this lack of attention can be explained by the second gap to which this research responds: the consumer perspective deficiency in last mile research. As the main obstacle to smart lock implementation is consumer acceptance and the related stream of research generally dis regards consumers as key stakeholder, this lack of studies investigating smart locks is an unsurprising result. The importance of including con sumers’ perspectives in last mile research has been raised by several authors (Vakulenko et al., 2019; Wang et al., 2018b, 2018a). The find ings of our research point out that consumers perceive smart locks as useful and easy to use, despite some practical issues (e.g. integration with home security systems, possibility of escaping pets). Such smart locks should be multi-purpose, as both heavy and light buyers judge their amount of online orders insufficient to justify smart lock installa tion for deliveries only. Yet, we also demonstrate that perceived risk for hacking and theft currently hinders consumers’ intention for (early) smart lock adoption. These perceptions live strongly among consumers, both heavy and lights users of online retail models, and are challenging to neutralise – even if a system works near perfection. In this way, our findings confirm the importance of the consumer perspective in last mile research and demonstrate consumers’ attitude towards smart locks systems specifically. In general terms, it contributes to the theoretical knowledge pool of efficiency-improving parcel delivery developments. Building further on these findings, the research provides managerial contributions as well. While it confirms that businesses working with smart lock systems have an important challenge to tackle when it comes to consumer acceptance, our findings also point out (part of) the solu tion. Such solutions include improving courier information, limiting courier access and enhancing professional support. We also introduce specific contexts that provide an opportunity for smart lock imple mentation, i.e. grocery deliveries and order returns. Such findings result from the exploratory and qualitative research approach that has been adopted in this research, which enabled to extract consumers’ perceived risk as well as initiatives that have the potential to reduce it. In this way, we provide practical insights to support sustainable implementation of smart lock systems in the future. Moreover, in line with suggestions made by Chen et al. (2018) and Yuen et al. (2018) for supporting con sumers adoption of lockers, logistics service providers and retailers experimenting with smart locks are advised to educate, communicate and market the benefits that smart locks provide, i.e. reduced environ mental impact, improved flexibility and convenience, building on word-of-mouth marketing through experienced users. From a societal point of view, every solution that is successful in reducing delivery failure and ultimately enhancing transport efficiency is considered of key importance. With delivery failures rates balancing between 2% and 60%, growing use of online retail channels and con sumers’ explicit preference for receiving these orders at home, solutions that enable unattended home delivery are crucial. The smart lock is a promising initiative, although it brings along significant challenges at the consumers’ side. Our research identifies the main challenges and points out potential solutions. In this way, it contributes to reducing the environmental impact that online retail’s last mile imposes on our society. Concluding this research, several limitations of our study deserve further reflection. These limitations include the specific geographical
6. Conclusion The number of online shoppers and the frequency in which these shoppers make purchases, is growing. Overall, consumers’ preference goes out to delivery at home, despite the chance that they will not be there to receive their orders. Such delivery failures cause unnecessary costs for logistics service providers that carry out these deliveries, while also creating an additional environmental burden. Hence, there is a need to optimise the delivery process. To this end, smart locks are presented as a competent solution. Smart locks enable couriers to access con sumers’ car trunks and homes with a dedicated, one-time-use digital key, to drop off parcels in case of receiver absence. Although the tech nical feasibility of smart locks has been demonstrated, the main obstacle in smart lock implementation is consumer acceptance. To identify op portunities and challenges for smart lock implementation from a con sumer point of view, we organised six focus group discussions with 49 online consumers, that we divided in “heavy buyers” and “light buyers” according to their online purchase frequency. The results of these focus groups indicate that while consumers experience inconvenience and frustration from delivery failure, delivery at home remains their preferred location. Smart locks are considered useful when applicable for other purposes as well, e.g. opening the door for visits and cleaning services. Two main obstacles to implementation are risk for hacking and theft. Suggested solutions to alleviate these obstacles include improving courier information, limiting courier access and enhancing professional support. Nevertheless, consumers are hesitant to become early adopters of the smart lock system. Next to addressing consumers’ concerns with competent solutions, two opportunities are expected to stimulate largescale adoption of smart locks in the future: online retail growth (including groceries) and its associated product returns. The research contributes to the theoretical knowledge pool of efficiency-improving parcel delivery developments. Moreover, for logistics service providers on the business-to-consumer market, the research results provide insight into consumer acceptance of delivery innovations that have the poten tial to reduce costs and increase efficiency and receiver satisfaction. Acknowledgements This work is supported by the Innoviris Anticipate programme: prospective research for Brussels-Capital Region. The authors would like to thank Alexis Close, Jasper De Bondt, Michiel De Decker, Gerben Fiesack, Sander Geerkens, Jens Jacob, Axel Peeters and Kobe Vaes for their much appreciated efforts in collecting the data. References Allen, J., Piecyk, M., & Piotrowska, M. (2017). An analysis of online shopping and home delivery in the UK. London.
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