Delivery that does not end at the front door
Home delivery assumes someone is there to receive the parcel, or that it is safe to leave. Often neither is true. Out-of-home delivery offers another ending: the carrier takes the parcel to a location where the customer collects it at a time that suits them. These locations are usually grouped into three types, and carriers and retailers use different names for them.
The main options
Parcel lockers. Automated units with compartments in different sizes, typically placed in shopping areas, transport hubs, supermarkets or residential buildings. The carrier loads the parcel and the customer receives a code or a QR code to open the compartment. Many lockers are available around the clock, which is a major attraction.
Pickup points. Staffed shops, convenience stores, newsagents or service counters that hold parcels for collection. The customer shows a code or identification at the counter. Opening hours follow the shop’s, and a pickup point may also accept returns or drop-offs.
Carrier-run counters and depots. Collection from the carrier’s own site. This tends to be the fallback for parcels that could not be delivered, and hours and location may be less convenient.
Other alternatives. These include delivery to a workplace, to a neighbour by arrangement, to a secure safe place at the address, or to a building’s concierge or mailroom. They are not out-of-home in the same sense, but they serve the same purpose of avoiding a missed handover.
How these options change the numbers
For a seller, the main effect is on failed delivery. When a driver cannot hand over a parcel, it may be re-attempted, held for collection, or returned. Each outcome costs money and annoys the customer. Failed deliveries are a well-known cost in the final leg of the journey, which is why last-mile delivery is the most expensive part of many shipments, and an alternative location removes some of the risk because the parcel is delivered to a place that is always staffed or accessible.
There is also a potential cost saving for the carrier. A driver can leave many parcels at one stop instead of making separate visits to individual homes, which can improve route density and the number of stops made per hour. Carriers sometimes pass part of that benefit on through lower prices for out-of-home delivery, though this varies by carrier and contract, so do not assume a discount exists. Ask what the rate is, and whether any surcharges apply.
Other effects to weigh:
- Theft risk. A locker or staffed counter removes the problem of parcels left on doorsteps, which is relevant to package theft.
- Customer effort. The customer now makes a trip. Some people like this, and others see it as shifting work from the seller to them.
- Dwell time. Parcels are normally held for a limited number of days. Uncollected ones are returned, and the seller may bear the cost of the return trip.
- Size and weight limits. Locker compartments have fixed dimensions, and pickup points may not accept heavy or bulky items.
Where it fits and where it does not
Out-of-home delivery works best for small and medium parcels, in areas with good locker or shop coverage, for customers who are rarely home during the day. It also suits urban apartment buildings where doorstep delivery is awkward. Apartment dwellers often find lockers more convenient than waiting in.
It fits less well for large or fragile items, for older or less mobile customers, for areas where pickup points are sparse, or for goods that require a signature at the home address. In rural delivery settings, the nearest pickup point may be a long way off and offer little real benefit.
Cash on delivery and age-restricted goods may also have special rules, so check the conditions with the carrier.
Offering it to customers
If you decide to offer alternative locations, a few practical decisions follow:
- Make it a choice, not a default. Let customers pick home delivery or a nearby point at checkout, and show the closest options clearly.
- Explain collection rules. Tell customers how long the parcel will be held, what they need to bring, and what happens if they do not collect it.
- Send clear notifications. A message with the location, the opening hours and the collection code reduces missed collections, and delivery notifications are especially valuable here.
- Plan for returns. Pickup points can also serve as convenient places to drop returns, which supports return consolidation for sellers with many small returns.
- Check integration. Your store platform or shipping software must be able to show the options and pass the chosen location to the carrier, so ask about it before promising the feature.
Questions to ask a carrier
Before adding these options, find out how many locations the carrier or its partners operate near your customers, how the price compares with home delivery, how long parcels are held, what size limits apply, and how uncollected parcels are handled and charged. Check how the service appears in tracking, since customers who cannot see where the parcel is will contact you.
Measure the results after launch. Compare missed handovers, customer contacts and the share of parcels collected on time between home and out-of-home delivery. The evidence from your own customers will show whether the option adds value or only adds complexity.