How In-Home Package Delivery Could Save E-Commerce

Wait. Ecommerce needs saving?

The reality is that ecommerce purchases remain infinitesimal compared to traditional forms of shopping for most items. And a significant reason is that consumers fear their purchases will be lost or stolen if no one is home to receive them.

Which is why major retailers are beginning to experiment with in-home delivery services. JL

Daniel Terdiman reports in Fast Company:

One of the biggest barriers to people shopping online is that they worry about what happens if their package arrives when they’re not home. It could get stolen or rained on or be sent back to the shipper. “That cognitive load causes people to think twice before ordering online,”

Would you allow UPS to drop off a package inside your home when you’re not there?

That question is at the heart of a three-month pilot program that smart lock maker August tried out last winter with 76 of its users in an attempt to see if the company could help jumpstart the e-commerce industry.
Sitting in a conference room in August’s San Francisco headquarters last month, CEO and founder Jason Johnson explained that lofty ambition: It turns out, he said, that one of the biggest barriers to people shopping online is that they worry about what happens if their package arrives when they’re not home. It could get stolen or rained on, they fear, or be sent back to the shipper if there are too many unanswered reminders. Maybe they’ll have to drive to a store to sign for it.
“That cognitive load causes people to think twice before ordering online,” Johnson argued. “People have to go through machinations to facilitate [their package delivery]. These issues are the number one thing restricting e-commerce shopping.”
But what if consumers didn’t worry about the fate of their precious package? That would make buying online as easy as going to the store, Johnson said. That’s why numerous retailers and delivery service providers are thinking about ways to solve the problem.
And that’s what led to the August pilot program.
The company emailed a bunch of its customers and asked if they would participate in a test. They already know the benefits of their smart lock–which can auto-unlock when they approach, and which lets them give one-time, specific-time, or anytime access to anyone they like. But would they be willing to let delivery companies come inside to drop off those packages when they’re not at home if they had a camera and could watch the whole process, either live or later on?

Apprehension

A lot of people would be resistant to trying such a thing. There’s all kinds of potential problems. Theft. Pets escaping. Damage. Heck, what if the delivery guy saw a picture of your wife or daughter and decided to stalk her?

“It’s appropriate to use an analogy like Uber,” Johnson said, “where if I told you eight years ago that you’d have some 19-year-old in a Corolla pick you up, with no training, no skills, etc., and drive you to the airport. You’d say ‘No, thank you.’ I think there’s plenty of people who would say no way.”
Delivery companies and retailers would likely have their qualms as well, especially around their liability for any of those issues listed above, for example.
But August still thought it was worth finding out if in-home delivery was possible. So it gave 76 of their lock owners a Nestcam and a keypad that lets someone punch in a code that opens the lock and asked them to start allowing such deliveries. All August wanted in return was to get the videos of the deliveries and some feedback.

Simple Guidelines

The guidelines were simple: During the three months of the pilot, participants were asked to place between 5 and 10 orders from the vendors of their choice, each time giving the delivery provider instructions for dropping off the package inside–in other words, give them a code for the August keypad, anything they needed to know about pets, and that was it. And then point the camera at their entryway. 
Over the course of the experiment, participants got a total of 250 deliveries.
One of the keys to the trial was that August didn’t ask delivery companies to train anyone on how to handle in-home situations. It was important that those making the deliveries had to figure out what to do on their own–such as reading the instructions the customers had left for them.
Turns out, that wasn’t such a big ask. Many delivery companies have been dropping packages off this way–albeit without being enabled with technology like August’s–for years. Many locks have analog pin codes, and delivery companies often have access to the codes, or are even given keys to people’s homes, Johnson said.

August’s users were super happy with the results of the pilot, Johnson said. “The overwhelming response was ‘This is great,’” he said. “People were a little nervous, but overwhelmingly, they said, ‘This is how I want everything delivered to my house.”

Before the trial, an August survey found that participants had an extremely negative view of the idea of “unsecured” deliveries, a -42 Net Promoter Score, to be exact. Afterward, that score improved to +16. Further, 90% of the participants said they would continue to accept in-house deliveries from merchants–if it was available.
Kristin McGee, a teacher who lives in rural, coastal California, is on board.
Although she was initially adamant that she’d never let a delivery person in her empty house–“I was like, ‘Not happening,'” she said. “I don’t want to let some stranger into my house when I’m not there.”–she’s now a convert.
“I feel like I am one of those millennials who’s finding ways to get out of all her chores,” she said, sheepishly, adding that she now orders groceries to be delivered when she’s not home from two to three times a week. And the combination of the camera and the keypad is what won her over.
“My primary initial fear was that there would be someone in the home when I got home,” she said. “But with video, it kind of eliminated that fear. I would know that someone was gone before I even got home….Then I ended up loving it. It was super safe. I felt it was a secure system.”

What About The Vendors?

Getting customers on board is obviously a big step forward. But what about delivery companies and other vendors?

At the same time that August was running its pilot program with customers, it also had a separate trial going on with Sears Home Services, one of the largest appliance dealers and home service providers in the country. The idea was the same: Make it possible for Sears technicians to be able to easily get inside customers’ homes to make deliveries, service appliances, or even respond to emergency plumbing problems, all when no one is around.
Access to people’s homes is vital for the company’s business said Ryan Ciovacco, president of connected living for Sears Holdings. “We need to have someone there. More often than not, that’s causing someone to take a day off from work, or plan their [weekend] around it. We wanted to test how receptive people would be to allowing a technician in their home” when they’re not there.
Sears selected 20 homes and ran the experiment for two to three weeks. “It was a really successful pilot for us,” he said. “Every customer who participated said that they would pick Sears Home Services over a competitor because of this flexibility, the benefit of being able to give keyless entry to the home.”

Ciovacco said that customers are always going to have some concerns about something like deliveries when no one’s home, but added that he thinks those concerns can be allayed when the vendor is a trusted company or brand. Plus, he said, “it’s a tradeoff. They think the value outweighs that very, very rare chance that something bad could happen.”
For Sears, expanding from the pilot program and making such service calls and deliveries available nationwide isn’t something that can happen overnight. It would have to integrate access to August’s locks directly into its own apps and devices. “But once we figure that out,” Ciovacco said, “we’ll probably do something” larger.
Although August isn’t revealing who else it’s talking to besides Sears, Johnson said the company is now in active discussions with numerous retailers and delivery providers about how they could provide home delivery services when no one’s around. “It’s a question of working with those providers to make this something that’s commercialized, with training,” Johnson said. “We’ve already completed trials with some, and some are moving toward commercialization plans.
The trick will be to get people to the point where they take such things for granted, much as we all do now with things like taking rides with Uber or Lyft, or staying in people’s homes via Airbnb.

That day is coming. “I think so,” said Ciovacco. “There are always going to be some sorts of issue, and that’s going to happen across the board with every new service and technology, and I think we just have to all work together to remove as many of those [issues] as we can.”
McGee, who used to live in a city and regularly grappled with packages being stolen from outside her house, agreed.
“For big city life, I think it’s a must,” McGee said. “I think it changes everything for deliveries.”