Home delivery for online purchases is still on an upwards trend with no signs of slowing down. However, while this has been great for some businesses, it hasn’t been without its consequences. Namely, higher shipping expenses for retailers, traffic congestion, parking violations, and even increased air pollution.
One option to combat these negatives is Alternative Delivery Locations, or ADLs. In this article, we take a look at ADLs, their pros and cons, and how they could be a cost-effective option for your business.
What is an ADL?
An ADL is a brick-and-mortar location where a delivery provider can drop multiple packages and customers can pick up their orders close to home.
According to the Rensselaer Polytechnic Institute, “alternative delivery locations (ADLs) such as delivery lockers like Amazon’s Hub Locker, postal stores, or partnerships between brick-and-mortar stores and delivery companies such as the UPS Access Point have been developed as viable solutions” to the negative impacts of home delivery.
You may never have heard of the term Alternative Delivery Location before, but chances are that there is one near you. For example, UPS alone has more than 21,000 Access Point locations in the U.S. and 90% of the nation’s consumers live within five miles of a location.
Why are ADLs beneficial?
ADLs have a number of benefits to the consumer, delivery provider, and retailer. These can include:
- Reducing the overall fuel used to fulfill orders.
- Reducing congestion in urban areas.
- Lowering the consumer cost of goods.
- Allowing consumers to order without giving their address.
- Giving purely online stores access to a physical location.
- Reducing shipping expenses for the retailer by as much as 30%.
- Reducing a delivery’s CO2 emissions by up to 40%.
What do customers think of ADLs?
Research suggests that while some customers will choose an ADL if the option is present, many will still prefer to have packages shipped directly to their home. Unfortunately, it’s the customers who receive the most packages that are among the least likely to use ADLs. Meaning, the customers putting the most pressure on the system are not going to be the ones to take measures to relieve that pressure.
In urban areas, where congestion needs to be cut down the most, this discrepancy is particularly problematic; data indicates residents of apartment buildings and elderly shoppers will likely travel a maximum of about two city blocks to pick up a delivery. In general, younger customers are more likely to use ADLs.
For the customers who do choose to use ADLs, research has found:
- 50% chose to do so for cost savings.
- 15% chose to do so for the added security.
- 15% chose to do so for gifts they wished to keep secret.
North America is behind on the use of ADLs.
While ADLs are becoming more and more commonplace in Europe, they’re not nearly as widely used in North America. In some European countries, ADLs account for up to 70% of deliveries. In the United States, that number is closer to 18%.
Why are Europeans so much more willing to use ADLs than North Americans? Well, according to experts, it’s a matter of convenience. It stands to reason that if consumers can get the same package delivered to their home for free, they won’t want to drive to a store or alternative location to pick it up. Meaning, retailers must look into offering incentives for consumers to choose ADLs.
Can rural consumers access ADLs?
While ADLs work best in dense, urban areas, they’re not a complete write off for rural consumers. One of the big sells for ADLs is the lower price point, and that can often be a big priority for those in rural, less affluent communities, where distance is considered less of a problem to begin with.
Alternative Delivery Locations (ADLs) offer consumers, shippers, and retailers many benefits and are significantly more environmentally sustainable than home deliveries. However, many consumers in North America will forgo using them, as they’re viewed as less convenient. In order to promote ADLs, retailers must incentivize consumers choosing this option.