Internet of things device developer, TZ Limited (ASX: TZL) continues to carve a niche for itself with its access control and software platform as the rapid adoption of e-commerce propelled by COVID-19 looks like it’s here to stay.
The company says it is one of the few businesses globally working to support the transition to e-commerce by supplying its “market-leading” infrastructure.
TZ’s digitally-enabled locks and platform work together to enable retailers to notify customers when a package is ready, while providing them with 24-hours a day secure collection.
‘Huge’ market opportunity
According to TZ chief executive officer Scott Beeton, parcel collection flexibility is a “huge” and “under-serviced” market opportunity for the company, with recent data indicating more than half of online shoppers opt to have their products delivered to after-hours collection hubs.
Research out of the US revealed 2020 click-and-collect sales had grown almost 107% to US$72.46 billion, with predictions this will almost double to US$141 billion by 2024.
Parcel-wise, this number is anticipated to increase from the 103 billion delivered in 2019 to 220 billion by 2026.
Mr Beeton said the impact of the soaring click-and-collect parcel retrieval process is beginning to cause mounting demand for smart lockers with this sector reaching $644.7 million in 2020 and predicted to exceed US$1 billion in the next three years.
He added the mounting market was also driving a change in the types of lockers used by retailers and consumers.
“Historically these lockers have been built to serve one purpose: securing goods,” Mr Beeton said.
“As retailers increasingly use this technology in a customer-facing role, the user experience and role within the logistics chain are becoming more prevalent – and not everyone is living up to expectations.”
Mr Beeton noted this presented a “real opportunity” for smart lock manufacturers such as TZ.
Leading smart lock technology
According to Mr Beeton, when he joined TZ in March last year, it already had “leading technology” in the smart lock space.
In support of this, TZ’s growing client lists includes majors such as Apple, Google, and Microsoft. Major US universities and Australian retailers are also among its many clients.
“TZ is now in a position where we can partner with retailers and make collection easier and more convenient, without the risk of theft or damage,” Mr Beeton said.
Business performance improving
After a number of cost-reduction initiatives since 2020, TZ is beginning to reap the benefits.
The company has lowered its annual fixed operational costs by $2.5 million, while boosting first half revenues by 8% and expanding its sales pipeline – despite COVID-19 challenges.
During the March 2021 quarter, TZ saw cash receipts of $2.6 million, while recurring revenue has now exceeded $2.5 million a year.
TZ’s recurring revenue target is more than $10 million by FY 2023.
To meet this target, the company’s strategy is to continue growing revenue while paring costs.
Other efforts include building operational efficiencies while continuing to invest in its core technology to maintain a competitive advantage.
Couriers Please Australia and HUBBED partnership
As part of TZ’s growth strategy, it collared an agreement with Couriers Please Australia last month.
The deal will see TZ acquire Couriers’ POP station parcel locker network on Australia’s east coast.
This network comprises 34 click, collect and return parcel locker banks plus a further 19 parcel locker banks to be deployed to sites of TZ’s choosing.
Additionally, TZ has partnered with HUBBED which has more than 2,000 parcel collection locations in Australia.
“Through agreements with retailers and couriers, HUBBED gives consumers more control and options regarding their preferred delivery, collection and return choices,” Mr Beeton explained.