Even as infrastructure spending lags, smart city planning is on the rise, and it’s directly tied (among other important human and environmental statistics) to consumer behavior.
The purpose of a smart city is to intelligently manage the city’s assets, using integrated information and communication technology based on urban informatics, so as to improve the efficiency and sustainability of services.
So, why and how is smart city planning going to affect how you shop online?
Online shopping trends are evolving (as always).
As online orders continue to 23% year over year, and in much shorter shipping times to crowded urban centers, logistics planning, specifically for last mile delivery (the most challenging leg of the shipment), will be a major component in who fails and who succeeds in online retail.
With 80% of Americans shopping online at least monthly, and shoppers living in metropolitan areas spending the most annually, it should come as no surprise that next day delivery no longer holds the same turnaround time prestige it once did. In March 2017, Amazon launched a FREE two-hour delivery service in the Milwaukee area, adding to its Prime Now service, already available in more than 30 U.S. cities. Customers enjoy a selection of thousands of items from groceries, to restaurant delivery, household goods and more.
But this is just one example of why last mile delivery has become so critical for online retailers. Online orders for a variety of product types such as electronics, apparel, entertainment, health and beauty, as well as food, are expected to swell to $1.35 billion by 2018. Anticipating this surge in transportation delivery needs, with the knowledge that traditional methods such as USPS, FedEx and UPS may not be able to sustain this capacity, the industry is actively testing alternative modes of delivery such as local regional carriers, drones, and click-to-collect locations.
Enter Smart City Planning.
Smart City plans and challenges are being implemented worldwide. Both developed and developing countries such as the United States, Australia, and India are moving fast to cultivate urban areas that create high quality of life and sustainable economic development in key areas including transportation, environment, and economy.
For example, in December 2015, the U.S. Department of Transportation launched the Smart City Challenge, in which cities across the country were asked to generate ideas for an integrated, innovative “transportation system that would use data, applications, and technology to help people and goods move more quickly, cheaply, and efficiently.”
The department reported an unprecedented response with nearly 80 applications and a wide variety of pioneering tactics to wrestle urban mobility challenges. One innovative approach from New Orleans is to create routed on-demand minibuses that provide affordable first and last mile delivery services. In Seattle, the idea is to use shared data to dynamically route delivery traffic, utilizing off-peak delivery times, and enabling car share operators to deliver packages.
How will this affect your online shopping?
Perhaps the most important effect the average consumer will experience due to last mile delivery services and smart city planning will be enhanced quality of life. These trends are likely to save you time and money, provide nearly any product you desire within the same day you order it (if not within an hour or two), and afford an economic boost to your community.
Depending on where you live, you are likely to see extended fleets from traditional delivery services, regular delivery drones, start-up local delivery services, more products delivered via car share operators like Uber and Lyft, and even retail store-specific delivery fleets.
But results directly tied to the consumer are sure to materialize as well.
One of the outcomes will be the transformation of surplus retails space. As anchor stores and suburban malls struggle to survive, there is an opportunity to convert that space to shared regional distribution hubs.
Another beneficial outcome to the shopper will be amplified collaboration between retailers, merchants, service providers and advertisers with the goal of enhancing user experiences by way of shared information from the consumer. This, in turn, will create an increase in social science studies of shoppers in order to understand constantly evolving consumer behavior; therefore, improving online shopping services even more.
And though the majority of online consumers have yet to experience it, augmented reality (AR) is set to become a routine part of our regular shopping experience as well. This result will be incredibly beneficial to both consumers and retailers. Despite the convenience and popularity of online shopping, one integral part of the experience that is often missing pertains to the sensory elements that customers use to make purchasing decisions. Many online retailers report that because customers cannot see (in complete detail) or feel the product, interactivity decreases, leading to abandoned online shopping carts.
But experts say that AR will solve this problem via enhanced product visualization and configuration, allowing the consumer to view the product dimensionally, and in far greater detail, so as to properly visualize how the item will look in your home, or on your body. This too will enhance user experience, and likely decrease abandoned carts and crippling return rates.
An additional transformation that will change how you shop online is mobile devices improved specifically for online shopping. Since smaller screened cell phones weren’t originally intended for this purpose, but are rapidly increasing in usage for such actions, this technology will adapt accordingly, allowing for onscreen product comparisons and improved ease of use.
Once again, data and technology are the key tools with which we improve our personal lives, community, and environment. Companies should consider end-to-end ecommerce solutions that will have deep integrations between their customer, where they live and the networks that deliver what they sell.