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Published 16 August 2017
Autonomous vehicles could mean easier and cheaper travel for more people, with the opportunity to travel further to destinations of their choice. This significant evolution will require adapted strategies from developers, town centre managers, retailers and local councils, and a greater need for even more collaboration between these groups. We asked Martin Wedderburn, one of the country’s leading transport consultants, for his views.
The recent confirmation of the end of the combustion engine by 2040 serves as a timely reminder of how the ‘car’ is expected to change in the coming years. The gradual electrification of the vehicle fleet is accompanied by two parallel trends.
We are witnessing increased levels of automation ranging from the general rollout of specific automated functions such as Park Assist to the first trials of fully automated vehicles. Personal and freight vehicles are increasingly connected with the ability to receive real-time information about everything from incidents to parking availability. The UK is actively seeking to establish itself as a premier test bed for the development of vehicle automation technologies.
Furthermore, we are seeing a gradual shift from vehicle ownership to various mobility services, known in the jargon as Mobility as a Service (or MaaS). Vehicle manufacturers and car hire companies are jostling for a share of this potential market, taking on the disruptive newcomers such as Uber. Mobile technology is the key to MaaS, enabling users to plan their multi-modal trips and pay for their travel from their mobile devices. The emergence of full automation is expected to be transformational to the MaaS service offer, with taxi-like door-to-door travel possible at a fraction of the cost.
Analysts are divided as to whether consumers will adopt MaaS as a mass market product, or whether suburban communities will prefer to purchase their own autonomous vehicles. Regardless of which model of ownership and usage prevails, the nature of parking will change fundamentally with users summoning vehicles from mobile devices.
The physical layout of retail parks and shopping centres is still largely designed around a traditional parking model. To imagine the challenges of managing drop off and pick up at such a large scale one need look no further than major airports and railway stations, with intensive management of time-limited pick up areas fed by complex vehicle stacking systems.
On the face of it, the parking constraints that pose a barrier to traditional town centres and high streets will become irrelevant. Yet the logistics and the economics of managing competing demand for kerb space will not get any easier, and it is inevitable that local authorities will need to adapt their regulatory and pricing regimes to cope with demand for kerb space from waiting vehicles.
Except for some exceptionally keen early-adopter types, we can safely predict that logistics businesses will adopt autonomous before most consumers. Goods have no irrational fears or psychological thresholds that needs to be overcome, so long as they are secure and adequately insured. Commercial vehicle fleets also have a quicker turnover than private vehicles. So faced with the opportunity to gain efficiency savings over their rivals, businesses will seek to stay ahead in the automation race.
Potential cost savings could materialise throughout the supply chain. One of the first applications is likely to be connected goods vehicles on motorways (‘lorry trains’). Yet there are signs of applications in the last-mile sector with a recent trial in Greenwich where Ocado used a self-driving CargoPod for grocery deliveries, and Swisspost has tested a similar device for parcel delivery in Switzerland. Online retailers will benefit from even greater cost savings with further automation in picking, dispatch and stock control.
The combination of autonomous vehicles with advanced and remote manufacturing techniques could be revolutionary for other products. Imagine, for example, what this could mean for DIY product supply chains. A range of basic products could be tailored to customer specifications while in transit, from the mixing of a specific paint colour to the 3D printing of a specific size of valve.
The barriers between the online and physical retail environments have been slowly disappearing. Some supermarkets already operate their online delivery services from traditional stores, while online retailers are starting to operate with click and collect points and physical showrooms.
In a world of fully autonomous vehicles, once a consumer has placed an order there is relatively little difference between the consumer sending a vehicle to a warehouse to collect the goods, or the business dispatching a delivery pod. In a world where vehicle ownership is increasingly rare and mobility is purchased as a service, both the consumer and the business would potentially be purchasing from the same mobility suppliers.
If we accept that convenience retail and services will increasingly revert to automated supply chains, where does that leave comparison retail?
The move to autonomous vehicles and Mobility as a Service is expected to influence travel in two ways. Firstly, it will provide a new level of mobility and access to current non-driving groups. And secondly, the actual and perceived costs of travel will fall as people are able to use their travel time productively.
With such low transport costs, some analysts have speculated about the strategies that retailers could adopt to capitalise on this technology. They could roll out the red carpet by dispatching their own driverless vehicles to bring customers to their stores. Or, just as they pay to appear at the top of the Google search engine list, retailers may choose to pay to appear at the top of the search list for physical destinations in Google cars. Or they could simply bring the showroom to the customer, e.g. by sending multiple models and sizes of a garment for a customer to try on in the comfort of their home.
Yet at the end of the day consumer preferences rather than technology per se will decide what happens. This does not spell the end of physical retail, but more likely a continuation of trend to experiential ‘retainment’, with comparison shopping as a social and leisure activity. With so much automation of everyday tasks, people will have more time for discretionary activities and a greater need for social interaction.
There is evidence of businesses actively marketing the ‘authentic’. For example, while the delivery of cheap take-away meals has become a mass commodity, other businesses now charge a premium to deliver the fresh ingredients required for consumers to cook their own meal. In a market saturated with efficient, but undifferentiated automated products, retailers will need to curate fresh and unique customer experiences.
With people willing to travel further as they can use their time productively, and no restrictions to the mobility of non-drivers including the asset-rich ‘grey pound’ generation, consumers will be more selective about their choice of destination shopping experience. This trend favours the larger malls (for quantity of choice) and attractive heritage town centres (for quality of experience).
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