This document discusses how retail and consumption behaviors are influencing the shape of cities. It begins with a brief history of how markets and trading places originally shaped cities, and how industrialization and technology changed this. It then discusses 5 trends influencing future retail: 1) people purchasing online after discovering products in stores, 2) product convergence, 3) rapid production/supply chains, 4) access over ownership through services/sharing, and 5) economic pressures changing shopping patterns. It envisions 3 types of future cities driven by these trends: 1) the "One-Line City" where people rarely leave home, 2) local "Micro Cities", and 3) global "Cloud Cities".
Apidays New York 2024 - Scaling API-first by Ian Reasor and Radu Cotescu, Adobe
Retail and the City
1. Retail and
the City
The shape of cities to come
Alexander Grünsteidl
alexander@method.com
digitalwellbeinglabs.com
twitter : agrun
Method 2013
I want to tell you a story about Retail and the City, about how our shopping and consumption behaviours are influencing the shape of our future cities.
It is a description of our future, for once not illustrated by the discussion of different mobility scenarios, nano technology driven organic architecture nor alternative energy
perspectives, but instead explored by imminent changes to the very basis, the markets, the shops and the supply infrastructure, that together make the fabric of our cities.
2. I hate shopping !
Method 2013
I don't like going shopping, strolling till my feet hurt, squeezing through people on busy streets, entering too hot for comfort department stores, being overwhelmed with the amount
of choice.
3. I love it !
Method 2013
I love shopping, it’s part of our culture, it is where our communities meet. Opportunity for surprise discoveries and fulling my wants and
desires.
4. my street
Method 2013
This is my street. Not a pretty image, not the glamour of regent street or the editorialised and polished neighbourhoods presented by Monocle.
No this is a street that has lost many of its core businesses like grocery stores, fashion shops, music vendors.
Instead these are replaced by Nail Studios, Barbers, Pound Shops, Payday Loan, Fast food outlets, Churches of divers nomination and many Betting shops.
I used to dislike this most ugly street, but started loving it by increasingly engaging with the local community. Engaging with the infrastructures that makes the fabric of our cities.
5. a brief history of
commerce
and the city
Method 2013
So how did this all start; “a brief history of commerce and the city”
10. Future Retail
2013
Method 2013
Products like woven textiles were produced in long rolls, transported to a remote store were a shopping assistant would cut of pieces, Tailler, were the word retail (and tailor)
comes from.
13. Method 2013
Railroads allowed economies of scale to emerge, enabled by linking cities and its people together over vast distances costing less time.
Providing transport of goods from farms and factories. As the cities grew the shape of the city remained internally the same and grew organically and mostly unregulated outwards
14. Mail order
catalog
Method 2013
With the invention of the mail order catalog people were for the first time able to browse at home order by post and receive the goods by
railroad.
16. Method 2013
... but the old city centres were not designed for cars and soon shops appeared on the periphery, turning the city effectively inside
out
18. Overwhelming Choices
Method 2013
The accumulation of goods in gigantic retail facilities leading to an overwhelming amount of choice satisfying wants and needs at any price
point.
19. Method 2013
We kept our hunter gatherer instinct, browsing for new glamorous items whilst window shopping.
With the arrival of the TV at home, the shopping window appeared inside the convenience of our living room, offering advertisements and product placement in shows and
products delivered from shopping channels, only a phone call away.
20. iPhone
10:15 PM
More
Method 2013
Soon we can point google goggles at any product around us to find best prices, comparison and recommendations and make a purchase there and
then.
21. We are turning any location into a store
Method 2013
In fact we can do this already with service like Shazam. Identifying songs and TV advertisements you are listening to and connecting you instantly to purchase the track or
advertised product. You now have the shopwindow, and music store in your pocket.
22. Method 2013
Shopping has become fragmented, without requiring any centralised retail places
anymore.
25. the last click
1
Method 2013
1. The last click happens when people encounter products on the high street or when browsing online, and then, after comparing prices online, purchase from the lowest offer,
often Amazon. No service fee is passed to the places along the discovery trail, who initially helped you to encounter and compare products.
26. fitting fee
Method 2013
Some retailers start asking for fitting fees, for example $25 australian dollar to try these ski boots on. People often try out and learn about products in brick and mortar shops, but
then purchase online. The 25 fee is the difference between offline cost to present and maintain stock in expensive city areas and the reduced online cost, keeping stock remote
and centralised cost optimised locations on hubs strategically placed in the infrastructure between cities.The fee will subtracted from the bill if the customer remains with the
retailer.
27. As consumption behaviours are
changing, only in-person services
including hospitality, can survive.
Niche offers that can do without
economies of scale are remaining
Method 2013
As consumption behaviours are changing, only in-person services including hospitality, can survive, on the high street. Niche offers that can do without economies of scale are
remaining.
28. Businesses on the high street
purchase
transactions
60% -
eating &
drinking
entertainment
grooming
40% +
Method 2013
In the coming years the proportion of entertainment, hospitality and grooming is increasing on the high street whilst the kind of stores that typically transact purely goods will
reduce.
30. maturation of technologies
audio quality
mature
display resolution
compete
computing power
broadband
develop
mobility & portability
concept
localisation
1960
1970
1980
1990
2000
2010
2020
the end of features
to differentiate products in shops
Method 2013
Most electronic and digital products went through rapid improvement in the past decennia. We have reached a point where the public can not differentiate the colour quality of a
screen, or the sound of headphones. These quality features were used to continuously market the new, the bigger, and better, but we have reached functional equality across
price points.
31. Method 2013
Instead software applications representing different features accumulate on multifunctional devices leading to total convergence of what used to be differentiated products.
note : products are not anymore defined by their features but through the (branded) content of the service they enable.
32. Multimedia Player
YM-P1 Samsung
Sat-Nav
TomTom
Tablet PC
HP Compaq 2710p
MP3 Player
iRiver Clix2
Weather Station Oregon Scientific
compact camera
Sony DSC-T300
Game Console PSP Sony
Mobile Phone
LG Prada
Photo Display Sony SFrame
LCD Television LG
Surface Table Microsoft
Method 2013
Only the difference in size and proportion of these interactive displays afford(enable) different context of use. Weather it is a projection on a wall, a mobile in your pocket or a
display on your wrist.
33. ... to the point, that a newspaper advertisement by John Lewis a few years back, showed a collection of similar black TV sets, differentiated by cost, requiring them to stick the
brand logo on top, amongst a list of product numbers and prices.
I am still not sure if this was meant to be sarcastic.
34. changing
production
& supply chain
3
Method 2013
3. Another factor has been the rapidly changing production and supply chain management enabled by improved communication over the
internet
36. Method 2013
Look around you. We now look all the same we did ten even fifteen years ago. A picture taken now compared to a picture fifteen years ago will be difficult to differentiate what year
it was taken. Compare this with clothing in pictures from the Eighties, Seventies and Sixties, when sometimes even the exact year can be determined, each decennia had very
distinct and memorable fashion styles.
Before the advent of the internet, fashion (and music) changed each year together with the seasons.
footnote : Elvis had about three period styles, Madonna had one style per album, Lady Gaga changes her style daily.
37. Alignment of development
and production process to
minimise risk
year 1
year 2
year 3
year 4
colour
trend
textile
print
weave
fashion
design
shows
production
distribution
Method 2013
It took a long while to communicate and transport goods between different locations involved in the fashion production process. Agreements over production quantities had to be
made long in advance to make sure that all components would reach assembly and distribution at the same time. It was a necessity to predict the next fashion trend in order to
manage and reduce the risk of up front production investment. In the first year trend agencies would come up with colour recommendations, which were picked up by the textile
industry to produce new prints and weaves. These in turn were used in the third year to be presented at fashion shows, before production and distribution to shops in the fourth
year. A mistake to predict a trend, was very expensive, therefore it was best to coordinate fashion trends across the industry, creating more coordinated seasonal looks.
38. Now risk is mitigated by
eclectic recombination
of styles.
Method 2013
Now risk is mitigated by eclectic recombination of styles. Companies like ZARA claim to develop garments from design to arrival in their stores within 3 weeks, treating certain
garment lines rather similar to car platforms, enabling them to rapidly apply slight differentiation in reaction to weekly fluctuations in market demand.
39. MR. GUGU
& MISS GO
£25
HYPE.
£25
YrStore.
£45.
Method 2013
... As can be seen in this example from three different stores at The PopUp shopping mall BoxPark Each are seemingly unique pieces, but part of an ever increasing eclectic
global style. Anything can be combined with everything.
40. plenty of choice
with
little variation
Method 2013
We live in a world with plenty of choice and with little variation
41. From ownership
to access.
4
From products
to services and
collaborative consumption
Method 2013
From ownership to access. From products to services and collaborative consumption. The fourth indicator describes how we have less need to go and purchase products in
shops, when instead we pay to have access and use them.
42. We’ve moved into the experience economy
Retail
as we know it
Experiences
Services
Goods
Commodities
Starbucks
Brewed coffee
Packaged coffee
Coffee beans
Based on the work of Joseph Pine and James Gilmore in “The Experience Economy”
Method 2013
We’ve moved into the experience economy. Initially retail of a commodity like coffee happened direct from bulk bags at the grocers, before the first packaged and branded goods
were placed on self service shelves. The margins could be improved by preparing brewed coffee whilst now we expect complete experiences providing comfortable environments
to meet over a cup of coffee and a sandwich or dessert.
43. Once products don’t differentiate enough
to provide status, then the value of
ownership reduces.
Seamless access and time saving
services become more desirable.
We are on the brink of a sharing
economy.
Method 2013
Once products don’t differentiate enough to provide status, then the value of ownership reduces.
Earlier we saw how product features increasingly show less differentiation across price points. Instead services that offer personalised and seamless access to content, and save
time to consume more, become more desirable. There is in fact less need to go to shops as instead of purchasing products to own we sign up and subscribe to service that give
us access to convenience (transport, mobility, content)
Common products, seldom used, can be easily shared ....
44. Method 2013
Examples are car sharing services like ZipCar, room sharing with AirBnB and tool sharing with Ecomodo.
45. As consumption behaviours are
changing, only in-person services
including hospitality, can survive.
Niche offers that can do without
economies of scale are remaining
Method 2013
As consumption behaviours are changing, only in-person services including hospitality, can survive, on the high street.
Niche offers that can do without economies of scale are remaining.
46. Businesses on the high street
purchase
transactions
60% -
eating &
drinking
entertainment
grooming
40% +
Method 2013
In the coming years the proportion of entertainment, hospitality and grooming is increasing on the high street whilst the kind of stores that typically transact purely goods will
reduce.
47. economic pressure
changes
shopping patterns
5
Method 2013
economic pressure changes shopping patterns : economic pressure, for example after the 2008 crash, when the cost of transport increased, the cost to reach a shopping mall,
away from where you lived increased, shopping patterns shifted rapidly in response.
48. The weekly shopping trip is
becoming too expensive.
People are fed up with traffic
jams and cost of transport.
Method 2013
The weekly shopping trip is becoming too expensive. People are fed up with traffic jams and increasing cost of transport.
49. Top up shopping
Method 2013
New shopping patterns emerged and the supermarket chains were quick to react, offering Top Up shopping outlets back inside the local communities. People now only buy
essentials in bulk every once in a while and then and instead top up daily requirements as need arises. Smaller versions or supermarkets, targeting local needs, are taking over
vacated stores on the high street again.
50. Markets and trading places
shape our cities.
If the requirements for these
are changing, how will
changing business models
affect the shape of our cities ?
Method 2013
Markets and trading places shape our cities. If the requirements for these are changing, how will changing business models affect the shape of our
cities ?
51. a tale of
three cities
Method 2013
I am going to tell you the story of three cities, each driven by a distinct technology trend defined by our shopping and transaction behaviours affecting the supply chain
infrastructure which in turn shapes our cities.
53. Hikikomori
Method 2013
The One-Line City is characterised by people living solitary lives in front of computers at home; They shop at home, consume at home, make a living at home, make love at home.
In Japan this trend is known as Hikikomori (pulling inward, being confined) Estimates consider that about 1 percent of the Japanese population live solitary Hikikomori type
lifestyles.
54. online ecommerce is still growing
online entertainment is growing
single households are spreading
cost of mobility is increasing
Method 2013
Online ecommerce is still growing, online entertainment is growing, single households are spreading, cost of mobility is increasing.
55. Tipping point
Even a small reduction in
transactions, around 10%, is
often enough to close many
independent shops on the high
street.
Method 2013
Tipping point: Even a small reduction in transactions, sometimes just 10%, when customers move their business online to competing offers, is often enough to close many
independent shops on the high street ... once shops vanish, the need to visit public places reduces even more.
56. Tipping point
Improved TeleConferencing
technologies and increasing cost
of international business travel will
lead to collapse of airlines .
Method 2013
Tipping point : Improved TeleConferencing technologies and increasing cost of international travel will lead to collapse of airlines through loss of business travellers ... reducing
the opportunity to travel.
57. the google glass world
Sight : Israeli filmmakers Eran May-raz and Daniel Lazo
http://vimeo.com/46304267
Method 2013
This is an interesting example of a google glass world made of few real products. Instead everything from wallpaper to album covers, flowers, photo albums and immersive games
is superimposed as an augmented reality. Furniture and walls are instantly re-decorated to reflect current desires. Dating becomes a game embedding the real date in a virtual
aura of Facebook information.(Sight : Israeli filmmakers Eran May-raz and Daniel Lazo <http://vimeo.com/46304267>)
58. the google glass world
Method 2013
People start wearing implanted ‘Sight’ lenses that overlay the world with a both augmented and immersive reality.
59. the google glass world
Method 2013
Most aspects of daily life including preparing meals and wearing clothes is gamified.
60. Method 2013
People live in empty spaces where all furnishings, decorations and media are superimposed on blank surfaces.
61. the google glass world
Method 2013
Facebook like information provides a virtual aura of continuous information about people and commercial transactions are seemingly integrated through embedded gamified
services.
62. we live in an intimately
connected world
Method 2013
We live in an intimately connected world.
63. Method 2013
We foster online and virtual relationships, with virtual gifts from a virtual store, representing new perceptions of
value.
64. people eat more and more
pre-cooked meals
PBS The New York pizza delivery path of one Domino’s employee
Method 2013
People eat increasingly pre-cooked meals at work as at home, even as TV cooking channels which should encourage home cooking, rather become advertisements for
restaurants or product placement of gadgets and readymade ingredients by their celebrity chefs.
This data visualisation shows the movement of Domino Pizza delivery employees on a Friday night in New York.
65. UBER & GOOGLE
Method 2013
Recently Google bought UBER, a taxi service similar to Hailo. They aim to improve the courier services hoping to develop autonomous robotic delivery systems in the near future.
This will even more promote home consumption.
Amazon experiments with robotic delivery drones.
66. We may start producing some
products on demand at home.
We may start producing some products on demand at
home.
Method 2013
67. make money online?
- Sell Stock Photography
- Tweet For Sponsors
- Blog for Ad Revenues
- Sell Affiliate Products
- Write an e Book
- Become a Virtual Assistant
- Lease Your Skills
- Selling on eBay
- Become A Mobile App Tester
- Become a Mechanical Turk
- Flip domain names
- Do online surveys
- Transcribe audio
- Edit audio, images, video
- Enter contests
- Create a virtual store
- Do webinar marketing
- Build and sell an app
- Sell your music
- Become a freelance designer
Method 2013
Making money from online jobs has not proven to be too profitable yet.
You could try blogging for Ad Revenues, becoming a mechanical turk or build and sell your own apps.
68. energy is created and used where it
is most cost effective and lowest
environmental impact.
Method 2013
Energy is created and used where it is most cost effective and lowest environmental impact: These online communities require vast amounts of computing power which in turn
consume considerable amounts of energy.
Facebook has set up a server farm, at the outskirts of a supply infrastructure, across the arctic circle to use natural cooling to reduce energy cost to disseminate the heat.
69. the Oneline City
Method 2013
The model of the OneLine city is build around a backbone of a single supply corridor to individual households, facilitating high resolution conference communication services for
online business, immersive entertainment, instant love-life, any form of consumption at home. There is little need for mobility left apart from the supply corridors, and even those
may be superseded by airborne delivery drones.
70. history has shown that cities
formed around organically grown
infrastructures, creating optimal
cost effective connections
between production, trade and
consumption
Method 2013
History has shown that cities formed around organically grown infrastructures, creating optimal cost effective connections between production, trade and consumption.
MIT are using mobile phone data to establish how peoples' locations and traffic patterns can be used for urban planning. As people are moving less, urban planning might require
a lesser spread of buildings.
71. Slime mould
Emergent
Infrastructures
Method 2013
An experiment with Slime Mould demonstrates that a network of mould grown between cornflakes laid out on a map of tokyo matches the real world patterns. We can infer from
this an optimal lay out for a future city based on the optimised placement of supply hubs.
72. the Oneline City
Method 2013
The online city will be characterised by corridors connecting distribution hubs, proximity to the corridor becoming a premium, removing the need for in between urban
spaces.
73. Road Town
1910
Method 2013
Examples of linear cities, like Road Town by Edgar Chambless, appeared in the early twentieth century, embedding transport infrastructures for trains and cars within buildings
snaking through the countryside, allowing farms and nature to reach up to the apartments of its citizens.
75. linear city concepts are mostly based
on providing more space for nature
to recover.
Method 2013
These original concepts are based on a desire to be closer to nature. One of the many versions of a Garden
City.
76. the Oneline City
Method 2013
I believe these city structures could emerge, but these will rather be commercially driven, cost optimised supply routes between distribution hubs to supply individual households.
78. online social networking tools
improve communication
on a local level.
Local enterprises can reach out,
advertise and create a dialog with
their immediate neighbours
Method 2013
Online social networking tools improve communication on a local level.
Local enterprises can reach out, advertise and create a dialog with their immediate neighbours
79. Coffee shops everywhere
communities require places to meet
Method 2013
An online search shows clusters of results across the map of London? These represent the 5000 (and growing) coffee shops across London. These mostly emerged, curiously
together with the arrival of the internet. It shows that communities need places to meet.
80. community meeting places
Method 2013
Provide facilities for in this example Bicycle communities to meet and exchange news and
ideas.
81. Alternative forms
hospitality
Bike repair + cafe
Bookstore + cafe
Bookstore + restaurant
Fashion + bar
Laundry + cafe
Bank + design shop
Bank + work lounge
Barber + nail studio + money transfer
Internet + cafe
Method 2013
Alternative forms hospitality Bike repair + cafe, Bookstore + cafe, Bookstore + restaurant, Fashion + bar, Laundry + cafe, Bank + design shop, Bank + work lounge, Barber + nail
studio + money transfer, Internet + cafe
82. Local Currencies
to incentivise local economies
Method 2013
Local currencies offer a way to keep money inside communities and incentivise local economies.
83. Local Businesses and Retail
with low start up costs
Pop-Up Mall
Future Retail
2013
Method 2013
Innovative low-cost-of-entry retail formats, for example the BoxPark popup shopping mall in London, stimulate local retail by allowing businesses to try and learn about their offer
and value model, before committing to more permanent solutions.
85. local retailers
find low cost places to trade
Method 2013
There are now more farmers markets than Wallmarts in the
USA
86. connecting communities
with their resources
Method 2013
It’s a growing trend of communities to connect with fresh and local production.
A desire to grow food locally and recycle the waste from the community
88. Vertical Livestock Farming
PigCity
mvrdv.nl
Method 2013
MVRDV, a Dutch architectural practice, took this idea to the next level housing pigs in high rise farms.
According to their figures and a back of a napkin calculation, we’d require about 85 towers the size of the Shard, a 300m Skyscraper in London, to supply the amount of pigs
consumed a year in London.
89. Urban energy generation
Wind & Solar Farms
Method 2013
There is a drive for community generated energy from city based wind & solar farms and the local Bio-Degradation of
waste.
90. the Hyper Local City
everyone ...
is a producer of goods
offers services
is a trader
Method 2013
In the Hyper Local City everyone is a producer of goods everyone offers services, everyone supplies energy, everyone is a trader, together contributing to the local
community.
91. Circular
Urban
Utopias
Method 2013
Circular urbanities have been part of Utopian dreams since Thomas Moore, or Auroville planned in the Sixties in India, and the yearly temporary city of of Burning Man, with an
agora and market in the middle to bring the communities together.
92. the Hyper Local City
Method 2013
The Hyper Local City is a fragmented city of self sufficient communities, with little need for economic exchange with their adjacent localities. Our current cities may fall apart into
smaller, low energy community clusters of high-rise constructions within walkable distances.
94. Broadcast media, like Radio and
TV and now the Internet, connect
people across vast distances
leading to global cultures.
Method 2013
Broadcast media, like Radio and TV and now the Internet, connect people across vast distances leading to global
cultures.
96. Global Life Styles
Method 2013
These tribes stay in touch through social media like Facebook and Pinterest, reinforcing their shared likes, becoming increasingly similar.
97. Identical Shopping Malls
offer a limited set of global brands
Method 2013
We see identical shops around the world in airport malls, making it less interesting to travel in the first
place.
98. Off-the-shelf shopping centres
offer places for shared experiences
Method 2013
For example the Westfield shopping malls around the world are made of an identical mix of global brands providing spaces for shared
experiences.
99. Nespresso Club
Brand Experience Communities
Future Retail
Nespresso club is an example of this
community...
2013
Method 2013
100. Shared aspirations
Method 2013
... Coffee is a commodity, but differentiated through the experience of meeting with friends and discovering together new tastes. Whilst the actual purchase of replacement coffee
capsules happens online.
101. Aspirational Living
Parndorf, Austria, Designer Outlet
Method 2013
Aspirational living: Around world similar looking malls appear, aspiring to a romantic notion of the past. This is the Parndorf Designer Outlet, in Austria, conveniently located
between Vienna, Bratislava in Slovakia close to the Hungarian border, but it as well could be in Kuwait, United States or ...
103. Gated communities
control lifestyles
based on shared aspirations
Method 2013
And finally gated communities spring up globally, dictating the lifestyle, type of house car and type of stores available to the community, fuelled by shared
aspirations.
104. the Aspirational City
Method 2013
The aspirational city is characterised by self re-enforcing social likes and recommendation feedback loops, that remove any variety. whilst the tribes go out to experience brands
and purchase souvenirs to keep a memories of a great day out.
105. AirBnB neighbourhood branding
Method 2013
Third party services. like AirBnB, the largest hotel chain without owning any property, start branding neighbourhoods rather than being constrained by the borders set by councils
and governments
106. the Aspirational City
Shoreditch Hoxton
Regentstreet
Westfield
Westfield
Borough
Battersea
Method 2013
The Aspirational City is around us
107. the Aspirational City
Method 2013
In fact the aspirational city is not limited to one geographical location but is spread around the
world.
108. oneline city
hyper-local city
aspirational city
Method 2013
I‘ve told you the story of three quite different cities, each shaped by following one recent technology and internet infrastructure driven trend, defined by our shopping and
transaction behaviours.
The One-Line City looking at a future consumed at home
The Hyper Local City describing thriving connected neighbourhood and
The Aspirational City made of similar lifestyle zones around the globe.
None of these cities will exist on its own, but aspects will be noticeable soon in future urban areas.
109. The future city is up to you;
The choices between your day
to day online and offline
transactions,
not a master plan,
will shape the cities to come.
Method 2013
The future city is up to you; The choices between your day to day online and offline transactions, if you purchase online at Amazon or local at your farmers market, not a master
plan, will shape the cities to come.
110. Thank you !
Alexander Grünsteidl
alexander@method.com
digitalwellbeinglabs.com
twitter : agrun
Method 2013
Alexander Grünsteidl leads the Interaction Design team at Method in London, where he designs products and services by re-imagining business models and customer
experiences.