How cities can anticipate the e-commerce boom

E-commerce – better known as online shopping – continues to gain in importance. The sector grew 16% last year and is forecast to grow another 12% this year. That has become obsolete the 5% growth typically seen for brick-and-mortar retail and e-commerce Share of total retail trade is expected to reach 24% by 2025. Global urbanization is also set to increase, fueling the population clusters that make e-commerce thrive.

It is about the infrastructure and the general quality of life in cities. The underlying problem can be summarized as follows Last Mile Problem—Goods need to be transported from large out-of-town warehouses (where they have relatively little impact) to a customer base concentrated in urban centers. As Xiahnzeng Fang writes for the urban planning blog Practical visionaries, “The demand for supplies – which used to be concentrated but is now spreading across the cities at any time of the day – is massive and growing. It will inevitably bring some traffic problems, such as B. Traffic congestion, the lack of available parking spaces for vans and even some fatal accidents.” Environmental issues such as increased runoff and air pollution are also a concern.

Luckily, the market is already responding, with innovations ranging from the obvious and practical to the completely unconventional. Here are some examples.

Micro Fulfillment Centers

The typical image of a “fulfillment center” is a huge warehouse on the outskirts of town built by companies like Walmart or Amazon. But now merchants are acquiring smaller “micro-fulfillment centers” in cities. They are typically less than 10,000 square feet (compared to the more than 300,000 square feet common for regular warehouses) and can be purpose built, sometimes adjacent to existing retail stores.

The genre was particularly notable for food deliveries. upstart companies use micro-fulfillment centers called “dark stores” to provide groceries but do not host customers in-store, instead delivering goods off-site. The premise is to enable fast delivery of perishable food. An example of a company using these centers is GoPuff, which has been in operation since 2013 and initially targeted colleges. Another is Getir, a company that promises to be “at your door in minutes.”

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The growth in fast delivery is doubtful since multiple companies have gone out of business and the above have had notable public struggles. But micro-fulfillment centers seem like a viable idea as they would reduce VMT, speed up delivery and reduce shipping costs for the end consumer.

Alternate Vehicles

The last mile problem is bringing e-commerce goods home from fulfillment centers. This requires the use of large delivery vehicles, which create the externalities mentioned above.

The answer from one company that has caught UPS’s attention is electric and bicycle vehicles. Fernhay began development of the pedal-powered motorized vehicles in Ireland, supported in part by government grants. The 10-foot vehicles can reportedly operate within roughly the same space constraints as bicycles. In 2020 UPS announced that it would acquire a fleet from Fernhay, although no information is available on their deployment.

In any case, such vehicles could lower emissions, reduce congestion and make collisions less deadly.


Drone delivery has long been the subject of research and speculation. March 2022 McKinsey and Company observedOver the past three years, over 660,000 commercial drones have been delivered to customers, not counting countless test flights to develop and test the technology.and Companies keep testing them. For example, Amazon recently experimented with such deliveries in the UK announced a pilot in a rural town in Central California. Google conducted its own, albeit severely limited, test flights in Virginia.

Approval ultimately depends on approval for Part 135 clearance, a regulation of the Federal Aviation Administration that governs commercial drone operations. Corresponding The roadie subsidiary of UPSThe agency updated its rules in late 2020 to remove time restrictions on drone flights over populated areas, as long as the vehicles and operators meet certain qualifications.

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If those permits are granted and e-commerce companies are able to bring working drone models to market, it would be yet another technology that offers a less onerous, greener way of transporting goods.


An even more speculative innovation than drones is a pneumatic tube system. A company called Pipedream envisions one where drivers take goods to different drop-off points and then insert them into a pipe system that delivers to nearby homes. CEO Garrett Scott said via twitter that the company believes it can make deliveries in “single-digit minutes.”

Again, this would be an alternative that reduces the VMT, carbon emissions and class-level safety risks now posed by trucks. Of course, at this point, given the intricate nature of the underground right-of-way, it seems like something of a “delusion,” to use a phrase. Pipedream’s ability to build this system would likely require the purchase or leasing of land from any number of private and public actors who own it – no easy feat.

Intelligent parking equipment

In the short term, parking pricing is the more realistic way to reduce congestion and double parking caused by e-commerce deliveries. Smart meters are able to provide accurate billing based on a variety of conditions, encouraging drivers to reduce the time they spend at the curb. she can bill via telephone numbers or car license plates in order to enable the smoothest possible payment.

While most smart meters aren’t aligned to the “minute” timeframes desired by delivery trucks, they might be. Pebble, which is under the umbrella of Google’s Sidewalk Labs, uses sensors to do this Provide loading zones with dynamic prices.

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Data on space availability in these zones could enable real-time reservations or redirect drivers to a nearby zone when another is occupied sidewalk labs post on medium.

car engine is another company developing curb management technology for cities. The aim is to charge drivers who park at the curb without having to download an app.


This list is incomplete. Other technologies could help cushion the impact of the e-commerce boom, from transponders making toll roads easier to operate to “smart” delivery vehicles reducing accidents.

Most of these innovations are met with resistance. Fulfillment centers (be it micro or macro) have seen a backlash to NIMBY in the neighborhood, as have housing projects. Other innovations, such as drones, tubes and minute-by-minute curbs, will require more complex dialogues than before from city governments about the proper use of right-of-way. Making room for alternative modes of transport may mean reducing space for vans – a result that is good but politically difficult.

The best governments can do is remain open to such conversations and to new companies that come up with out-of-the-box solutions. The pace of innovation in the private sector has allowed us rapid on-demand delivery from the start. Continuous innovation, along with governments embracing it, can help repair some of the collateral damage from this shift to e-commerce.

This article was co-authored by Market Urbanism Report Content contributor Ethan Finlan.