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Sito involved in studying the impacts of online retail for urban areas

Sito has been involved in drawing up the first large-scale report on the impacts of online retail. Several reports had been made earlier on online retail, with the focus on a specific subarea, sector or product group. Clear overall surveys on online retailing and its impact had not been made in Finland or elsewhere, for that matter, so this report was almost the first of its kind in the world.

Digitization of commercial operating models

The report highlighted the fact that there is no use examining online retailing as a separate new phenomenon, but it should be seen as part of more extensive digitization of commercial operating models. Online retailing is also a natural step in the development continuum of mail-order business. One of the conclusions drawn on the basis of the report was that there will be demand for good retail locations even in the future. It is not believed that the growth of online retailing would threaten the status of the best shopping streets in city centers or big shopping malls.

Online retailing sets higher requirements on the quality and customer volumes of physical retail premises. The role of ideally located stores in particular as part of the store’s brand continues to grow. In the future, individual retail premises and small companies will become increasingly linked as a network of collection points, which will simultaneously increase the amount of collection points. In the future, clear-cut retail premises will be replaced by other functions when restaurant services and mail service points are associated with, for example, a grocery store.

In urban areas, online retailing functions most efficiently in densely populated areas. Logistics operators will network to offer joint services to online retail operators, since small delivery volumes, tailoring of products and express deliveries will increasingly challenge the efficiency of logistics in the future. From the viewpoint of logistics, the last few kilometers constitute the biggest cost-efficiency challenge for delivery, which will further increase the amount of collection points. The rapid delivery times in online retail trade cause development pressures on urban logistics.

The perspective of land-use planning

From the perspective of land-use planning, the operating models of multichannel commerce emphasize the importance of good locations in the urban structure. Online retail alone does not favor motoring, public transport, cycling or walking as such, but it rather tends to strengthen the prevailing trends. Even in the future, well-developed downtown areas and centers that offer a diverse mix of different operations will attract people. However, thanks to new delivery methods, in the future, people do not necessarily need to do business in less attractive areas. The more functional, easy to reach and pleasant the environment produced by urban planning is, the better chances it has of staying that way.

The report was financed by the Finnish Transport Agency, the Finnish Transport Safety Agency Trafi,  the Helsinki Region Transport (HSL), the Helsinki-Uusimaa Region, the Ministry of the Environment, and the City of Helsinki. The survey was carried out by a project group with Raisa Valli (Project Manager) from Sito, Olli Jokinen, Ilkka Salanne and Iida-Maria Seppä from Sito Oy and Jori Heinonen from Realprojekti as members.

Online retail in urban areas >>