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The amount of transport which is used in a country changes in lock step with its economy. The income elasticity which connects these two values is something greater than unity, meaning that transport needs rise somewhat faster than economic activity. As we - and bilions like us - get richer, so we spend a constantly increasing proportion of this wealth on travel. As the figure shows, we also spend about the same amount of our time travelling as we get richer, but we do it in more expensive ways.
We could expect transport demand to rise until regulation controlled it, or else until facilities were overwhelmed and the individual's time budget became over-stretched. People in Bangkok, however, may find themselves spending four to six hours a day locked in traffic.
Alternatives to travel have allowed us to do more, if not to mitigate our travel demand. The figure shows the relative amount of energy used to make a telephone call over a kilometre in contrast to, amongst other things, to travelling the same distance by car in a city. At first sight, therefore, the creation of electronic commerce should much lessen the transport and energy demand associated with shopping. We can call up for our goods, and one trip can service the needs of several customers.
There are obvious problems to this. The time saved may be used to travel for other reasons. The additional efficiency will generate wealth that will add to demand. And so forth. There are, however, less subtle issues. This text looks at what is really involved in retail e-commerce, and points to some radical long-term developments.
E-commerce has been most successful in two areas:
There are very real problems where the physical systems that are needed do not match the existing conduits. Consider e-retailing.
A member organisation looked at prospects for this in the early 1980s, as a form of renewal for their business. Goods were to be picked up from a gas station, around eight hours after an order had been placed, or delivered to the customer's home for a premium. What was entailed?
Home PCs were not much in evidence, and the Internet was still the DARPA-net. A 'home unit' was developed to receive radio and TV, play CDs and allow a wide range of CD-based shopping and edutainment. Assuming that the consumer bought these units - much as they have now bought home PCs - the remaining new activities and the associated costs are revealing. The physical infrastructure needed to service 2 million households nation wide in the UK, making two grocery transactions a week, would imply the funding of:
Whilst this sounds substantial (certainly, by contemporary internet start-up standards) the eye-watering costs (and environmental impact) came from the physical concomitants of this network.
Consider an order as it is placed. Once over the hurdles familiar to e-shoppers ("The recipe wants a pat of butter, not a packet. And where are tomatoes? Tonnes? Did I order tonnes!?) the order is accepted and payment terms agreed. Now the work starts.
The order is routed to the correct picking warehouse. (Which, not incidentally, has to organise its own look-ahead just-in-time stock flows.) The order must be segmented into ambient, chilled and frozen goods, and sorted for crushable, resilient and strong goods. In the warehouse, covering several tens of hectares, boxes roll about on conveyor belts, each being filled with a specific customer's good, by category and in the right order, to 99.99% reliability. (That is, one mistake every hundred orders in a typical once-a-week one hundred item order.)
A delivery system is scheduled in parallel. If the van is to go to the customer's home, then this must tie with other orders for location and delivery time. The van needs three compartments: for ambient, chilled and frozen goods. It has a droning compressor on top of it, fine for the brand image when domestic streets fill with them at peak reception time. The goods have to be packed in inverse order to the delivery loop: Mrs Jones's three packages in front of Mrs Lee's, as Mrs Jones is visited first. The driver needs to know what is where and who get what, and where they are, whether they have paid or will pay, and when they expect delivery.
Mrs Jones is not in. What to do with her boxes? Mrs Lee said that she wanted to pay cash, and she has no money except a credit card. She unpacks her boxes on the street, inspecting the goods. The crisps are squashed: she want these deducted from her bill and sent back. And so forth.
At the alternative collection point, all is havoc. Vehicles are piling back onto the main road at rush hour. Mr Jones thought that he was supposed to pick up the goods, and he is mad! They have six people to dinner that evening.
The physical equivalent of the internet may be slow in coming. Many studies of retailing reveal that:
On balance, e-retailing may well increase transport needs. The mathematics of this depend on many unknowns, such as the relative population of the time poor and the social shopper, the relative costs of various ways of getting goods and cost sensitivity of the various purchasers. It may vary between countries, locales, regulatory regimes and income brackets.
One model of shopping a decade from now, however, is the following. A customer can, of course, simply go to a shop. Many will pre-order the boring aspects of their shopping, perhaps by simply selecting the goods in question before leaving the store: these from my till roll, ticked on a list, selected on an interface, stored in a portable bar code reader. Others will order most of their purchase on-line, but come to collect or embellish this. They may, perhaps, use recipe 'books' to buy pre-assembled meals, perhaps by interacting with a television program. Released by this, stores will have less facing dedicated to commodity goods and far more to high margin exotica. There will also be home delivery (subject to regulatory, cost and convenience caveats, as above) and the delivery of goods to pick-up points near schools, gas stations, places of entertainment and shopping complexes.
A retail complex will tend to be out-of-town, something to which a customer drives or is - as we get older - taken. Complexes will stratify socially - young and old, safe and surprising, high and low income - and will offer less mall tat (as Socrates said of the marketplace: "How many things there are in the world that I neither want nor need.") There will be a blend of entertainment and leisure, shopping and service utilities, that varies with the demographic target, but which will be far richer than today. Much enhanced just-in-time - and pre-ordering - clear shelf clutter. Speciality outlets (boutiqued and sub-franchised, no doubt) will proliferate. The garden-centre-with-a-deli-and-a-cinema may also provide all your commodity shopping needs, prepacked in a neat box.
Naturally, our view of what constitutes a 'commodity' will have changed: a dinner party for six, with well-designed but disposable 'crockery', wine, flowers and napery, all pre-packed and ready to mix-and-heat, may well be tomorrow's pizza-to-go. The user may select this from a multimedia 'how to entertain' disk, or snatch it off the screen during a TV show, be e-mailed it by a cousin in Bulgaria or make it up themselves.
A decade beyond may see something quite new. One trend on city development is called 'densification'. Briefly, if work is increasing concerned with analysis and organisation, knowledge and other light features, than ever-more of it can be done close to where a person lives, is entertained, shops and is educated. Cities can become networks of villages, with reduced transportation, an intensified sense of community (perhaps) and lessened opportunities for crime. A critical issue is, however, how to supply small local shops so that they deliver the same level of choice as is found in contemporary hypermarkets: 20-40,000 lines. There are two answers to this: pre-ordering and much intensified just-in-time. We understand pre-ordering: "I want these things for certain, and I want one of these three sweaters, size 12. I also want it in the shop down the road, in four hours, and I may well send all of this back when I see it."
What is the physical concomitant of the internet that delivers this? Not, for certain, a myriad of white vans. In the larger cities, a new form of infrastructure may emerge.
Imagine a network of small - metre diameter - tunnels (or occasionally surface conduits) down which standard containers can be moved. The technology of tunnelling and package-moving is improving very fast. The software necessary to track the traffic, manage the 'packets' across the network without collision, schedule maintenance and the like is challenging but far from contemporary reach, let alone that of 2020.
Small-scale industry would 'post' off goods to their value network using the same technique. Perhaps solid refuse could also be moved safely, invisibly, underground. Whatever you want, provided that it is under 80cm across its major axis, could be whizzing its way to a basement within 200 metres of where you want it to be. A person with an electrically-powered trolley could deliver it to you personally, on demand, or you could find it in your shop or a host of additional possibilities. We are, perhaps, most limited by our will to imagine and to act.
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Links to Interactive Trek Guides sites for Peru and Nepal.
The trek Peru web site. The trek Nepal web site.