How E-commerce Affects Land Use — and How COVID-19 Affects E-Commerce

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Lisa Nisenson: My name is Lisa Nisenson. I'm vice president for new mobility and connected communities at WGI, which is a full-service planning and engineering firm. I am in the West Palm Beach office here in Florida, but we have other offices throughout the country.

Meghan Stromberg: And today, you're probably in your home office.

LN: I am. It's — I got a nice setup. I got to say [Meghan laughs].

MS: So today, of course, we're talking about e-commerce, which was a topic that Lisa Nisenson wrote for us about in the April issue of Planning magazine. And when we scheduled this interview, the context for it was a little bit different. We were just entering into the COVID-19 pandemic. And now, of course, so many things have changed. And of course, as we talk about e-commerce, we'll talk about the general challenges that planners are facing and need — and need to be thinking about. But we won't be able to help but slip into talking about what's happening in the world right now, don't you think, Lisa?

LN: I think so. And in fact, there's some valuable insights that kind of accelerate where the trend was originally going. So that will be an interesting discussion.

MS: Well, one of the things that has to have accelerated is the demand for goods via e-commerce, since so few of us are out and about. Have you been watching that?

LN: Oh, absolutely. So what we've seen happen is everyone going into almost an ordering economy for almost everything, whether it's restaurants, to actually help keep them afloat, to delivered groceries, to online ordering through e-tailers, and to small businesses, actually moving their platforms online where you can order. So it's very interesting to see how we were able to make that shift pretty quickly. But it remains to be seen, like, what it means for a longer period over the next year. And then, of course, post-recovery when, when we get an all clear.

MS: Absolutely. Lisa, your article goes beyond some of the aspects of e-commerce that Planning magazine and planners have already been talking about, namely freight and congestion, although that's somewhat covered. But really you focus on three main areas that planners should be thinking about. And I just wanted to go into some of those areas.

And a caveat for our listeners ahead of time: Lisa and I'll both try to be careful t— if we mention terms that might be unfamiliar, we'll try to remember to explain [Lisa laughs] what they are because this is a — such a rapidly changing field that new words for it are coming up all the time. So one of the first things you mention in the article, Lisa, is vehicle types. So what —

LN: Right.

MS: — kinds of new vehicle types are we seeing?

LN: So in the work that APA has been doing over the past several years, as we've paid attention to and begun to plan for the rise in e-commerce, we'll still have things like local delivery trucks, which is really the main way that we get different sorts of packages done or maybe meal delivery on bikes and in cars. I think one of the things that we're going to see is, as congestion rises in cities — and we'll get back to that — we could start to see groups like FedEx begin to move toward smaller, more nimble types of vehicles: electric, e-bikes, e–cargo bikes, that sort of thing. And that comes with a planning component. My interest has been primarily around what happens with automated technologies for vehicles such as air drones and then what are called ground drones or delivery box that looked like little coolers on wheels. And those are in testing phases now, mostly on college campuses to deliver meals. But each of those really are vying for space that planners pay attention to. The first one, of course, being sidewalk space, and we all know what's happening with curbside congestion and just the really growing demand for treating sidewalks like real estate. So they're part of placemaking and they're part of commerce and just part of our built system. And then the more interesting thing for planners is going to be, are we going to have to build skills in how to plan for airspace in 3D? So to me, that's going to be a big question. Where we are right now with these drones is they’re in pilot phases, usually just one at a time or a handful. But for planners, the big challenge is going to be what happens when these things are deployed at scale by multiple companies.

MS: Where, where are some of these things happening already, and are there planners who are getting out ahead of it?

LN: Well, there have been a lot of different pilots. So the most famous delivery bot pilot was at George Mason University in Fairfax, Virginia, where the delivery robots were used, and that one revealed something kind of funny in that all of a sudden the college noticed that kids were starting to eat breakfast. So whereas it was hard to get out of bed to go get a bagel, you could just summon one [laughs] to your front door. I don't know what impact that had on learning [Meghan laughs], but again, some of these things are going to start to change the rhythm of how people get goods and at what time and sort of — at their own leisure, what happens to patterns.

MS: Mmhmm. And I'm trying to picture what the — you mentioned the streetscape as real estate.

LN: Mmhmm, right.

MS: So it’s, you know, the curb is not just, you know, the edge of the traffic right-of-way. And the sidewalk, of course, is a right-of-way on its own. But there are businesses and cafes and pedestrians and bike lanes and all sorts of things really coming together at that one spot. Where do you see, for instance, air drones fitting in with that?

LN: So with the curbside, one of the innovations coming forward are delivery vans that are outfitted with drone launch pads on the roof so that you could have a delivery person drive up and deliver one package, but have the drones deliver two more. So, you know, one stop, three packages delivered. In urban areas, you'll have to have that coordinated with how the city deals with its airspace and its airspace restrictions. There will be no-fly zones, but in some cases there could be exemptions or even new designs so that you've got minimal intrusion of an air drone over public space. But again, that delivery van has to park along a curb somewhere. So you could see planners getting into the art and science of these flexible curbs that can be used for multiple uses. But of course, the automated delivery has its own complexities that come with it. And the same applies to the delivery robots, which are competing for sidewalk space. They go around 4 miles an hour. So, you know, they're mixed in with the pedestrians.

MS: I can't imagine. I mean, maybe I'll have, I'll have to start imagining it or maybe I'll just see it for myself —

LN: Right.

MS: But it sounds like the potential for collisions seems possible, the potential for people with disabilities having —

LN: Right.

MS: — fewer access options. Obviously, they're —

LN: And, and maybe they’re just not suitable for really crowded conditions. I would say that for some of the air drones, they could actually bring a multitude of benefits, especially in suburban contexts, where a delivery van that used to have to really run up a lot of vehicle miles traveled going house to house, all of a sudden could just park once and have staging areas where low-carbon drones are delivering to individual houses in a master planned communities. So then it begs the question, will planners become proficient in flight paths through site design? Because some of these air drones actually come with a lot of noise individually and especially when they're in multiples. So, so how do you actually keep the quality of living and the noise down for people in a residential or mixed-use community while being able to fly these zone — these drones perhaps on the periphery or in designated flight path zones?

MS: There's so many different possibilities to think of. And I &mdash have you been thinking about the possibilities of using these both air drones and delivery bots during our current situation? Are there — in this time when we're not supposed to be interacting with one another physically?

LN: So with COVID, we are seeing the real acceleration of these technologies, which have been in some deployment. You look no further than China, where some of the initial technologies were already going through evolution, but they were able to deliver supplies with what's called contactless shipping. And what that means is that you really eliminate or lessen the number of actual humans that touch the package. And I know that sounds a bit cold, but in this day and time with this virus, it becomes very, very important. And so some of the rural deliveries — some robots are actually beginning to be modified to deliver services, medical services. So patient care, taking temperatures, delivering meals. And in other cases some of these small autonomous platforms are being turned into small transit vehicle — well, they go into transit cars and disinfect them. And again, they're just reducing the exposure of some of these workers in high risk situations. And there's going to be a lot that we learn about the technology and its capabilities and whether or not we can have these different vehicles that are interchangeable on the fly. So maybe it's a delivery bot in the morning, but it's doing something else in the afternoon. I think here in America, we're a little bit farther behind. We have several regulatory layers that have not yet been figured out, even at the federal level. So what we may see is an acceleration and lowering some of those barriers that get some of these drones up and running sooner than later and in areas that may have not thought of them before.

MS: Is there any special advice you'd give to planners as they are trying to make room or fast track these technologies in order to deal with the current crisis but don't want to paint themselves into a corner once, you know, once we've moved beyond it in terms of what they will allow or won’t allow?

LN: Right. There's, there's a couple of things. And I think the first one is most of these are going to be regulated by permits. So it's wise to check with your office of general counsel to come up with permits that are time limited or that are associated with an emergency declaration. So there are some bounds on it that you don't regret later. And the other thing is, if you do these, make sure to collect the data so that you can go back and sort of compare before and after that. Speaking of data, I know that privacy, data, security, cyber-security, all these things, are top of mind, and it really has had an impact on micromobility where there is opposition to being able to collect rider data because it could be used to identify a person. I think that we are getting with this virus into a whole new world when it comes to monitoring and even surveillance, because we are going to have to track people who have been infected, who are uninfected, maybe who have immunity because they got a vaccine. Overseas they are actually getting closer to normal because they've instituted these regimes that are just really monitoring people all the time. And so our views of some of these privacy, security monitoring issues may soften a bit over time because we're just, we get used to the fact that we have to do this to beat this virus. With that said, I think we need to safeguard, just as we do now, some of the data that could be personally identifiable, that could be misused, that could open up security breaches. So we have to be vigilant. But we also have to understand that some of this is going to open up some data collection that maybe wouldn't happen now. I'm not saying this is good, bad, or indifferent. It's just, you know, as part — part of being a planner is just calling the shots like they're coming out, so I think the data is going to be really interesting. And then I also think that there are going to be some interesting revenue implications out of this. So, for example, in Oregon, they have a state-enabling legislation that allows any political subdivision that holds an easement, like a street or a sidewalk, they can lease that space above or below that street for private purposes. And I know that as things are changing rapidly and especially as local governments seek new funding sources, that ought to be 50 states allowing that sort of new collection of revenue because we're going to have to manage that space. And it is part of our transportation system.

MS: One of the things I am hearing from you, Lisa, is that things are moving so quickly, and never as quickly as these past couple of weeks, and it really takes a lot of careful thought and planning and preparation to make sure that you're able to move with the changes and stay ahead of them —

LN: Right.

MS: — particularly on the public sector, when it comes to crafting policies and regulations that help planners create the built environment that communities need, as opposed to letting the private sector dictate how things are going to go.

LN: Right, exactly. And so I think the other way I've been involved with APA is through the elevation of scenario planning. And so I think that a lot of what we need to do as these things come out is actually use some scenario and anticipatory planning just to kind of figure out, OK, what are the probable ways that this could unfold and then what are the performance markers we want to put? So, for example, if we fast track drone deliveries, is there a level at which there are things like packages being dropped where we just have to put a hold on the permit? You know, think ahead to things like overhead crashes, so that if two drones crashed into each other, then we stop at and we kick on to the next level of planning where maybe we do better airspace or we restrict it to certain areas of flight. So I kind of like that approach to it where you're working with the tech companies to say these are our expectations of performance. And what are ours? And let's just define this system, because it can start bringing benefits with these types of deliveries.

MS: Yeah, that's a great point, and in your article in Planning, you mention some of those partnerships that are currently happening, so I invite our listeners to give that a read and find out a little bit more about who is on the cutting edge of those collaborations. I want to shift gears a little bit, Lisa, and talk about another aspect that the article goes into, and that's some of the land use implications of e-commerce. Can you give us sort of a broad view of what kinds of changes we're seeing and then maybe you can tell us what the role of planners is?

LN: Right. And I give a shout-out to my colleague, Rick Stein, who has done a lot of thinking on this and to the University of Washington, cited in the article. Their freight lab is doing some excellent work and are an excellent resource. As far as land use is go, you know, if you open up your zoning code, you're kind of stuck in a decades old system of classifying. You know, you've got industrial warehouses and then you have retail outlets and there's just these very strict lines. And over the past decade, couple of decades, we've added things for, say, big boxes. Right? But now what we're starting to see, and this is all driven by one particular ambition of e-tailers, and that is getting you any good or service that you want in under 30 minutes. So if you think about going on Amazon, you know, we used to get excited about two-day delivery. And now in some places it's same day. And they really want to drive that down to something as soon as 30 minutes. And so in this quest to get you your food or your gadgets in 30 minutes, that means that things have to be within 30 minutes of you. So what we're seeing is a proliferation of smaller microwarehousing across the landscape. And so e-tailers are looking for opportunities to use space that are closer to their customers. You've also got big-box stores that are beginning to understand that they can compete with Amazon because they have so much existing real estate in their big-box stores. So they have been taking advantage of something called “buy online, pickup in store.” They do their own deliveries. And I guess the message I'm trying to lay out there is that the lines between what was a warehouse, what's a small warehouse, what’s a retail establishment, and what's a distribution center are all starting to blur. And so the stores aren't acting like we've always modeled them to act. And you've got to begin to understand that that is part of the reason we've got these different congestion flows or that even you've relieved congestion because our old assumptions really paid attention to shoppers on the weekends, for example.

MS: And I imagine it would have very different implications for things like parking. You don't need a mall’s worth of parking for a distribution center on an old mall site.

LN: Right. Exactly. But then you've also got some of these stores that are trying to build in different attractors and experiences — so food truck courts or their own music venues. These are big-box stores doing this. So your parking is going to get used, but for reasons that it wasn't assumed to be used. So a fifteen-minute trip to park may be a two-hour parking duration so that you go and you pick up your goods and you have dinner and maybe there's some entertainment.

MS: What do you recommend planners do to make sure that their communities are prepared for these shifts in land use?

LN: So one of the things that my firm has been doing is we, we partnered up with a data-science firm called Urban SDK, and they're kind of neat because what they do is they create dashboards where they start to aggregate different data so that you can monitor your system in the same way that bigger cities or maybe even highway agencies are able to have all this equipment to monitor their roadways. All of a sudden there's evolution in technology so that that same aggregation and cleaning up of data can happen in almost real time, so that it becomes systems that — we'll still have forecasting. Don't get me wrong, we're still going to have to do some of these forecasting exercises, but it relies less on our kind of outdated modelling assumptions, and it's more on being able to monitor and operate and adjust your systems in real time. And in that way, when an applicant, for example, comes in and says, I want to change the way I use my site and convert some of my parking to something else, instead of going back to the book that says, no, we're going to do things the same way we've done them for 60 years, you're able to maybe come up with some, some data-driven results that say, yeah, that that makes perfect sense. And that land now becomes part of your tax base. So it is in a city's best interest to help land owners really use their property to a higher value.

MS: Lisa, the conversation seems to be moving towards this third area that planners should be aware of, and that's the change in traffic impacts brought about by e-commerce. Can you tell us a little bit more about that?

LN: Right, and, and this is where the segue goes from, OK, if we're not going to act like everything in our rulebooks say they will, how are things going to start to be a little bit different? And I think this is where we need to be a little bit careful and measured, measuring and monitoring and tracking some of the changes that are going on. And, and one good example is if you live in a community that assesses traffic impact fees, for example, how do those formulas begin to change so that you can actually come to a number that is fair for the client or for the real estate developer, but also fair to the locality? And that's just one way that will start to trickle into a planner’s daily life in setting how we design a road, how we operate a road, how we set those fees, and really how we look at that street going forward as something other than what it's always been in the past. I also think that with traffic modeling, one of the more interesting things about e-commerce is that 30 percent of sales get returned, and 15 percent never make it into the hands of the customers. And our modeling for a real — retail store never imagined anything like that. And in the article, there's actually an example of how Kohl's has teamed up with Amazon. And if you start thinking about people being able to bring back things that they didn't get at Kohl's, but they're going to return at Kohl’s, how does that change the calculus of how we start looking at this traffic modeling? So I thought that was one of the implications that's really going to begin to have an impact in how we look at traffic flows.

MS: Absolutely. And are there planners who are looking at this now or are we at the very beginning of it?

LN: I'm sure there are planners looking at this now. And — but I think we are at the very beginning of this. So ITE, the Institute for Transportation Engineers, is constantly coming up with new ways to set your traffic and your parking demand models. But a lot of those are built on studies, and studies are really hard because you've got to get somebody out there or a camera out there. And again, this is where I think cities need to start looking at new technologies that will let you monitor in real time and collect that data that actually measures the flows that are going out there. So I really do see this combination of these new systems and new flows in our communities combined with new technologies that let us do our job better so that we can better manage our streets.

MS: Well, Lisa, I thank you so much for taking time to talk with us today.

LN: Well, thank you. I appreciate it.

MS: What a fascinating area of planning that will only continue to change. So hopefully we can catch up with you another time and you can bring your crystal ball back out.

LN: [laughs] Well, thank you. And again, I would like to give a hat tip to a lot of my colleagues who are working on this and to APA for covering it. And there are constantly resources being added and features being covered in the magazine and in other publications, so this is a group and community effort on behalf of our profession and the communities we serve. So I appreciate it.

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