Autonomous vehicles will create unique opportunities for shopping centers by reducing demand for parking and enabling more diverse land uses and increased density.
Parking and Redevelopment Opportunities
As emerging leaders in self-driving car development such as GM, Waymo and Daimler-Bosch make strides towards launching vehicles with Level 4 automation, companies around the U.S. are working to envision how autonomous vehicles will affect their industries. For neighborhood and community centers, autonomous vehicles will transform the built environment by reducing the need for large permanent parking fields. For a typical convenience retail property, parking and vehicle circulation may occupy 75% of the land. As self-driving cars become more popular, customers will rely less on personal vehicles. Instead, autonomous vehicles will ferry some customers to and from shopping centers, reducing the demand for permanent parking. Additionally, autonomous vehicles should use available parking more efficiently. As a result, demand for parking should moderate. Local jurisdictions may wish to change regulations, thereby increasing density, enabling mixed-use projects, and increasing the local tax base. By creating new leasable area and setting the foundation for a more immersive environment, autonomous vehicles will revolutionize the way we design and use neighborhood centers. “As the owners of over 50 million square feet of land in terrific trade areas in the United States, we are excited about the positive impact our real estate and surrounding communities can derive from the autonomous vehicle revolution,” said Alex Nyhan, Co-President of First Washington Realty (FWR).
Convenience and Consumers’ Relationship to Shopping Centers
Autonomous vehicles will also remove friction from the shopping experience. AVs have the potential to increase accessibility for customer segments that may be less mobile and to create the ultimate shopping convenience for sought-after customers. Transportation to any destination will be possible without owning or renting a car; it will be quick, seamless and cost effective. AVs should offer a superior convenience value than today’s Uber and Lyft: no wait time, no phone calls, and no confusion over a rider’s location. Imagine a world where the car immediately knows when you are leaving the store and is ready and waiting curbside. If more shoppers use autonomous vehicles to get to shopping centers, those consumers will be likely to associate the ease and convenience of their ride to the property with their overall experience at the shopping center. For companies like FWR that specialize in convenience and necessity oriented shopping centers, the evolution of self-driving cars will lead to an improved shopping experience, increased customer visits and retail sales, and more valuable real estate.
The rise of autonomous vehicles will undoubtedly change the way we perceive, design, and interact with shopping centers. Leaders in commercial real estate are already planning for the future and conceptualizing original ways to adapt to upcoming changes. First Washington Realty is currently developing plans to work with autonomous vehicle manufacturers and design professionals to create better and more productive retail environments geared towards the future of transportation.