How Self-Driving Cars Will Impact Real Estate

Once upon a time getting your driver’s license was a rite of passage. Just as car-sharing services like Zipcar have changed the need to own a car, autonomous cars may make knowing how to drive a car anachronistic.

At Metro we’ve been thinking about how self-driving cars will impact real estate, retailers and customers. Part of the conversation has revolved around self-driving cars with occupants, but commercially, the future for self-driving cars is really about fulfillment and delivery. Pizza Hut, for example, is exploring the use of a self-driving van that could function as a mobile store, a ride-sharing vehicle or delivery vehicle. Dominos Pizza is also looking into self-driving vehicles and has teamed up with Ford to develop a prototype and test their delivery concept.

Pizza delivery is just the beginning. We wondered how things might change if Wegman’s—which already has a delivery option in select areas—branded a fleet of self-driving cars for its delivery service. Where would each store fuel their vehicles? Would there be a designated section in the parking lot for self-driving cars? How would grocery orders be loaded into the vehicles? Curbside? Or would there be a special drive-thru area? Any one of these factors will impact how a site is developed—from a new circulation pattern in the parking lot to building a secure and loading zone.

What about retailers? Their business model will change as well. With fewer customers coming to the store, the actual look of the store may not be as important. But the vehicle, branded for that retailer, will be one of the channels that consumers interact with and will become hugely important. So, Steve orders a pair of shoes from Nordstrom’s Web site. His local Nordstrom’s puts the shoes in a self-driving car and delivers them to Steve; then the car waits while Steve tries them on. If they don’t fit, he sends them back. It’s (almost) instant gratification without visiting the store. Of course, retailers will probably rethink the square footage they need. And where they locate their stores.

Consumers will feel a shift as well. To lure Steve into their brick and mortar store, Nordstrom may have a self-driving car pick him up and take him home. They might offer him a special in-store discount or a curated shopping experience to further sweeten the offer. On the personal front if Steve has his own driverless car, the sky’s the limit. After the car drops Steve at work, it can run errands for him–like swinging by Wegman’s to get up his grocery order or picking up the dry cleaning.

However quickly or broadly self-driving cars catch on, we’re all going to feel their impact. On the highways, in the parking lots and in the towns and cities where we live. Congestion on the roads will likely become more of a problem. Finding a place to park all these autonomous cars might also be a challenge. Any way you look at it, America’s love affair with cars is going to be tested in some very different ways.

Copyright 2018 Metro Commercial Real Estate, LLC