Three long term trends in technology and consumer behavior – the rise of e-commerce, the growth of the experience economy, and work-from-home – are having an outsized impact on reshaping our cities. In order to remain relevant, cities must be adapted to embrace these new realities. Autonomous experiences – a class of activities emerging in direct response to these trends – use technology to repurpose existing physical infrastructure to better match how people live today.
The Rise of E-Commerce
My apartment building in Brooklyn has an entire room on the ground floor dedicated to accepting packages. The building’s management regularly sends out emails to residents imploring them to pick up their packages each day to prevent overcrowding. Overflowing package rooms have all but become a staple in big city apartment living.
In cities, there’s a long-term trend towards increasing retail vacancies due to the rise of e-commerce. As more spending shifts online, traditional stores selling tangible goods have found it more difficult to make ends meet. U.S. Census Bureau data shows that roughly 15% of all retail sales are made online; a decade ago it was a little over 5%. The pandemic only accelerated this shift. This evolution sets the stage for the rise of experience-based concepts taking over physical urban space.
153 million Americans, or 65% of American shoppers, have an Amazon Prime account. According to Statista, retail e-commerce revenue in the U.S. will be $904.9 billion in 2022, up 63.9% from 2019.
Retail E-Commerce Revenue
These days, if we can buy it online, we probably will – it’s cheaper, more convenient, and there’s greater selection. What you can’t buy online, however, is experiences.
At PingPod, we believe that the urban retail spaces where we used to buy goods will be repurposed for experiences.
Growth of the Experience Economy
According to a recent study, 74% of Americans prioritize experiences over goods/products – and this preference is even more pronounced in younger generations. Research has shown that experiences bring more lasting joy than goods. As Thomas Gilovich, a psychology professor at Cornell, eloquently writes, “You can really like your material stuff. You can even think that part of your identity is connected to those things, but nonetheless, they remain separate from you. In contrast, your experiences really are part of you. We are the sum total of our experiences.” Experiences are also more shareable (via social media or other means) than goods. Who wouldn’t rather share pictures and video of their honeymoon than the microwave they received as a wedding gift?
AirBnB was early to this trend back in 2016 when they expanded their business to offer experiences: “unforgettable activities hosted by locals. Their messaging is clear: they value experiences that are active, memorable, local, and community-based. The pandemic temporarily paused the expansion of the experience economy, but it has bounced back strongly. Restaurant spending has recovered to pre-pandemic levels, and air travel is following suit.
Consumer preferences for experiences over goods – taken together with the rise of e-commerce – supports the hypothesis that urban retail spaces where we used to buy goods will be repurposed towards experiences.
Work-from-Home: Remote and Hybrid Workplaces
I joined a San Francisco headquartered company at the beginning of 2020, with the expectation that I’d help open their New York office. Then the pandemic hit – and like so many others, my company initially became fully remote, and eventually settled into a hybrid model. While this would have been unimaginable before 2020, it appears that remote and hybrid work are the new reality for a significant percentage of the population.
According to the US Census Bureau, the number of people primarily working from home tripled from 5.9% of the labor force in 2019 to 17.9% in 2021. According to another study, 97% of remote workers would recommend remote work to others, while 72% of companies are planning on permanently allowing some amount of remote work. 59% of those polled said they prefer working from home, citing flexibility of location and working hours, as well as saving money on commuting and meals, as some of the top benefits. What people miss most, however, is feeling connected to co-workers.
Remote work has the potential to change both how we work and how we live. Loosening the constraint of geographic proximity allows us to rethink where we choose to live, how we spend our time, and how to manage family dynamics. But how will this impact cities over the long term? Will they lose their privileged position as centers of industry?
There is evidence of net migration from the largest and most expensive cities in the U.S.. In real estate circles, “office is the new malls” is an emerging description of the trend – meaning work-from-home is having the same effect on office properties that e-commerce did on malls. Whether this is a short-term pandemic-induced blip or a long term-trend, cities must adapt to the new realities in order to remain relevant. Tech-enabled real estate will be table stakes for companies that want to attract younger, tech-savvy employees back to the office.
Reshaping Urban Spaces
PingPod’s autonomous experience operating model aligns with all three of these trends by using technology to repurpose existing physical infrastructure to better match how people live today.
A PingPod is a place for all who crave fun, activity, and community. It’s a place to come together and combat the modern feeling of loneliness in our cities – which has been amplified by work-from-home. It’s a repurposing of retail space in dense urban areas – from the delivery of goods to the delivery of convenient, community-based experiences.
Historically, office break rooms have been a place where ping pong tables are found – a place to step away from spreadsheets, or presentations, or code, and connect with co-workers in a fun and active way. If home is the office for many today, then having a PingPod in the neighborhood can serve as a space for people to come together and connect. And companies that want to encourage younger employees to come back to the office would do well to co-locate with a PingPod.
Our Pods are intended to be an extension of your home and your office.
A New Model for Tenants and Landlords
There is potential to shift the traditional landlord-tenant relationship towards a more aligned partnership – and we at PingPod are actively seeking real estate investors or developers who share a similar vision. We are so much more than a retail tenant – delivering fun, healthy experiences for residential and corporate tenants alike. We can help shape the identity of a building, and increase its value to potential tenants. An apartment or office building with a ground floor PingPod will be seen as forward-looking, healthy, and fun (which warrants higher rent).
In exchange, you can help us control our biggest cost: rent. And your tenants will become a core customer base for the Pod – seeing it as an extension of their home or workplace. Structured correctly, we can create a partnership that turns an amenity from a cost center to a source of upside.
Together we can help reshape urban spaces to keep them vibrant and competitive.
See you at the Pod!