Urban consolidation centres: retail stores’ demands for UCC services

Abstract

Purpose Urban consolidation centres (UCCs) are often conceived to improve services in retail stores and potentially reduce costs. However, few studies have examined how retail stores perceive the services a UCC could provide. The purpose of this article is to explore retail stores' potential demands for different services that a UCC could provide in order to foster the development and implementation of UCC solutions aimed towards more economically feasible business models.Design/methodology/approach Structured interviews were conducted with employees at 72 retail stores. Qualitative, as well as quantitative analyses, were conducted to identify the potential demands of the retail stores. FindingsWe have provided arguments why retail stores might be interested in UCC services, and thereby potentially pay for them. Improved customer service to stores' customers might not be a valid argument. We point to the cost aspect: stores expend resources that a UCC could provide in a more cost-efficient manner. Research limitations/implicationsThe findings contradict previous studies to some extent, as it indicates that a UCC may actually not enhance customer service in retail stores. Instead, our findings point to the importance of considering the potential advantages according to economies of scale that are facilitated by UCC services. Practical limitations/implications Taking the perspective of the stores is important in order toidentify arguments for why they should pay for the services provided by a UCC. 2Social implications: Financially viable UCC solutions are needed in order for the initiatives to be maintained and thereby provide a long-term decrease in the environmental and social footprint caused by urban freight.Originality/value This study answers the call for research addressing retailers' perspective in urban logistics, as it takes a demand-driven perspective of the development of UCC services.Furthermore, by highlighting services requested by retail stores, it can guide the financing of UCC initiatives, an aspect that has been lacking.

A critical analysis of the impacts of COVID-19 on the global economy and ecosystems and opportunities for circular economy strategies

“…Beyond vehicles and infrastructure, the adoption of these strategies can enable the development of new technologies and practices such as virtualisation of products, digital manufacturing, waste collection, and sorting systems. Interestingly, innovative environmentally-friendly logistics solutions resting on the backbone of the CE framework are already materializing and being trialled in various capacities, including: urban consolidation centre (UCC) ( Johansson and Björklund, 2017 ), crowshipping ( Buldeo Rai et al., 2017a ; Rai et al., 2018 ) and off-hour delivery ( Gatta et al., 2019 ). UCC stresses the use of logistics facilities in city suburbs to ease good deliveries to customers ( Browne et al., 2005 ), while crowshipping is a collaborative measure that employs the use of free mobility resources to perform deliveries ( Buldeo Rai et al., 2017b ).…”

Supporting urban consolidation centres with urban freight transport policies: a comparative study of Scotland and Sweden

“…According to Björklund, Abrahamsson, and Johansson (2017), a viable business model for a UCC should be able to adapt to a dynamic environment and innovate new services in order to generate more revenue. Business models need to ensure the balanced distribution of costs and risk among the stakeholders (Johansson and Björklund 2017), often involving a public subsidy to guarantee that users will not be penalised financially, at least in the start-up phase (Allen et al 2014). Each UCC user, whether a logistics service provider or a retailer, seeks to obtain financial and operational benefits.…”

“…Benefits can vary based on the type of users; for instance, logistics service providers could send fewer vehicles to busy city centres as they subcontract a part of their last mile deliveries to UCCs. Retailers can benefit from service offerings such as storage and labelling (Johansson and Björklund 2017). These service offerings can become additional sources of revenue for UCCs as retailers usually pay for services offered by UCCs.…”

“…In addition, the ability of developing service offerings indicates that UCCs are able to develop and adopt their business models to a dynamic environment, which is characterized by different expectations and requirements of different stakeholders (Björklund, Abrahamsson, and Johansson 2017). Existing studies mention a variety of services that can be offered by UCCs such as providing off-site storage space, pre-retailing activities, waste management and recycling, e-commerce services, information system enabling tracking and tracing, and customized delivery days and times for the users (Browne et al 2005;Johansson and Björklund 2017).…”

“…In order to protect these priorities, they are reluctant to use UCCs. Several authors have found that the major problem with UCC projects is that their inability to attract sufficient users limits their financial viability; many have failed either after public subsidies ended or have been discontinued after feasibility studies (Quak and Tavasszy 2011;Allen et al 2012;Kin et al 2016;Johansson and Björklund 2017;Paddeu 2017).…”