Stockholm: leading cities' digital revolution

Published July 2017 in collaboration between Invest Stockholm and The Local

Street lamps linked to emergency services. Drones delivering milk to your door. It may sound like science fiction, but in Stockholm it may be closer than you think.

Imagine walking outside and to find a compact, personalized vehicle waiting to take you wherever you need to go – paid for by your local transport card.

Imagine street lamps that turn red when an incident occurs, instantly alerting police where to go and passersby to stay away.

Imagine a small flock of drones appearing before you to offer a selection of items you hadn’t even realized you needed yet – the milk you forgot to pick up, the latest gadget for a friend whose birthday is coming up, or cough syrup for the cold you’ll wake up with the next day.

In Stockholm, many of these scenarios may be closer than you think.

“The adoption of new technology is changing peoples’ behaviour – and that of course will change our cities and put totally new demands on companies,” says Annelie Gullström, head of business development at AMF Fastigheter, one of Sweden’s largest property investment and development companies.

“No industry is excluded – this impacts everything.”

AMF Fastigheter owns many of Stockholm's largest gathering places, including malls such as Mood, Gallerian, Ringen, Västermalmsgallerian and Fältöversten – and tries to stay “five curves ahead”, says Gullström.

“To keep adding value for our customers, we need to challenge the current market and prepare for the future,” she explains. “So we are constantly studying changes in technology, and how they will affect retail, workplaces, and our lives.”

Sweden is arguably already one of the most digitalised countries in Europe – and the world, not simply settling on going cash-free, but also leading the way when it comes to instant mobile payment technologies like Swish.

And Stockholm will be one of the first cities in the world – if not the first – to get 5G network technology. Plus massive investments are on the way that will make Sweden’s capital world’s digitally ‘smartest’ city. Hundreds of projects have already begun.

‘The Lobby’ reimagined
And Gullström and her team are preparing for a revolution in the way Stockholmers shop.

In the beginning of 2018 a new shopping experience – The Lobby – will open up in the Stockholm’s city centre, and it’s likely to be the first of many.

“The Lobby is not a store – it’s a completely new mindset for the marketplace of tomorrow,” Gullström explains. She says there are six key elements, or cornerstones, which make up the foundation.

“If you look at the different parts separately they’re not really unique – but the magic happens when you put them together,” she continues.

“The first is a plug-and-sell set up. It’s a carefully-curated free flow retail market where you can bring your own brand and we will take care of more or less everything for you.”

For instance, a Hong Kong-based brand could send some items to The Lobby to be featured and sold by The Lobby’s own staff. But leasing agreements are only available on a month-to-month basis.

“We don’t sign long-term contracts, and we encourage brands not to stay too long because we want the space to change,” Gullström says. “We’ve already had questions about renting by the day or by the hour.”

The next cornerstone is digital service, such as click-and-collect capability for both buying and returning products.

“I shouldn’t have to cancel two meetings and work an afternoon at home to wait for a postman to pick up the shoes I want to return,” she remarks.
In addition, The Lobby will also be a social space and event hub – a place where visitors want to be.

And finally, it will also be a centre for Stockholm’s most important area: innovation.

“A membership at The Lobby also includes a membership to Epicenter,” Gullström says, referring to one of Stockholm’s first digital ‘House of Innovation’. “So if a company wants to conduct a lab, or run a hackathon with their customers, we can do that. We will also hook them up with relevant tech companies, such as new payment solutions or ‘magic mirrors’ for fitting rooms.”

A smarter city
The Lobby is just one example of how digitalisation is changing Stockholm from the inside out – but changes are also being made from the outside in.

”How could we build a smarter city if you could start from the beginning? That’s what we work on,” says Mats Rönnbo, director of development at Skanska, one of the world's leading construction and development companies. 

Much of Rönnbo’s work focuses on infrastructure – for instance, where to add a metro station to open up the possibility for an entirely new city?

“Thanks to digitalization, office spaces, public transport, logistics...everything could look different in a new city.”

Rönnbo says that certain sorts of shops are already starting to disappear from city centres – but they’re quickly being replaced by social spaces.

“We don’t need big stores in the city centres any more. The city is primarily a meeting place – smart cities are built around activity,” he explains. 

The Lobby is one example, showing how traditional retail is evolving into more of a dynamic social experience rather than something to check off your to-do list. But Rönnbo thinks even bigger changes are afoot.

”Perhaps in the future people don’t need massive living rooms with TVs at home, because we use public space for that instead,” he muses. “Perhaps we’ll have commuter cards, like the SL card today, where you cannot just use the subway but also rent a car, call an Uber, borrow a bike, and things like that.”

The ‘Spotify Principle’
Rönnbo says many of the upcoming transformations are about optimizing both space and time. Buildings like schools frequently stand empty, as do parking lots – what if there were a way of making use of all that space all the time?

”Everyone used to have a CD collection but now it’s all on Spotify. I think that idea can be applied to everything – bikes, cars, product delivery, and other kinds of transport, too.”

Rönnbo’s analogy – let’s call it the “Spotify Principle” – is already having an impact on many areas of our lives beyond music consumption, like food, for example.

“Digitalisation is changing the rules of the game,” says Miki Kuusi, founder of food-delivery app Wolt. “The internet has already changed what it means to have a restaurant.”

The restaurant industry is massive and has remained largely unchanged for centuries, Kuusi says. Historically, one aspect has had disproportionate significance, perhaps even more than how good the food is…

“Location, location, location. But digitalization is breaking the significance of location. Now, the location is in everyone’s pocket.”

With delivery services like Wolt, someone could (theoretically) run a “restaurant” from their apartment and get outstanding ratings and plenty of buzz, even though the location is bad or non-existent.

“Restaurants are also no longer constrained by the capacity of their seating,” Kuusi says. “They are starting to devote more space to their kitchen than to the seating area.”

Eventually, these types of new behaviours and services are bound to transform our cityscapes, Kuusi agrees. But don’t worry – change is gradual.

“Digitalisation will change how we build new cities. But I’m not a huge believer in everything changing overnight,” he says. “People are still going to go to restaurants. And services will still function around the cities, cities won’t function around services. It’s not radical.”

But as Gullström points out, “these things are happening”: delivery drones, 3D printers, robots, smart appliances.

“A lot of this technology already exists,” she explains. “It’s here and now, and it’s changing our lives.”

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