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New commercial opportunities appear on the London Underground as stations undergo radical changes.

Posted by SmartRail World Staff on Jan 8, 2014
The announcement at the end of last year that Transport for London (TfL) will be closing all its station ticket offices by 2015 drew a strong and typically negative reaction from trade unions and passenger groups critical of the plan. But with TfL facing a budget reduction of about £78m in the financial years of 2013 and 2014 they argue that the plans not only reflect the dominance of the Oyster card but also that the plans would help it save more than £40m a year. TfL also maintained that six major central stations will have special customer points to help tourists and visitors and that every station will be staffed while the tube is running.

However as e-ticketing may be costing jobs, e-commerce might be creating new ones. For the closure of ticket offices is opening up previously unavailable space at stations which equal new commercial opportunities for TfL.

Speaking to the Financial Times, last month Graeme Craig, TfL’s director of commercial development, believes the transport system has the potential to be a “supermarket aisle” down which millions file every day. “They are time-poor people who’ve got very busy lives. All we need to do is work out what it is they need and give it to them in the most convenient format,” he said.

The first evidence of this appeared in November 2013, when supermarket Asda launched a “click and collect” service at six Underground stations in North London, enabling commuters to purchase their shopping online in the morning and then collect it on their way home via the station after 4pm. The technology behind this system has been developed together with Walmart labs in California, part of Asda’s parent company and already been trialled on a limited way outside of London.

Mark Ibbotson, Asda Retail Director, said at the launch of this service: "Customers in the South East tell us that they want the prices and quality provided by Asda value but they can’t access it easily. This tie-up with TfL solves that….We believe customers will value the convenience of collecting shopping at their home tube station rather than carrying the products bought in premium convenience stores on their commute home.” Currently shopping is picked up from temporary facilities in car parks at the stations, but if successful, fixed lockers could be installed.

This type of initiative is not unique to Asda, other large retailers, most principally eBay are also rapidly developing “click and collect” services whilst Amazon has been developing its Lockers Programme since 2012— which lets Amazon customers select a local place such as a supermarket to have their goods delivered to, rather than their home or work address. The shopping is then stored in a locker offering a one-time code system for people to collect their deliveries.

It is not too much of a stretch to imagine retailers like eBay and Amazon as well as more traditional shops (Marks & Spencers are also rumoured to be interested) and coffee and refreshment providers eying opportunities with the TFL network on which 10m journeys are made a day.

There are logistical problems to overcome though, many of the offices are small, stations already crowded and the addition queues of people waiting to pick up their bags of shopping could be problematic. But there's no doubt that the soon to be vacated ticket offices could help TfL boost further the £25 million they receive annually from renting out shop spaces and with their aim of being financially self-sufficient by the end of the 2010s there's a strong likelihood that after 2015 London Underground stations will look quite different from how they do now.

And also to gain a greater understanding into the changing business of rail, why not download this free e-book – Using SmartRail Technology to Build The Railway of the Future.

Topics: Resources, E-shopping and rail, Station commerce, Features, Interviews, Click and Collect, TfL, News, Fare Collection, Passenger Information Systems

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