Small cities and smart retail

Abstract

Internet-of-Things (IoT) innovations are reconfiguring our societies and our day-to-day lives. But how do these new technologies enter our communities, and when they do, will they complement or dislocate existing activity? This paper raises these questions with respect to a rapidly proliferating class of “smart vending technologies.” We focus on one particularly prominent case in this class: the smart pizza vending machines that are now spreading across France. Relying on an exclusive and newly constructed database, we examine the diffusion of these machines across over 30,000 French communities. We find that the quality of a community’s internet infrastructure is predictive of its adoption of smart vending technology. Contrary to our expectations, however, neither the large, dense, and most connected urban centers, nor the rural food deserts are the first adopters of these machines: instead, small but well-connected communities are at the vanguard of this technological change. We speculate that these machines are arriving in places with attractive consumer bases and internet conditions, but which lack 24/7 on-demand food options. Our findings highlight the bottom-up conditions that are giving rise to the rapid penetration of IoT technologies, which are sure to have long lasting local impacts.