The full piece was originally published on TechCrunch.
The underlying goal for all companies in this space is delivering a solution that removes all frictions that people currently face – finding parking and thumbing through their wallets and cars for money to pay, for example – and create one seamless transaction that positively benefits customers. Consumer behavior changes when the utility that’s offered is greater than the existing norm. In order to accomplish this, it simply requires creating a strong consumer value proposition generally composed of a frictionless experience.
A frictionless parking experience means drivers can move freely from point A to point B without any limitations or delays. A multitude of things – cashless parking, reduction or complete avoidance of human interaction or booking capabilities – are at the fingertips of consumers who are testing each product to see what best fits their needs.
Through the mobile boom that’s propelling the parking industry, key changes are helping this market move toward that frictionless experience. These include:
- Price opacity turning into price transparency: The price of parking has historically been fickle –depending on the time of day or events in the area – and consumers can hardly evaluate the cost before they pull up to a parking spot or into a garage. The advent of parking apps is shifting the industry from an opaque to a transparent pricing model, so people can know how much parking costs before they arrive at their destination.
- Cash giving way to automated mobile payments: The tedious experience of finding a pay box in a parking lot, getting a ticket and hanging on to it is being replaced by seamless mobile payments. Consumers now have the ability to pay for parking with one quick touch of an app.
- Coverage increasing every day to deliver true convenience: As mentioned, there’s no shortage of apps helping to make parking simpler, but unfortunately, some of these services aren’t available in particular parts of the country or don’t let people access their cars during certain hours. The industry knows this is a major problem that won’t help shift consumer behavior, so companies are continuously adding facilities, extending hours and expanding into new markets. While many current solutions overlap, they’re all vying to become the one-stop solution to provide around-the-clock coverage for consumers everywhere.
- A lack of inventory control and revenue management being replaced with the need for both: While these apps are providing big benefits to consumers, there’s good news for operators as well. Mobile apps are enabling the parking industry to move toward a revenue management model, helping garage owners and operators maximize profits. Think of what Expedia and Priceline have done to the hospitality industry – technology has made it possible for hotels to price rooms according to demand, keep hotel rooms booked at various prices (i.e., offering deep discounts during off-peak times) to increase profits for hotels. The same practice is gaining momentum in the parking industry and driving increased revenue for on- and off-street parking vendors.
The truth is nothing is decided within this industry, but both operators and technology leaders know parking is a stress point – an IBM survey showed that drivers around the world spend on average 20 minutes searching for a parking spot. Success will happen when the pinnacle of a frictionless product is achieved, and parking will especially see an insurgency that will greatly impact consumer behavior.
So what are your thoughts about frictionless parking? We’d love to hear from you.