Demographic Shifts Bring Significant Changes to Customer Behaviors

As the demographics change over time, it leads to a significant shift in consumer behaviors, changing the need for products and services. As businesses offer new products and services, that further influences changes in consumer behaviors. Let’s look at how this pertains to the parking industry.

30 years ago

Mr. Cooper, Sr., drove downtown to watch a movie and have dinner with his family. He found out what movie was playing in the theater — perhaps from a billboard that he drove by. He learned about the restaurant from a friend. He found a parking coupon from a direct mail flyer or drove around the block to find the nearest parking spot. Once parked, he fed coins to the parking meter or paid cash to the attendant and used his coupon if he had one. Data was generated in these simple activities, but since every action was disconnected from the others and most were not digital, there was no way to capture and analyze the data in a single place and analyze it. The idea of the parking operator having access to that data so they could use it to target Mr. Cooper better the next time he came downtown was unthinkable. The best an operator could do was to literally count the paper coupons to determine which marketing promotions worked better than others.

Fast Forward 15 Years

Mr. Cooper, Sr.’s son, Mr. Cooper, Jr., also wanted to watch a movie as his father did 15 years before. His experience started with him seeing a movie advertisement on his social media feed. He bought his tickets online, checked the restaurant reviews online, used a parking app to find the parking garage with the best price and nearest to the theater, and used google maps to navigate to the garage. He then used his phone to check into the garage, paid using his credit card, and left a nice online review of his parking experience there. Now that is the type of connected data that is valuable to the parking operator: they can now offer targeted promotions to Mr. Cooper, Jr., to have him join their loyalty rewards club, understand his interests, offer add-on services, and more.

Fast Forward Another 15 Years

It’s now the present day, and Mr. Cooper, Jr.’s daughter, who lives in a downtown apartment, gets all her content online, uses public transportation or rideshare to move around, and does not own a car, but her parents often drive over from suburbs to meet her on the weekends. She is considering having her boyfriend, who owns an EV, move in with her, and she herself is looking to get an e-bike. Now, a parking operator must foresee and plan for a demographic shift, as it would significantly impact on their future operations.

Parallel Data Universe Reflection of our Physical World

The good news for parking business decision-makers is that since every aspect of our lives is now interconnected, most of our actions in the physical world leave a footprint in the data verse. But as demonstrated in the above example, these are complex interconnections and enormous datasets. Mapping out user journeys and identifying insightful trends and the relationship of these trends to their business is a very complex problem.

Given the massiveness of this data, it is not humanly possible to visually identify even the simplest patterns, let alone identify any deeply hidden patterns, unless somebody draws the outlines of those patterns for us. That job has traditionally been done for us, the business managers, by the data scientists and statisticians.

Business analysts and data scientists traditionally have several very sophisticated business intelligence tools available to them to define the models your business is interested in, analyze data, and extract meaningful information from the data.

But here is the fallacy: they are the ones who defined these models based on what you asked them to look for, and their discovery of patterns is further constrained by the models they have built. They can only find what they are looking for. And that, too, depends on whether their models were robust enough to delineate the patterns in the data for them.

But what about those hidden patterns you did not predict, which your data scientists were not even modeling for? Any of those hidden patterns missed by you, but discovered by your competitors, could become a huge competitive differentiation for them. As in the above example, these patterns could have identified a trend in the parking industry that could make your business irrelevant if you did not plan for the expanded use of your parking assets, or it could detect a sudden economic shutdown like we all faced during the COVID pandemic for which we found ourselves completely unprepared.

Business Intelligence in Practice in the Parking Industry

Business intelligence can sound intimidating to many parking operators and may seem like a concept far out of reach. Thankfully, emerging technologies including digital parking platforms, artificial intelligence (AI), blockchain, and augmented analytics, are not only setting the path forward but also demystifying the path from data analysis to business intelligence. These technologies are taking business intelligence out of data scientists’ domain into business managers’ hands.

With the right tools and technologies in place, any parking operator can apply business intelligence to their operation to be able to create more effective marketing programs, predict demand and consequent capacity and staffing needs, and, in general, create a more compelling and seamless customer experience. Parking businesses can leverage data to their advantage in several ways.

Digital Parking Platforms Essential to Implement Rapid Change

The digital parking platform, hand in hand with business intelligence, makes the digital transformation of a parking operation possible. In this digital age, data collection at every customer touchpoint, rapid data analysis, implementation of iterative change strategies, and precise measurement of the outcome of the changing stimulus becomes a continuous process. The velocity of this process determines the competitive advantage of a digital organization.

A digital parking platform enables the rapid creation and launch of new services previously impossible with monolithic technology systems. Further, since the digital platform pervades the entire operation, it enables very rich data collection at every touchpoint.

Digital parking platforms collect large amounts of data about their customers, their customers’ transactions, and revenues and expenses related to their parking operations.

Traditionally parking managers track many key metrics, including:

• Daily transient sales — revenue, year-over-year difference, trends.
• Price per parking session, trends.
• Monthly sales by region.
• Sales by channel where the channels are drive-up, direct reservations, aggregator reservations, validations, hotel, employee, loyalty, corporate partners, etc.
• Revenue per spot.
• Average length of stay.
• Reservations sold and revenue by time of day: early morning, morning, mid-day, late afternoon, and evening.
• Loyalty program usage, new signups, points earned, redeemed.

Digital parking platforms also collect large amounts of data about how customers interact with your products and services:

• The path customer took to make a reservation at your garage.
• Time it took to complete a transaction.
• Ease of use of your app.
• Influences on the customer to buy additional services.
• Customer reactions to your promotions.
• Customer price sensitivity.
• Wait time at entry and exit.
• Interactions with the attendants.

While you may be generating reports periodically, it is easy to forget that a mass of data is sitting in a database full of useful information that you can use to run your operation more effectively. Business intelligence is all about that forgotten mass of data and how you can sift through it for answers to help you manage more effectively.

Customer Behaviors and Marketing Outcomes: Understanding customer behavior, demographic trends, and customer journey is essential to understand how to market to them effectively. Moreover, marketing analytics are necessary to measure the effectiveness of your marketing campaigns. This activity is increasingly becoming more predictive thanks to big data and augmented analytics. In other words, companies are now confidently and accurately anticipating what customers will want in the future and how their marketing programs can influence their behaviors.

Create and Deliver Right Products and Services: When you know how customers interact with your products and services, you can innovate to offer them what they want and increase their stickiness to your products and services.

Increase Revenues: Optimizing business processes, and making better business decisions, have a positive impact on the bottom line. But the valuable data your systems have collected can also be monetized to create new revenue streams. You can use that to offer high-value data-driven products to market.

Operational Business Intelligence: For every parking operation, making better business decisions is absolutely one of the top priorities. This includes hiring the right people, targeting the right customers, and boosting revenue. With data collected in their operations, they can better understand what’s happening in the business and the broader market and predict what might happen in the future. Data can and should be used to make smarter business decisions across every business function.

Internal Operations: Thanks to business intelligence, every business process and every aspect of business operations can be streamlined and enhanced. Whether it is optimizing pricing, accurately forecasting demand, reducing employee turnover, boosting productivity, and strengthening the value chain across all business areas, it’s easier than ever to make improvements, generate efficiencies, save money, and automate processes.

Key Challenges for the Business Intelligence Initiatives

Of course, the success of any business intelligence initiative depends on several success factors:

• The questions that we ask about our operation.
• The quality and relevance of the available data regarding the questions asked.
• The ability to extract the answers to our questions from available data.

Key Performance Indicators (KPIs) are, in essence, the questions we ask about our business. What is it about our business that we are trying to optimize? How do we measure our business performance relative to that aspect of our business that we are trying to improve?

KPIs tie the above three success factors together. Simply put, a KPI measures our performance along a predefined direction we are questioning. “Measurement” is the operative term here, as we must be able to measure what we want to improve to tell when the changes we make in our operation improve things. And once we know what we want to measure, we can ensure that we collect the data needed to track that measurement over time.

For example, let’s say that post-COVID, our transient operations have not returned to their previous levels, and we want to increase our weekday transient traffic through a series of marketing promotions. We will also need to monitor the effectiveness of the marketing promotions that we roll out. If our measure will be our transient occupancy during weekdays, then the effectiveness of our marketing programs would involve the comparison of our weekday transient occupancy to what we predict that it would have been without the marketing program.

There are a few traps built into this approach, however. How would we predict what our weekday transient occupancy would have been? Does our underlying data contain the information that we need about occupancy? How do we know whether our marketing effort has affected our performance and not some other factors?

We may need to answer some more basic questions first: do we have a method to track whether a particular customer visits our facility due to our marketing program, or is their visit coincidental and independent of our marketing effort?

This is where business intelligence comes into play. We must ensure we have the right tools and data to answer all these questions effectively. Business intelligence isn’t just about reporting, it enables us to apply statistical methods on top of our reporting to understand the correlation between, in this example, our marketing programs and our occupancy. Business intelligence enables us to apply predictive algorithms to our data, including the influence of other factors like seasonality, the effect of a particular holiday falling on a weekday versus a weekend, or a special event occurring near your facility.

Once the data is in place and we have the right business intelligence tools, we can go one step further. As we run our marketing programs and monitor the effect that these programs are having on our weekday transient occupancy, we can now further apply our predictive analysis in advance of our next marketing program to make sure that our facility is appropriately staffed for the demand that we are anticipating. Based on past outcomes, we can apply similar methods to determine how to target our monthly lease program to maximize revenue per stall.

Final Thoughts

A successful business intelligence initiative requires organizational agility to measure, react, and change at a digital pace. This level of agility is only possible if the parking operation runs on a digital parking platform, as only such a platform makes an organization digital at every touchpoint. Whether it is a customer, employee, partner, or any other stakeholder, valuable data is generated at every touchpoint, and those are also the points where organizations need to introduce change.

The digital pace makes it very hard for traditional business intelligence processes to keep up. Preconceived business KPI definitions by the business managers, and the data scientists’ ability to rapidly model change, are becoming a limiting factor for organizational growth.

Machine learning and artificial intelligence can do the job of data modeling and pattern recognition at a significantly faster pace than humans can. Not only are they faster, but they can also identify hidden patterns that business managers may not have even thought of. Augmented analytics is the way forward.

The use of blockchain further democratizes the process of data sharing securely. Thus, blockchain analytics works hand in hand with augmented analytics and would change how business intelligence is approached today. And both technologies and digital parking platforms will make business intelligence systematic to any digital parking business ◆