The Impact of Online Parking Sales to Transient Traffic: Cannibalization or Market Growth?
Updated: May 8, 2022
See key takeaways from our webinar, "Digital Parking Sales: Market Cannibalization or Growth?" Featuring Todd Tucker, SVP of Market Development at Arrive and Andrew Sachs, President of Gateway Parking Solutions. Hosted by Wen Sang, CEO of Smarking.
Todd, why did you decide to focus your dissertation on online-offline sales in parking?
Todd Tucker: I worked on both sides of parking, both operations and technology, and needed to know if I was taking traffic away from my existing channels by enabling a 3rd party online sales channels.
"Am I just spreading the same amount of money around? If I'm going to spend time and effort on revenue channels, I need to know that we're actually going to make more money than what we started with, not just move it around." - Todd T.
As an operator it was a topic of concern, and with Arrive, I would often hear cannibalization as an objection to using online sales channels. And there were a lot anecdotal perceptions of what was going on, and assumptions such as, "well here's what it did in this location, it will probably do this in other locations too". But no one had any data on it. So, I wanted to use academic rigor and data to perform regressions and really understand the impact.
Andrew, what motivated you to dig into the relationship of offline-online sales?
Andrew Sachs: The line between offline and online has blurred. Todd is focused on the macro, I'm hyper-focused on the micro. It started when people started to use their phones in their car and Google and search results of my garages was impacting business. Google and online search disrupted everything, especially parking and we need to pay attention to it.
Connecting your online business to your offline operations
Andrew Sachs: We are in a period of massive disruption. It's not because of COVID-19, it's accelerated by it. Let's look at the data, as you can see below, in 2012, 99.97% of my revenue came from transient, offline parkers. But by 2019, ParkWhiz and SpotHero made up almost 10% of my revenue, and my revenue grew. My revenue jumped back up largely because of the offline work I was doing.
"You can see below that 2014 revenue was down YOY, and it jumped back up in 2015. The difference here is that we started to focus on our online presence. It's imperative to connect your offline business to online." - Andrew S.