Parking Management Services: Driving Additional Revenue with Smart Parcel Lockers

Once ripe with opportunity, the parking management industry is now at a crossroads due to economic and societal trends reshaping urban mobility. Stagnant demand in traditional markets, fierce competition, low cost of entry, and sustainability pressures are compelling parking management services and parking lot owners to adapt and innovate. Amid this tumultuous parking services landscape, smart parcel lockers emerge as a promising avenue for driving additional revenue and delivering enhanced customer value.

The Challenges Pressing on Parking Management

There are an estimated 700 million to 2 billion parking spaces in America; despite the fact that about 10% of that inventory is paid parking, the business of parking management has been relatively stable for decades.¹ However, parking services revenue dropped 56% between 2019 and 2020 as COVID-19 paused the traditional “drive into the office” routine.²

With people returning to the office and other day-to-day activities, the parking solutions industry is slowly beginning to recover. The parking management industry totaled $121 billion in revenue in 2022, and is projected to pull in about $144 billion in 2023.³ That’s a 10% increase over 2019 levels. Yet many in the parking solutions industry worry about demand declines due to the convergence of three key trends:

#1 The Impact of eCommerce and Ride-Hailing

The rise of eCommerce has led to a decline in brick-and-mortar retail, reducing the need for parking spaces adjacent to shopping centers. Concurrently, ride-hailing services are carving into the market as consumers opt for convenience over personal vehicle use, particularly in densely packed urban areas.

#2 Post-Pandemic Work Trends

The COVID-19 pandemic has fundamentally altered the way we work. Remote and hybrid employment is becoming more prevalent, reducing the number of daily commuters who rely on a parking facility or parking structure near their workplaces. Moreover, rush hour has transformed the standard 9-5 gridlock into a more flattened demand curve for parking spaces.

#3 Environmental Considerations

Environmental regulations and the push toward sustainable transportation force cities to reimagine a future with fewer cars. Municipalities increasingly prioritize shared or green transport models, leaving traditional parking facilities to question their place in this new paradigm. New York City, for example, is actively seeking to increase ridership on public transportation since the devastation of the pandemic. In February 2023, subway ridership was at 65% of pre-pandemic levels.⁴ Further, the average parking rate is $69 per day or over $2,000 per month, leading some savvy Manhattan gamblers to risk eight parking tickets per month – totaling $580 – as a cheaper alternative than parking garages!5,6

Strategies to Increase Revenue in Parking Management

Despite these challenges, there are several strategies parking management operators can employ to drive growth and additional revenue:

#1 Add Effective Signage

Clear signage is one of the fundamentals of good parking management design. Using the universally recognized letter ‘P’ boosts awareness and, in turn, revenue.

#2 Introduce Dynamic Pricing

Thanks to airlines, car-sharing services, and even fast-food chains such as Wendy’s, consumers now understand dynamic pricing: charging higher prices during times of greater demand. Monitor competitive rates and adjust pricing based on demand, resulting in optimized revenue.

#3 Designate VIP Spots

Not all parking spots are created equal. Designate VIP parking spots close to exits or that don’t require steps and charge a premium.

#4 Implement Reservation Systems

Implement e-reservations to secure revenue beforehand and guarantee customer parking space availability.

#5 Offer a Valet Parking Service

Providing a valet parking service can command a premium rate and provide convenience to customers.

#6 Add Amenities

The convenience of getting a car washed, detailed, or vacuumed boosts both the customer experience and revenue.

#7 Increase Facility Maintenance

Ensure the parking lot or garage is clean, clearly marked, well-lit, and safe, which can attract more customers and possibly warrant a higher rate.

#8 Leverage Technology

Integrate technology and apps to show and reserve available parking spaces. For example, technology solutions accounted for about 2% of SP Plus’ gross profit.⁷ The company expects that number to jump to 10% by 2025.

#9 Support Electric Vehicles

Last year, 1.2 million electric vehicles were sold, and their share of the auto market reached 7.6%.⁸ Therefore, there is a demand for reliable EV charging stations.

Smart Parcel Lockers: A Smart Solution

Overhauling parking lots and garages into convenience hubs adds value. As Filippo Rossino, Smart Parking Product Manager at Swiss technology company Paradox Engineering, explains: “Parking facilities can be more than locations to leave the car during office or shopping time merely. As urban mobility habits change, parking operators are turning existing and new facilities into multipurpose hubs, where drivers can take advantage of a variety of services”.⁹

Among these strategies, smart parcel lockers stand out as a true game-changer. These electronic lockers can be integrated seamlessly into existing parking facilities and offer a host of benefits:

• Sustainability: By becoming part of an open locker network, parking facilities contribute to reducing delivery-related congestion and emissions by centralizing parcel collection points. Lockers also decrease the number of stops end-customers make, decreasing traffic and associated pollution. In fact, 47% of consumers are worried that packages are not sent sustainably.
• Convenience: Hosting lockers in a parking facility creates a one-stop solution for customers, allowing them to pick up packages when they park their vehicles.
• Revenue Stream: 34% of customers would frequent businesses that provide parcel lockers more often. Joining an open locker network, like Parcel Pending by Quadient’s, typically involves no upfront costs for installation and maintenance as the network provider covers these expenses.
• Increased Foot Traffic: In a 2023 consumer survey, 40% of consumers said they would use businesses more regularly if they facilitate accessible parcel collection and returns.
• Carrier Agnostic: Regardless of which major transportation companies deliver the package, customers can easily accept and return packages via the smart parcel locker system.

In a world where parking management is becoming more challenging, smart parcel lockers offer a beacon of innovation and profitability. By adopting this technology, parking lot owners and parking management services providers remain competitive and build a greener and more convenient future for urban dwellers. Now is the time to steer into the curve and revolutionize the parking experience with intelligent, sustainable solutions.

With these strategies and the integration of intelligent parcel lockers, the future of parking management looks promising. By adapting to consumer habits and trends, parking facility operators can drive additional revenue and ensure the relevance of their services in the evolving urban fabric.

Ready to offer more services to your parkers? Contact Parcel Pending by Quadient today and ask about becoming an Open Locker Network host.

 

Sources:

1. Ferris, Robert. How the $8 billion parking industry is evolving to stay alive. www.cnbc.com. May 6, 2023. https://www.cnbc.com/2023/05/06/how-the-8-billion-parking-industry-is-evolving-to-stay-alive-.html
2. Ibid.
3. Ibid.
4. New York City Comptroller. Riders Return. comptroller.nyc.gov. March 16, 2023. https://comptroller.nyc.gov/reports/riders-return/
5. Towne Park. 36 Parking Statistics & Industry Trends. www.townepark.com. n.d. https://www.townepark.com/parking-statistics/
6. Ocampo, Josh. What’s Driving New York’s Parking Problem? A Reporter Explains. www.nytimes.com. October 19, 2023. https://www.nytimes.com/2023/10/19/insider/new-york-city-parking.html
7. Ferris, Robert. How the $8 billion parking industry is evolving to stay alive. www.cnbc.com. May 6, 2023. https://www.cnbc.com/2023/05/06/how-the-8-billion-parking-industry-is-evolving-to-stay-alive-.html
8. Cox Automotive. A Record 1.2 Million EVs Were Sold in the U.S. in 2023, According to Estimates from Kelley Blue Book. www.coxautoinc.com. January 9, 2024. https://www.coxautoinc.com/market-insights/q4-2023-ev-sales/
9. Paradox Engineering. Urban mobility is changing, and parking management too. cities-today.com. January 17, 2023. https://cities-today.com/industry/urban-mobility-changing-parking-management-too/