A Lesson in Digital Transformation for Mobility

Ask yourself this question: What’s the percentage of parking operators that have adopted digital transactions? The answer is not many—under 10 percent. Now, think about the everyday services you use or your purchase habits, and how much of either takes place on your phone or laptop. Chances are that many of your daily errands or routines have moved to digital. 

So, why hasn’t mobility or parking caught up with the broader digital transformation trends

You’re not alone in wondering the same question, and mobility operators now use it as fuel to drive their practices. More operators are realizing the opportunities inherent in adapting to digital.

However, digital transformation isn’t simply an isolated event where you might introduce a singular element to your business. It’s a holistic business strategy that systematically repositions your operations, management, and technology to work across the digital spectrum. It affects your supply chain, the way you interact with customers, and how you manage business intelligence.

This is no simple transformation. Particularly for mobility and parking—industries that are still highly attached to analog and cash transactions. That’s not stopping operators such as LAZ Parking from embracing the switch and utilizing digital transformation as the pathway to the future of mobility. Far from staying content with an ambiguous mix of traditional and digital operations, LAZ is forward-thinking and assertive. 

LAZ Head of Innovation and Technology, Steve Gresh, is a parking innovator who’s leading the company’s digital transformation. He was a client before joining, and his 15-year mobility journey has taken him from running parking in sports stadiums to eventually joining LAZ and managing large-scale projects. After spending time in Texas and Chicago, Gresh made his name in tech and innovation by opening LAZ’s business intelligence department, leading him to the position he sits in today. We spoke with Gresh about his perspective on digital transformation and its role in mobility and LAZ.

Flash: Welcome, Steve. You’ve said that what’s coming next in mobility is the era of “proximity-on-demand” services. Can you expand on what that entails?

Steve Gresh: It’s a pretty broad spectrum, and there are many different opportunities within that. You have the last-mile mobility component, which consists of scooters, bikes, and ride-share. You also have what’s been enhanced dramatically by COVID-19—the last-mile logistics segment. There are many folks in the world that are looking for micro-warehousing and hyper-local distribution centers. They’re looking for a lot of additional support for that last-mile delivery, even to some extent the middle-mile where there’s delivery and then repackaging and reframing before moving on to the last-mile delivery.

Then, there’s the world of kitchens. People love the ghost kitchen (food operations set up for delivery only) concept and what you can do in that space. There’s charging to support electric vehicles (EV) that fit within proximity services. There are warehousing and lockers—lockers not just for delivering logistics, but to support those that don’t have storage in a downtown environment. They might be living in an apartment that doesn’t have excess storage for their bicycle or extra gear. It all frames itself up to being localized.

So, the big difference is: the value of proximity. It’s the concept of being able to walk out your door and be within a mile of where you’re trying to be, whether that’s for your work or home.  [Proximity-on-demand] is making those services hyper-local and supporting those services which everybody loves to call last-mile (which we love to call the LAZ mile).

“The penetration of digital transactions in the parking industry is still very low. Incredibly low. It’s still under 10 or even seven percent.”

F: What does digital transformation mean to you?

SG: There’s a couple of pieces. It’s transitioning your end consumer to a “digital platform.” In the old days, [customers] saw a sign as they drove down the street and turned into a garage. Nowadays, they’re on maps, they’re in-dash in their car, or they’re looking at their phone and being directed to parking. So, we’re moving to sales channels that are interfacing with maps, OEMs, or cars. Or, we’re providing the consumer with the ability to get to your asset from the thing that’s in the palm of their hand.

Customers will be able to transact and get their credential on their phones and access the facility without doing anything else. To me, that’s digitizing the transaction. That’s turning an analog transaction into a digital transaction. All they’re doing is using their phone or in-dash in their car. They’re not taking their credit card out of their pocket. They’re not interacting with the team, other than maybe to scan a barcode. In some cases, they’re not even doing that—they’re using Bluetooth or scanning a license plate, and it’s automatically recognizing who they are and letting them in and out of the facility.

That’s what digital transformation is to me. And, it’s still a very small component today. The penetration of digital transactions in the parking industry is still very low. Incredibly low. It’s still under 10 or even seven percent.

F: How have you been implementing digital transformation within LAZ?

SG: It started with us putting together our own e-commerce platform. We have an app, and we have text-to-park. We have integrations with PARCS vendors for the enablement of those types of transactions to be accepted at our gates and facilities. We’ve implemented programs with more advanced systems like Flash, where we do have accounts on file and you can check in and out of the facility. We have web widgets that are put on our clients’ websites that enable reservations to take place.

So, we’ve gone into that whole suite of different ways in which you can transact for parking in the digital space, and we’ve tried to drive that across the entire country. Our goal is that 100 percent of our facilities have some means to transact online, in-app, or through text. So that one way or another, you can [transact] without having to pull a ticket at a gate or walk up to a machine and pay.

Probably the largest challenge within that is the integrations with the PARCS systems themselves and having the physical infrastructure on-site to support it. Because there is so much legacy parking equipment out there and it’s an investment; it can be very difficult at times to get the physical infrastructure in place to enable digital transactions.

“Customers will be able to transact and get their credential on their phones and access the facility without doing anything else. To me, that’s digitizing the transaction. That's turning an analog transaction into a digital transaction.”

Part of our partnership with Flash was introducing hardware-as-a-service (HaaS), which lowers that barrier to the capital spend for an asset owner and enables assets to take digital transactions. I specifically focus on that versus what people have done for a while, which is the “layer on.”

There were a lot of overlay systems created where a vendor would say: “Hey, I’m going to enable you to use this digital platform, but I’m going to bolt on my own scanner and connect it to the gate, and it’s independent of your actual park system on-site.” This creates tons of challenges for occupancy management, revenue management, and auditability of the asset.

Mostly because it’s a layer on—you have two disparate systems that are now both accessing your properties. I can’t say that we haven’t done it in our facilities, but it creates many operational challenges that I think now, with the newer systems that are being launched, there’s no place for it. You should be doing it the right way.

“The biggest lesson is to pick your partners well, because you're not going to do it all. At the end of the day, you’re not going to be able to fill every single void within the ecosystem. You have to pick good partners.”

F: What are the lessons you’ve learned along the way that other leaders can benefit from reading?

SG: Integration capability is something that’s incredibly important. We’re pretty good about evaluating who our partners should be and we spend a lot of time working with them. With Flash, we installed the very first platform of their valet and it helped with the development of their PARCS solution. So, we spend a lot of time with the folks that we’re going to partner with, making sure that they have the right infrastructure and integration capability.

For us in particular, it’s important that we have integration to our own internal platforms and tools. Therefore, visibility to data is critical with any of our partners. If you’re learning that you don’t have access to data—that’s a problem. You need to have the capability to integrate to platforms. Layering on systems is not the best idea, which is something you learn quickly. You don’t want multiple revenue control platforms in a single asset. It divides up reporting and information in a way that makes it complicated to understand what’s going on.

The biggest lesson is to pick your partners well, because you’re not going to do it all. At the end of the day, you’re not going to be able to fill every single void within the ecosystem. You have to pick good partners.

F: Speaking of good partners, what are some things to look for when selecting them?

SG: They have to be adaptable. You have to find good partners that are willing to listen and grow with you as you learn and run into new challenges. You’ve got to have alignment in terms of what your end goals are.

Where’s your focus? Is your focus on just making money, or is your focus on creating a great experience? Is your focus on being the number one player in the space? Is your focus on future growth and enhancement?

You’ve got to find people who align with your vision. To me, it’s about people who you can trust. This may be unique to me, but LAZ is a family company. We’re all about hugs and having fun. We’re all about working hard, but it’s also trust, honesty, and respect. That’s the core fundamental piece of LAZ. And when we engage with partners, we have to find and feel all of those things first.

Then, you’ve got to have all the flexibility and future-facing abilities. You have to have good technology and be able to deliver on what you say.

F: A large part of adopting digital transformation as a strategy is internal company education and onboarding. How has LAZ approached that?

SG: You have to have a strong HR group with a great learning center, which we have. We have a fantastic Learning Center and a heavy focus on employees. We are a people-first company; that is our foundation. We have LAZ University—where we put people through [education] programs.

You also have to get your hands on [the product], and we have to do demos, presentations, focus groups, and peer-to-peer training as well. It becomes organic, at a point, but you have to have the foundational tools to get that first group of people up to speed and embrace what you’re doing.

F: How does digital transformation eventually provide new value for the end consumer?

SG: It’s about the experience for the customer—and their ability to access what’s coming in the future, like proximity-on-demand services. These things don’t only impact the customer in the facility that they’re using. The services that are provided from these facilities in the future impact a much broader customer base that lives outside of that asset.

When you think about running a ghost kitchen out of a surface lot or doing delivery logistics, you’re touching consumers that are far and wide from just those that are parking in the garage now. You also create consumer experiences at a parking garage with things like lockers, EV charging, scooters, and bikes. So, you’re creating a much broader spectrum of who you’re impacting and the types of experiences that can be generated from your assets. To me, that’s where new opportunities and value-add comes in.

The same goes for bundling services. A customer can say: “I’m going to buy my parking and EV charging, and have a storage locker all in one subscription at this one asset.” Being able to do that in a one-time subscription at a garage with bundled services is fantastic. You don’t have to have three different payments and apps. These are the types of things that we envisioned to be the value-added services for our clients and customers.

“The biggest innovations to come are the proximity-on-demand services. It's exciting. It's going to be the new way for parking operators to exist.”

F: Is there any exciting news upcoming for LAZ or anything else you’d like to share?

SG: I think we’re always on the cutting-edge of what’s happening out there. We’ve always pushed the envelope with who our partners are or what our initiatives are. We are clearly focused on the mobility space and in the proximity-on-demand services. There are many exciting things coming up related to the efforts that we’ve put into working down that path.

We’re working with a bunch of different partners and focusing on what the parking of the future looks like. It involves the components that I talked about earlier in order to create partnerships and enable assets to have a bigger, broader view of the world. It expands what can really be done out of the reuse of real estate.

The biggest innovations to come are the proximity-on-demand services. It’s exciting. It’s going to be the new way for parking operators to exist. Who knows, maybe we don’t get called parking operators anymore because we’ll be dealing in logistics, service delivery, and drones flying off rooftops and things like that. It’s mobility hubs—a whole different world.

F: We’re so glad you mentioned mobility hubs. Do you think the word “parking” is holding back our evolution from parking to mobility hub operators?

SG: It’s tech-enabled real estate. There are many ways to think about what it becomes, but it’s far more than just parking now, that’s for sure. You’ve heard it from SP Plus. Their CEO, Marc Baumann, said in an investor call: “We’re not a parking operator anymore. We’re a technology company.”

You have the REEFs of the world out there, not claiming at all to be parking. I think we’re seeing many folks across the country trying to reimage themselves to not be just a parking operator. Parking operations might be one of the services they offer and a part of what they do, but they’re trying to say that they’re technology companies.

I think we’re still in operations. We enable our operations with technology and we are going to partner with, create, and deliver technology as part of our overall solutions. But you still can’t lose focus on what the core business is. Parking is still the primary revenue stream for the majority of these assets and you have to do that well.

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