October 05, 2004
Is the parking lot the great untapped venue for getting users to try a hotspot? One Michigan company is betting on it, and has a plan to capitalize on a market that analysts aren't even sure really exists.
We've told this story in a dozen variations: The entrepreneur who envisions a new use for Wi-Fi, a moneymaker sure to tap into the demands of a previously unrecognized audience. Latte sippers. Boaters. RV drivers.
Ready for one more? Let's try drive-through Wi-Fi.
The pitch goes like this. Salespeople only make money when they are selling. They don't want to stop for a cup of coffee just in order to check e-mail or process an order. The solution: Create a parking lot hotspot. Retailers agree to rig out their parking areas with wireless access, and pre-paid users pull in just long enough to do their business without leaving their cars.
That is the vision of David Dykstra, director of research and a co-founder (with his brother Tim) of FreedomNet Solutions in Grand Rapids, Mich. The idea arose out of Dyksta's own experiences.
"When I was a salesperson on the road selling telephone systems, I was constantly running between clients. If I was sitting in my office, I wasn't making money," he said. "I want to get access on the road, but I don't want to spend $4 on a latte in order to get it—and I don't want to take time out. I want to get what I need, when I need it, and still hit my five or six appointments a day."
Despite sounding like a fast way to make hotspot money—and, indeed, a likely method of access to come at future McDonald's hotspots being installed now, analysts are skeptical.
"Have you ever tried using a laptop in a car? There is this thing called a steering wheel that gets in the way," observed Eddie Hold, a wireless analyst with research firm Current Analysis.
He notes, too, that the purveyors of drive-through Wi-Fi may have their hands full publicizing their offering. "With Starbucks, the first coffee shop you see, you get out and do your business and move on. You are not going to drive around looking for this drive-through hotspot you have heard about."Others wonder whether there would be sufficient market demand for the product. At JupiterResearch, analyst and research director Julie Ask points to recent research figures from those identifying themselves as "daily travelers." Some 58 percent say they never access the Internet while on the road. Only 12 percent say they log on once a day on the road, and all those who log on multiple times a day together make up just 10 percent of daily travelers.
"The point being: Those out on the road 'daily' tend to have less of a need," Ask explained.
Such hurdles notwithstanding, Dykstra says the business model is off to a good start. He is close to signing a deal with a major retailer (he can't say which one), he has begun making sales calls on likely companies such as sales groups and delivery organizations, and he says the service is set to launch in December.
For those who sign up early, Dykstra will charge $35 for four months of service starting in December. As of January the price goes up to $20 a month. Still cheaper than most monthly Wi-Fi hotspot subscription services.
One obvious question arises. Why would a retailer agree to devote its parking spaces to people who are not even coming into the store?
Dykstra has a ready reply. First, the log-in page will promote the business. Second, the retailer could use that space to offer mobility-only deals that might entice Wi-Fi users into the store. Finally, the business gets a cut of the usage fee for each person who logs on, thus turning a formerly passive parking space into an active profit center.
Moreover, Dykstra does not anticipate Wi-Fi users overloading anyone's parking capacity. Given the mobility needs of his target audience, "they are not going to be sitting for an hour. They are going to pull in, do what they need to do, and leave," he said.
Dykstra may have significant advantage over other Wi-Fi operators who are looking to sell access to individual consumers. That is: He can sell a pile of subscriptions all at one go.
"There are companies we can market to who have an entire on-the-road sales force," he noted. "Obviously if I can sell 20 users at one shot, life is good. It's a lot better than doing it one at a time."