What Hyperlocal Marketers Can Learn From Disney’s Wearable Devices

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disneyWe talk a lot in the hyperlocal industry about what the future of offline marketing and commerce will look like. Mostly it would seem to involve taking the advantages of online marketing and shopping (customization, personalization, analytics, actionable CRM data, etc.) and bringing them into the real world of retail stores.

Different players have been experimenting with different elements of this online-to-offline migration of technology, but the Walt Disney Company has really taken the ball and run with it.

Disney is hard at work transforming the guest experience at its various resorts using location- and preference-based technology. The company’s MyMagic+ system issues park-goers digital wristbands that tie into a web and mobile application, and are linked to users’ credit cards. Guests can use their wristband for things such as purchases, admittance to rides and attractions, hotel room access, ride queuing, and dining reservations (to name a few), while Disney can work on the back end to optimize guests’ experiences.

What Disney has created in their closed environment provides a guide to what we might be seeing in cities across the country in the near future, as retailers and tech companies try to use deeper levels of personalization to collect valuable consumer data, improve their businesses, and improve customer experience.

User Analytics & Tracking
So what’s Disney doing with the information that it gets from the wristbands that users wear in its parks? From what we can tell, the wristbands have low-powered wireless technology in addition to the RFID chip. This technology presumably allows the company to understand on an individual and aggregate basis what users inside of their park are doing, figure out where potential points of interest might be, and better understand consumer traffic and purchasing patterns. Everything that we do on a regular basis for consumer websites, Disney will be able to do in the offline world.

While this may scare some folks for privacy reasons, I think Disney is actually going about this process in the right way. First off, if we think about the Disney Parks experience as being like visiting a website in the offline world, then Disney is the first party and what they are doing with the wristbands is no different than what any website does with Google Analytics or their online CRM system. They could attempt to use your mobile phone and a mobile application to track your behavior as many major companies are doing. Instead, Disney is using a wristband that doesn’t contain a GPS transmitter. This means Disney will only be tracking users inside of their property, and every user has a basic understanding that by wearing the wristband in the park they are providing data to Disney. Disney also has a separate and easily understood privacy policy related to the wristbands.

Meanwhile, many retailers have started to deploy this type of technology in their stores — but in most cases, these are not opt-in experiences. Tracking is done surreptitiously, as stores attempt to tie your mobile phone to their CRM data and track you through the store all the way to purchase. Using cell phones as a proxy for the consumer is much more opaque to the user than using a device provided to the user from the retailer.

I think that the successful implementations of this type of technology in a retail setting will have to follow what Disney has implemented — a clearly defined opt-in experience. Users of the wristband are actively touching their wristband and are notified of offers through their mobile phones based on the use of their bands; they submit their information knowingly to be tracked because doing so clearly improves the experience.

Customized Experience
A key feature of Disney’s MyMagic+ experience is the ability to use web and mobile applications to customize and make reservations. This means that even before entering the park, the guest will be able to create hotel and ride reservations, and then later use their wristbands to check-in.

What’s even more interesting is Disney’s ability to use the CRM data created in the application to make your experience more “magical.” For example, when a young girl walks up to a princess, the princess can know her name — and maybe even that it’s her birthday. There’s a creepiness factor to the fact that this princess will know all of this information about the young girl, but the information also creates a familiarity and personalization of the experience that wouldn’t have been possible otherwise.

Again, this is something that retailers have struggled with — how to use existing CRM data to make the offline shopping experience better. On that count, Disney has done two main things right. First, they are able to get the data at the right time. By using the wristbands we assume Disney is able to use low powered wireless technology to get the data when they need to without the user initiating it. In the retail world we tend to only get CRM data at the point of sale, which is usually too late to have a dramatic impact.

The other is that Disney is careful not to scare the guest by revealing that they know too much. One could imagine that if they were visiting a new city and walked into their favorite retailer and were greeted by their name and asked about their favorite product from someone they had never met, that might be bothersome.

It will be key for retailers to use data and insights at the right time, in way that doesn’t feel jarring for consumers.

Band as Brand Value
The most difficult part for any brand will be convincing users that the technology allows for customized offers and a better experience. I could only imagine what would happen if Walmart mailed out wristbands to their top customers and asked them to wear them when they entered the store.

Disney has a great advantage which is that users are already immersed in their brand experience for the length of their stay. However it doesn’t take an immersive experience to convince someone to put on a wearable device. Take a look at the fitness band like the Nike+ FuelBand. Nike not only gets people to wear their band on a daily basis, but also gets people to pay them to wear the band.

Just as there is a value to having a user have a loyalty card with your brand in their wallet, there is an even higher value to having a key fob — or, better yet, a wristband that the user puts on every morning.

Local Membership Organizations
It may be quite a few years before people walk into their local Walmart and are recognized by their wristband — it’s hard to imagine that there will be many retailers that can convince users to wear a wristband whenever they come into the store. It requires not only all merchants, points of sale and payment processors to get on board but also most importantly requires the consumer to possess and remember to use their RFID device (be it a card, phone, key fob or, in this case, a wristband).

I do however think it’s possible for third party brands such as local media companies to build out local membership organizations that could partner with local companies and offer enough benefits to the user that they would wear a band or at the very least put a key fob on their keychain.

While I’ve written about local membership organizations in the past and have even worked with some newspapers on coming up with ideas to help build out a membership organization, none have really captured an understood the opportunity that technology can play in the offline membership experience.

MattSokoloffMatt Sokoloff is a 2012-2013 Reynolds Journalism Institute fellow working on a project to help publishers market their membership and subscription products. His background is in building digital products for media organizations. Read more about his current work here and respond in the comments or to [email protected] or @MattSokoloff on Twitter.

Image courtesy of Flickr user RichardStep.com.