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2. Case Discussion for INTERNET MARKETING Digital Transformation at Disney World The Disney theme park experience...

2. Case Discussion for INTERNET MARKETING

Digital Transformation at Disney World

The Disney theme park experience – whether it is at the Magic Kingdom in Walt Disney World in Orlando, FL or the original Disneyland in Anaheim, CA or one of the newer parks, such as the Shanghai Disney Resort (opening in 2016) – is designed to be an immersive, exciting, and definitely magical experience for guests. Disney famously wants the reality created inside its theme parks to be better than the reality that exists outside. For decades, people have been flocking to Disney theme parks and resorts around the world. And they continue to do so. For example, in 2014, Disney theme parks globally had 134.3 million visitors [1] and the four most-visited theme parks in the world were Disney parks. The number one park was the Magic Kingdom at Walt Disney World in Orlando (19.3 million guests)[2]. At the four theme parks that anchor the Walt Disney World Resort in Orlando – Magic Kingdom, EPCOT, Animal Kingdom, and Hollywood Studios – attendance growth over recent years has been good (see Exhibit 1), particularly given that the U.S. economy had been climbing out of recession and the theme park industry is a mature one.

Despite this kind of stability, which has been fairly typical over the years expect during macroeconomic downturns, and the dominant market share enjoyed for decades by Disney’s theme parks (particularly in the United States), executives at Walt Disney Parks and Resorts (the business unit of The Walt Disney Company that runs Disney’s theme parks), grew concerned in the mid-2000s about longer-term existential threats to their seemingly successful formula of family fun in massive, immersive, carefully-created destinations with expensive attractions and complex operations. They realized that their model was at risk of getting tired and outdated due to shifts in technology usage and how consumers engaged with brands and experiences due, in large part, to smartphones and social media. Disney World was seriously at risk of becoming irrelevant to the next generation of tech-oriented guests.

Exhibit 1. Annual Visitors to Disney World & Year-on-Year Changes

What If We Become Irrelevant?

In the mid-2000s, Disney Parks and Resorts executives started to worry that Disney World was a “burning platform” because, as they saw it, shifts in technology were changing how consumers interacted with brands – including their own.[3] Some version of the same problem was being faced by many companies around the world, of course, not only Disney Parks and Resorts. Nevertheless, executives did not want to miss out on capturing newer, younger guests. They realized, however, that they had a seriously analog product in an increasingly digital world. The worry was that, while kids’ parents might find the Disney experience nostalgic or quaint, their kids – who have a multitude of entertainment options at their fingertips – would not. Thus, the key metric of “intent to return” was under serious threat.

After some initial technology research in 2007, in February 2008 executives formed a secret team to work on reinventing the Disney World experience in order to keep it relevant. Then president of Disney World, Meg Crofton, along with Jay Rasulo (then the chairman of Disney Parks and Resorts) and Al Weiss (then the president of Disney Parks), tasked a small team of business development, Imagineering, and technology/IT executives with this challenge.

The executives felt that guests experienced many “pain points” that slowed down their progression through the theme parks, kept them waiting in seemingly endless lines, and just made the overall visit experience far from ideal and enjoyable. This, coupled with the non-tech nature of the parks that might be a turn off for the new generation of guests, was what the executives saw as threats to guest satisfaction and intent to return. After pouring over data and other resources that enabled them to assess how families navigate the parks and spend their time, they started brainstorming about how they could change. Officially, executives called this the “Next Generation Experience” (NGE) project.

Project NGE and the xBand

The NGE team, still working secretly, were told that they could rethink everything, with the goal of figuring out how to use technology in smart ways to alleviate many of the common guest pain points that dampen intent to return. In other words, the team had to figure out how to digitally enhance the Disney World guest experience.

One of the major types of pain points experienced by guests was having to carry around lots of things – park entry tickets, ride FastPass tickets, money, hotel room keys, and more. To address this the team wondered if some kind of wearable smart device could instead be used by guests, similar to the then-popular Nike+ activity tracking wristband. After fleshing out this idea, the NGE team created a rudimentary prototype system featuring a wearable device codenamed xBand. The device was based on RFID technology and operated as a contactless card that put multiple functions (payments, ticketing, hotel keys, personal information) on a single wristband.

Although this wasn’t going to solve all the pain points that worried executives, the NGE team started to grow excited about the potential of the xBand as a central part of their bigger digital transformation project. This device later became the MagicBand (see below).

The project started to gain momentum, now that they had the central concept of the wristband RFID device in place. Through 2010, the team was developing uses for the device and conceived of the concept of having both short- and long-range sensors throughout the parks that would read the devices. The short-range sensors would be used for “transactional” purposes, such as making a purchase (akin to “tapping” a contactless credit or debit card on a reader in a retail store), opening a hotel room door, or gaining entry to the park or a particular ride. The long-range sensors would be used for “tracking” purposes – basically seeing where guests are at any point in time. The team felt that if they knew more accurately and in real time where concentrations of guests were, park operations staff could react quickly to mitigate, for example, crowding. And because the team envisaged guests having to register their wristbands and provide some personal information, they would also have rich data that would tell them not only what guests were doing but, to some degree, who guests are. This was unprecedented for Disney and the NGE team felt that this could truly deliver on their charge of reinventing the Disney Parks experience.

“It Better Work”

By 2010 the NGE team had grown and moved into a 12,000 sq ft soundstage at the Hollywood Studios park in Orlando. They built what they called a “living blueprint” for R&D that allowed them to test out their ideas in various “scenes” representing all stages of the guest journey. They had a family living room with an iMac computer where parents would book their tickets for the family trip to Disney World on a new website. Then the family’s wristbands would be delivered to their home before they embarked on their trip to Orlando. Following that, there was a mock-up arrival area of Orlando International Airport to simulate transiting from flight arrivals to Disney Resort shuttle buses. After that, a Disney hotel check-in counter and a hotel room. And then there were in-park experience mock-ups: main entrance, retail shops, restaurants, and even a small version of the Haunted Mansion attraction.

This may have been overkill but this was used to show-off how the technology would work to senior executives, such as CEO Bob Iger, and eventually also to board members such as Sheryl Sandberg. The NGE leadership referred to this as “selling the vision” – and it seemingly worked very well. However, their vision was very ambitious. After a March 2010 tour, Bob Iger reportedly told the NGE team to reduce their ambitions and focus only on NGE at Disney World. Despite that he was supportive, but cautiously told the team, “It better work.”

After more visits throughout 2010 and multiple iterations and tweaks, in February 2011 the NGE project was pitched to The Walt Disney Company’s board of directors. Bob Iger was willing to back this ambitious project that was intended to enhance the Disney World guest experience through wearable technology. The board agreed and approved an investment of $1 billion in the project, which was now called MyMagic+ and included the MagicBand device, as well as a website and mobile app on the guest side, plus all the IT infrastructure – hardware and software – needed to make the system work seamlessly.

Although the original plan was for a February 2012 rollout, this date came and went. Instead, the system was being built and tested throughout 2011 and 2012, and implementation was announced in January 2013. It would roll out incrementally throughout 2013, while bugs were fixed along the way, and then eventually be fully completed in the first half of 2014.

Initial Success and What’s Next?

After finally completing the rollout and integration of MyMagic+ at Walt Disney World in Orlando, executives started to wonder when and how their $1 billion in “digital transformation” of the classic Disney theme park experience would be recouped. Early signs pointed to some efficiencies. For example, Disney claims that the wristband system has cut turnstile transaction times by 30% and has allowed for increased park capacity. Disney researchers who survey guests about experiences have also found that in attractions with queuing areas that have interactive features enabled by MyMagic+, guests perceived shorter wait times – a “35-minute wait felt more like a 15-20 minute wait.”[4] Research also showed that intent to return metrics were up and that guest satisfaction was in the 70% range. Overall, it seems that replacing guests’ paper tickets and wallets with an RFID-enabled wristband – and a massive hardware and software infrastructure needed to make it work perfectly, always – was achieving the initial goal set back in 2008 to enhance guest experiences by alleviating pain points. Indeed, Tom Staggs, former chairman of Disney Parks and Resorts and now Chief Operating Officer of The Walt Disney Company, sees MyMagic+ as a successful digital transformation of the Disney parks experience that meets the goals they intended to achieve.

In January 2015 MagicBands reached a milestone of 10 million bands having been used. This was a fairly rapid uptake over the course of just under a year after the rollout was complete. However, reports suggest that not much has really changed compared to life without MyMagic+ (beyond the basic conveniences). For example, digitally enhanced ride experiences or personalized interactions with Disney characters or cast members have not materialized, despite being part of what the NGE team had envisaged.

As 2016 began, with a sense that Disney might have built a technology platform that fails to live up to its potential, executives set about considering a number of serious questions about the future of MyMagic+. They also, more generally, were thinking about what should be done next to further digitally enhance the guest experience to make sure the Disney theme park experience stays relevant to up-and-coming guest segments. Specifically, consider the questions being asked below and briefly discuss about your thoughts.

  1. Is Disney utilizing the MyMagic+ platform to its full potential?
  2. What does the future hold for MyMagic+?
  3. How can they assess whether they are recouping their $1 billion investment?
  4. How should Disney leverage this technology in order to further digitally enhance the guest experience?
  5. What should Disney do next in terms of digital enhancements of the guest experience? Are the MagicBands still going to be important or will guests use other kinds of devices/wearables?
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Answer #1

1.   Disney isn't using the MyMagic+ Platform to its maximum capacity. The RFID innovation in the MagicHand has numerous utilizations past installments, lodging keys, and individual data; the RFID innovation in the band can likewise be utilized to follow client. The band can store data the client gave when purchasing tickets, for example, ride inclinations and most loved character. Client information would then be able to be superimposed with area in the recreational park, giving Disney abundant information on what location(s) are frequented by clients with specific inclinations. At that point, Disney can concentrate its endeavors on improving most frequented areas by underscored the highlights favorited by park-goers.

2.   Since Disney has just put a billion dollars in the stage, MyMagic+ is setting down deep roots. The short-go RFID innovation that Disney has introduced at key purposes of passage, for example, inn entryways and the recreation center passageway, is definitely not a for all intents and purposes resalable resource. Since the framework is as of now set up, MyMagic+ will have the option to follow client patterns with negligible additional expense to Disney. In this manner, information assortment and client examination is doubtlessly the subsequent stage for the framework.

3.   Disney won't have the option to survey whether they are recovering their speculation until significant moves have been made to redesign the recreation center to all the more likely reflect current innovation. With the way MyMagic+ is at present being utilized, Disney isn't recovering its venture. The simple entry gave by the groups is anything but an extraordinary enough motivating force to build the quantity of clients with a "purpose to return".

4.   Disney should utilize MyMagic+ for information assortment, with the aim of adjusting the recreation center to fit client patterns.

5.   Disney should utilize the information gathered from the MagicBands to make sense of the subsequent stages in upgrading the visitor experience. Considering the developing ubiquity of "shrewd watches" with cell phone like capacities, MagicBands will in any case be pertinent for the following barely any years to come. Furthermore, RFID is as yet a sprouting innovation and more uses will be found.

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