Why thinking online and offline as separate is a mistake

Disney has spent US$1 billion on MyMagic+ - a next-generation technology-fueled customer experience that transforms the way its guests play, stay, and pay at the "most magical place on Earth."MLB & NFL went digital with around 20 MLB ballparks boasting iBeacon-enabled experiences for fans in the stands this season. Not to be outdone, the NFL will enhance its game-day experience with in-venue seat upgrades, exclusive offerings for season ticket holders, and experiential opportunities for fans.Starwood Hotels enabled mobile room keys to skip the front desk line. By Bluetooth-enabling door locks, guests can check in and open their door using their smartphone.What these developments show is that the distinctions between online and offline as well as physical and digital are no longer relevant.That doesn’t mean that technology is or should be the focus. Technology is simply an enabler for experiences. As Disney’s Thomas Staggs says, “I think that tech for its own sake in our park should not happen . . . It’s not about the technology. It’s about the magic that it creates. The place, the mood, and the time.”These new hybrid experiences will be the rule, not the exception, in the years to come. Why? Because they give firms new opportunities to create experiences that:■ Reduce friction and increase efficiencyCustomers simply want to enjoy experiences, but the mechanics of paying for and managing access creates undesirable friction. Digital technologies such as those in use by Disney, Starbucks, and others eliminate friction in interactions and open up new opportunities for making experiences more enjoyable.20 Restaurants no longer need to be constrained by hosts, wait staff, and room size. Seating can extend well beyond the restaurant’s walls as food is brought to your physical location, digital menus enable ordering on your smartphone, payment happens automatically, and servers are called to clear the table when you leave the area.■ Enable more personalised experiencesDigital-enabled customers in venues are no longer anonymous customers. The ability to connect customers’ digital profile, preferences, history, and context to their physical presence opens up opportunities to serve them in more meaningful and relevant ways. Having Mickey Mouse address your child by name is just the start.■ Remake loyalty and reward programsCompanies used to measure loyalty by purchases, but the infusion of digital technology in physical experiences encourages us to rethink loyalty to include new behavioral metrics like number and duration of visits to specific locations. In addition, the types of rewards granted to customers exemplifying desired behaviors will expand.For example, high-value Disney guests could be rewarded with instant FastPass+ access to rides as they approach a long line.■ Increase customer understanding in the analog worldIn the online world, web analytics gives companies tremendous insight into customer behaviors — what they search for, where they go, what they do, and how long they do it. In the physical world, however, companies know relatively little about their customers. Technology such as Disney’s MagicBands is changing this. Disney now knows how many rides guests rode, how long they spent in the park, where they went, and what shops they visited. This level of detail on customer behaviors will bring about a rebirth of customer understanding and experience improvements in the analog world.21The writer is Tony Costa, Senior Analyst, Forrester Research.