Is Disney the New Google or Groupon?

Disney's new in-park technology is cooler than you think.

Rick Munarriz
Rick Munarriz
Apr 30, 2014 at 11:02AM
Consumer Goods

Disney (NYSE:DIS) is arming itself with some pretty potent technology in the form of the MyMagic+ and FastPass+ initiatives that it's been rolling out at its Disney World resort in Florida. Last week I discussed how the family entertainment giant is using the platform to enhance the in-park experience by getting to know its patrons a little better. Now let's talk about how Disney is raising the bar by simply knowing where they are. 

A key component of the roughly $1 billion technological upgrade is the MagicBand. Guests staying at any of Disney's on-site resorts have been receiving wristbands with RFID chips for months, but this month they became available for guests to purchase at select stores across the theme parks. These bracelets allow patrons to reserve as many as three expedited attraction queues a day, and resort guests can also use them for purchases, getting into their rooms, or tracking PhotoPass accounts. 

Goofy tech isn't goofy tech 
The MagicBand is neat, but it's also cheap tech. There's no LED display since all of the information comes from the scanners set up at ride entrances or points of sale. There's a reason that Disney's giving them away to hotel guests and charging day guests just $13 to buy them. These aren't FitBit fitness trackers, Pebble smartwatches, or fancy wearable computing devices. They're just RFID chips that snap around your wrist. However, just as Disney's taking the information from the readers and scanners to get to know its visitors a lot better, the smartphones that guests are packing hold the key to how Disney can cash in while tourists are still enjoying the park.

Google (NASDAQ:GOOG) (NASDAQ:GOOGL) and Groupon (NASDAQ:GRPN) have championed the art of local advertising. Google isn't the world's largest platform for advertisers by accident. It is relevant at the local level, and everything from its popular Google Maps to its market-leading Android mobile operating system revolves around pinpointing where people are so that it can deliver the most effective pitch from a nearby merchant.

Groupon is the undisputed champ of the flash sale, offering merchants access to its 44.9 million active customers if they're willing to offer great deals and give Groupon roughly half of the value of the prepaid vouchers. In an effort to fine-tune its reach, it rolled out Groupon Now, a mobile feature that offers deals that are closest to the exact location of the user.

Google and Groupon have spent a lot of time and money to pinpoint where mobile users are and what they're into, but Disney may have them beat with its My Disney Experience app. In its present form it's a tool for park guests to check the wait times and character appearances that are closest to them. Distance is measured by feet when you're in the park. It also allows you to check or change existing FastPass+ and dining reservations that you may have. The takeaway here is that Disney knows where you are, knows what you've done, and, through a mobile app that visitors are monitoring throughout the day, can push deals and notices that will take things to a new level.

Welcome to Tomorrowland 
The MagicBand itself is great. Technology on Disney's end can eventually allow characters to call out guests by name or display rider geography information at the end of It's a Small World.

And the app allows Disney to push information back to guests instead of merely pulling data. Guests can receive Groupon Now-like deals. If there's an overstock of Jack Sparrow T-shirts at a nearby store and the family's gone on Pirates of the Caribbean three times in their past four visits, there's a golden opportunity to offer an online coupon as they walk through Adventureland. If a resort guest has an affinity for the park's signature turkey legs or Mickey Mouse-shaped pretzels, there's nothing to lose and everything to gain by notifying them that there's no wait at a nearby kiosk.

Mickey Mouse as Big Brother is going to draw some cruel comparisons. There will be privacy concerns, and some may equate MagicBand wristbands to shackles. However, for the vast majority of guests that are Disney fans, the ability to receive discounts or advance notifications of the items and experiences they like will be a game changer that no other theme park operator can offer. We accept that Google knows us well enough to serve up relevant ads in cyberspace, and the same can be said about Groupon's flash-sale pitches. When in Disney World, make room for Disney in that conversation. Disney's about to be become a better marketer as MyMagic+ plays out, and that will ultimately be good news for investors.