Apple and Disney Launch and Learn with Wearables

May 17th, 2015     by ddeal    

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Apple has some work to do with the Apple Watch. Early adopters are criticizing the new wearable for a host of problems, including limited battery life. In other words, development is progressing on schedule. Apple is breaking into a nascent market with an imperfect product just as another huge brand, Disney, did two years ago with the launch of the MagicBand wearable that manages most facets of a guest stay at Walt Disney World. Disney faced criticisms for a new device, addressed them, and is seeing strong uptake two years later. Apple will, too. The biggest challenge Apple faces is investor expectation that every new Apple product will take hold immediately like the iPhone or iPad. The Apple Watch is different: it represents an entry into an evolving market, more akin to the first Model T automobiles. (By contrast, the iPhone cracked an already established telephony industry.) As I discuss in a recently published white paper, both Apple and Disney are acting on a vision to change the way we live. Following is an excerpt discussing why I believe they will succeed.

Ease of Use

Apple and Disney designed the Apple Watch and MagicBand to look good, and they need to look good. The devices are designed to be visible extensions of you, worn prominently on your wrist instead of being tucked away in your pocket. Disney wants Disney World patrons to use their MagicBands to manage their entire stays, including checking into their lodging, buying souvenirs, reserving their ride times via the FastPass+ system, and getting their meals served — akin to using a wristband to live in a city. Apple has even grander ambitions: your Apple Watch is the key to not only buying goods and services, but also handling myriad other aspects of your life, such as managing your fitness.

Apple and Disney need you to feel comfortable about wearing your devices, and for good reason: wearables have been marred by ugly design, and who wants to wear a device that embarrasses the owner? Appearance is so crucial that Apple has departed from its usual custom of providing simple product options and instead provides 38 different Apple Watch designs, ranging in price from $349 to $17,000. Similarly, the Disney MagicBands are available in many different colors (at prices ranging from $12.99 to $29.99), and Disney makes it possible for MagicBand owners to “show off your Disney side” by customizing its look with accessories such as an R2-D2 Magic Slider.

But what makes Apple Watch and MagicBand game changers are their ease of use. Both devices eliminate an action: digging through your belongings to conduct an action. Have you ever found yourself fumbling around for your iPhone to search for a restaurant on Yelp? Dropped your Disney room key while trying to lasso your kids as you dig through your backpack? Apple and Disney just eliminated those aggravating moments and replaced them with more fluid, graceful user interfaces such as swiping, glancing, and speaking.

Pervasiveness

For the products to take hold, they need to be more than user friendly; they need to be pervasive. As Austin Carr of Fast Company notes, Disney designed the MagicBands to support your visit to a metropolis spanning 25,000 acres, comprising four theme parks, 140 attractions, 300 dining locations, and 36 resort hotels. To make the MagicBands work, Disney installed more than 30 million square feet of WiFi coverage, akin to wiring an infrastructure the size of San Francisco. The result is a tool that supports your visit before you even arrive at the park. As Cliff Kuang of Wired writes,

It begins when you book your ticket online and pick your favorite rides. Disney’s servers crunch your preferences, then neatly package them into an itinerary calculated to keep the route between stops from being a slog—or a frustrating zig-zag back and forth across the park. Then, in the weeks before your trip, the wristband arrives in the mail, etched with your name—I’m yours, try me on.

If you sign up in advance for the so-called “Magical Express,” the MagicBand replaces all of the details and hassles of paper once you touch-down in Orlando. Express users can board a park-bound shuttle, and check into the hotel. They don’t have to mind their luggage, because each piece gets tagged at your home airport, so that it can follow you to your hotel, then your room. Once you arrive at the park, there are no tickets to hand over. Just tap your MagicBand at the gate and swipe onto the rides you’ve already reserved. If you’ve opted in on the web, the MagicBand is the only thing you need.

As Kuang suggests, one of the less obvious but important keys of the MagicBand’s success is the way Disney sets you up to use the wearable before you leave home for your vacation. The My Disney Experience website acts as home base to do all the heavy lifting for your vacation planning. On the website, you do all the important set-up, such as booking your room at Disney resorts, making dining reservations at on-property restaurants, purchasing theme park tickets, reserving your FastPasses for your favorite rides, and ordering extra services such as the MemoryMaker for photos. You can also purchase your MagicBand and have all the details about your stay transferred to your band.

And then, of course, you eventually leave the website behind. While you are on property, you support your visit through digital in two primary ways:

  • The My Disney Experience app (for your mobile device) helps you manage your FastPass+ selections as well as let you know what the wait times are for other attractions in the park.
  • The elegant MagicBand supports all your transactions and functions that do not require checking information or notifying.

Providing a comprehensive website for vacation planning and a simple wearable for onsite functions is a brilliant strategy. By guiding guests through their customer experience — from vacation planning to the actual visit — Disney keeps guests on property. And with stiffer competition emerging from Orlando attractions like the Wizarding World of Harry Potter, keeping tourist dollars in Walt Disney World isn’t easy. Disney is correctly anticipating that especially for families, the convenience of staying in one cluster of Disney theme parks is a powerful lure. The longer you stay, the more you pay. And swiping your wrist instead of digging for your credit card means more impulse purchases on Disney property.

Here’s how Carolyn Heneghan of The Motley Fool describes the commercial appeal of the MagicBand:

The easier it is to make a purchase — such as swiping a card versus counting dollars and change — the easier it is to spend money. Convenience, coupled with delighted ignorance of price or necessity, often leads to an impulse buy.

And that is exactly what Disney is banking on.

With MagicBands, Disney hopes that if it’s easier to make dining reservations from a smartphone app, then guests will make more dining reservations. If guests don’t have to take their credit cards out to make a purchase, the easier and faster it is to close on merchandise sales, before guests have time to second-guess their purchase. Easy FastPass+ ride reservations help to keep guests in the park longer, and spending their travel allowance.

Plus, additional revenue streams, such as limited-edition bands that cost more than twice the retail price of the standard band — and wristband accessories at extra cost — rake in still more cash.

The formula is simple: make it easy for guests to spend, and have fun doing it.

Meantime, Apple seeks to make Apple Watch the fabric of your entire life. As I noted in a recently blog post for BeyondCurious, thanks to the integration of third-party apps, the Apple Watch came out of the gate in April with the ability to help you do everything from read the news to pay for your parking meter. Consider just a few of the ways you can use the Apple Watch depending on which app you’ve loaded:

  • Track how much food and water you consume throughout the day.
  • Manage your monthly spending and saving.
  • Adjust the lighting and heat in your home, assuming you own a WiFi enabled thermostat, lights, and bridge.
  • Create a shopping list and find items in a store.
  • Check into a hotel and open the door to your room.
  • Pay for a cup of coffee.

According to TechCrunch, more than 3,500 apps were available when Apple launched the watch on April 24. By contrast, then Apple launched the iPhone in 2007, no installable apps were available (only those that came with the phone). Apple wisely empowered third-party developers by releasing WatchKit tools shortly after the watch was announced in fall 2014. And moreover, a crucial element of Apple Watch isn’t even an app: it’s the Apple Pay technology inside the watch that makes it possible for consumers to pay for goods and services with a simple swipe of the wrist.

We’re still in the early days of Apple Pay, which was rolled out on October 20, 2014. Within three days of its launch, more than 1 million credit cards had been registered on Apple Pay via iPhone 6 owners. Disney World began supporting Apple Pay in December 2014, and Whole Foods reports a 400-percent increase in mobile payments since the launch of Apple Pay. As of May 2015, all four major credit-card companies — American Express, Discover Financial Services, MasterCard, and Visa — now support Apple Pay. As consumers become more comfortable with the security of mobile payments, and as more consumers buy into the ease of swiping to pay for goods and services, I expect Apple Pay will live up to Tim Cook’s prediction that 2015 will be the year of Apple Pay — creating a mutually reinforcing growth for Apple Watch.

Launch and Learn

Seldom are new products perfect. But Apple and Disney have the resources and long-term vision to test, learn, and improve. And here is where a massive market maker brand wields an advantage: they can afford the imperfect start. The question is not if, but when. Disney reports that the MagicBand is enjoying rapid uptake, with half of Disney World guests having used them in 2014. Whether Apple Watch becomes a niche product for upscale consumers or a popular wearable remains to be seen. UBS Analyst Steve Milunovich claims that Apple “somewhat botched the debut of Apple Watch” with a flawed roll-out. But his criticism was couched in context of a vote of long-term support: “We are long-term bullish on the Watch as the interface to the Internet of Things; the wrist is a natural place to put Apple technology.”

I agree with Milunovich’s assessment that we are in “just the first inning.” Both Apple and Disney are entering a still-new field, wearables, as opposed to making a major leap in an already-established industry, as Apple did by introducing the iPhone. Apple and Disney will succeed — not because they have introduced a better product, but because they are making new behaviors natural.


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