5 Things retailers can learn from booking a “smart” cruise!

12
211 views

Share on LinkedIn

The future of customer experience is on that cruise ship in the harbor

At CES, there was a lot of continued hype about “smart” homes and how it will change your life (eventually). The challenges of connecting all of it still leaves the customer experience to be piecemeal at best. CES also included dramatic demos on VR and AR, which have the potential to change customer experience in retail stores. But, perhaps the best demonstration of what is possible today for seamless, end to end consumer experience may have been Carnival Cruise’s CES announcement of the “smart cruise”. Carnival is launching their own version of a Disney like “magic band”, which creates an immersive personalized experience that follows you everywhere, and spoils you rotten … and it starts before you even set foot on your cruise ship.

Why this is important: Consumers expectations rise every time they have personal experiences which exceed the norm, and they bring those new expectations to retail with them. Retailers must now reach beyond traditional store design to start delivering personalized experiences that customers know are possible today.

The Magic of Disney brought on board to transform your cruise

The true joy of taking a cruise is being able to abdicate responsibility and just kick back to enjoy. The expectation is having everything taken care of, and being pampered every step of the way. Want a special seat at a restaurant? There should be a way to do that easily, without waiting in line. Don’t want to go to a restaurant? You should be able to click order food and have it brought to where you are on the ship! Have kids on board? You should be able to track where they are at all times.

Want to see what all the magic is about, take a minute to watch the smart cruise video!

John Padgett, who led the Magic Band team at Disney has transported the same concepts and technology to the Regal Princess ship in the Carnival line. Padgett describes the vision of creating the “smart cruise” as: “Our focus is the end-to-end guest experience being holistically delivered in a personalized way, a simplified way.” Said another way, Carnival wants to take away the pain points and provide customers whatever they want, when they want it, in easiest way possible. Literally their own personal, smart experience “portal”.

The magic of the “Medallion” brings amazing personalization to life

To accomplish that objective, Carnival has created the Ocean Medallion which enables an individual real-time connection to each specific guest on board. Like the Disney Magic Band, each Medallion is personalized for each guest. It literally has your name carved on it! You wear it on your wrist, or as a necklace, or carry it in your pocket. It tracks where you are on ship, what you’re doing, and what you might want to do next.

Carnival Smart Cruise

The Medallion room key literally becomes your portal to everything for your experience on board, and onshore. You can also interact via the Medallion with a network of 4,000 high res 55 inch screens scattered throughout the ship to find directions, see all the offerings and book anything your heart desires. The 7,000 sensors on board the ship know when you walk toward your room and personalizes the temperature and lighting automatically.

If they know everything about you what is the “creep factor” and risks?

The proposed level of personalized service could be downright spooky in some ways. A ship that knows who and where you are, as well as what you want and when you want it, could freak you out if you are not used to this kind and depth of personalization. However, it is a classic case of the growing consumer tradeoff of giving up some personal information in order to get unprecedented levels of service and personalization.

Carnival (and Disney) have compared the Medallion concept to a “license plate” that is used for identification to enable personalization, but individual’s personal information remains encrypted and kept in the cloud. Yet, some passengers might be concerned by the “ship” knowing too much. There is definitely need to inform passengers upfront of what is involved, and enable them to have some control over how much personalization they want for themselves. The ultimate option for passengers is simply not to wear their Medallion when they don’t want to be bothered, or tracked. However, Carnival is betting that once experiencing unprecedented levels of personal service, customers will opt in like they have with the Disney Magic Band.

Results Count: Will there be ROI on all of the investments required?

On Carnival’s Regal Princess, they had to install 72 miles of cable and installing 7,000 sensors is not cheap! Not to mention the 4,000 interactive 55 inch displays on board, and all of the systems an infrastructure costs. A huge investment cost for sure!

All of this investment is not totally about you the consumer and your experience. By having you wear the magic on your wrist enables Carnival to turn off lights and turn down a/c saving money when you are not in the room. And, imagine how many more margaritas, massages and shore excursions Carnival will sell by making it so simple to book by using a Medallion on your wrist that unlocks personalization for you everywhere.

7 Key learnings for retailers Carnival’s “smart cruise” test unfolding

The retailer C-Suite would do well to step outside of the box and book a cruise to explore what is now possible. While retailers can’t afford the same levels of Carnival and Disney investments, they can extract core concepts from the “smart experience” that can be adapted and applied online and in stores:

  1. The smart experience starts online The genius of Disney and Carnival is the rich content they use to demo the personal experience you will have online.
  2. The smart experience arrives personalized at home – The smart Medallion technology arrives at home personalized with your names before you even depart.
  3. The smart experience begins immediately when you enter – On Carnival there is an immediate benefit of not waiting in line to check in and board your ship.
  4. The experience must be “seamless” and easy – No phones, no apps … you just wear the Medallion.
  5. The value is addictive when personalized across every area – Medallion works when your board, to enter your room, and everywhere for most everything on the ship.
  6. To be used it must be simple and omni-present – There are no staff dependencies … it works 24/7, everywhere, plus it even brings services to you where you are.
  7. The experience “sticks when it follows you home – The real value is when the experience follows you home and you start thinking about your next cruise, and becomes even more powerful when you become a brand advocate who can stop spreading your experience story by word of mouth.

While retailers might not be able to afford to replicate a Medallion experience, consumers will be drawn to the retailers who can adapt and create a differentiated experience like Carnival and Disney. Apple and GameStop are already applying personalized components in store.

There is a grand customer experience experiment unfolding at Disney and the cruise lines. Retailers would be very wise to take a ring side seat and extract best practices they can adapt to create a personalized customer experience, which will become their core differentiator, seamlessly integrating online and stores.

Sources: 

  • Wired: Carnival’s High-Tech Cruise Wearable Knows Your Every Need, Brian Barrett; January 5, 2017
  • BrandChannel: CES 2017: Carnival Introduces First Smart Cruise Experience, Sheila Shayon; January 4, 2017
  • YouTube: Ocean Medallion – The Experience – Cruise line

12 COMMENTS

  1. Chris, you rightly write that the ocean medallion “is a classic case of the growing consumer tradeoff of giving up some personal information in order to get unprecedented levels of service and personalization”.

    You also correctly write “All of this investment is not totally about you the consumer and your experience. By having you wear the magic on your wrist enables Carnival to turn off lights and turn down a/c saving money when you are not in the room. And, imagine how many more margaritas, massages and shore excursions Carnival will sell by making it so simple to book by using a Medallion on your wrist that unlocks personalization for you everywhere.” This basically says it is a driver for additional profit by tackling both: Topline and Bottom Line (increase revenue, reduce cost – the latter being possible with far cheaper technology).

    And here is the dilemma: The customer needs to trust(!) that the main purpose of the medallion is to increase their experience. And having done some cruises myself (or shall I say, endured 😉 ) I would argue that Carnival doesn’t differ from the other cruise operators – which predominantly are interested in increasing their profits by making customers buy more stuff. And in order to make sure of this things that one might want to do, or normally does – will hardly work without the new gadget.

    My point is: As long as a perception like this exists (and Millenials seem to bother less) there is another promise of customer centricity that is not kept, but used as the proverbial fig’s leave. Which one is it for Carnival?

    Thomas
    @twieberneit

  2. Thanks for your comment Thomas! Very perceptive … you have nailed a critical issue going forward. Will the providers of “omni-access” and convenience abuse the privilege and violate the trust of consumers?

    As for Carnival, Royal Caribbean, Disney and all of those that follow the path of omni-presence with the consumer … do NOT violate their trust! Consumers today are far more astute than the past. The lure of connectivity will quickly fade if consumers discover that it is all a ruse to abuse their trust and use their data to merely sell.

    My point, consumers are becoming much more adept as discovering real value for the trade of their information. What is now somewhat unique technology will quickly become common place … and those that win will provide a quality experience with customized value.

  3. As I read the set of capabilities offered by the Ocean Medallion, I found myself asking ‘and what, exactly, is the customer problem – or problems – Carnival seeks to solve?’ I’ve only been on one large-ship cruise, and never found it onerous to order a margarita from a bartender or waitperson, or to activate/deactivate my cabin’s lighting. Further, I don’t understand what value would be delivered to me by automatically instructing a person (or machine?) to prepare my libation with salt on the rim. Maybe I don’t like it that way every time. Or, maybe I’m adventurous, and prefer to ask the bartender what he or she recommends. After all, I’m on vacation – get wild and crazy!

    Further, how would Carnival’s ‘smart’ algorithm know that the drink it just prepared is for me – and not for a special friend who I just bumped into at the disco?

    Club Med Resorts had a famous slogan that has stuck with me: ‘the antidote for civilization.’ Maybe millennials aren’t seeking such antidotes. But for me, Carnival’s spinning this ‘personalization technology’ as benign seems a stretch. Surveillance would be more accurate, but it doesn’t translate well into marketing prose.

    Still, I don’t argue with success, as long as it’s ethical. If making this technology an integral part of the passenger experience appeals to enough people to raise revenue and profit, then Go Carnival! But I won’t be heading to their website to book a trip.

  4. Thanks for astute observation and comments Andrew!

    I would respond in a similar vein … on the cruises I’ve been on, it is not onerous to get a drink or be over fed at the many places to eat on board.

    Carnival’s new Medallion is “not essential” to enjoy the cruise. Nor is Disney’s Magic Band essential to visit their theme parks. But after talking with parents who acquired the Magic Bands for their family, the stories of how the device changed their experience are endless.

    I think that Carnival will have to very careful not to violate consumer trust and use the Medallion purely as a way to raise revenue and profits. There are no lack of cruise vessel options. If customers feel violated in any way they will be very vocal on social media. Poor word of mouth reviews will trump most any corporate marketing.

  5. Chris, I am with Andrew here. Looking at the Ocean Medallion FAQ http://www.princess.com/ships-and-experience/ocean-medallion-class/ocean-faq/ I, too, wonder, what problem it solves for the customer. I think it rather solves a problem for the cruise line (incremental revenue). The only two possible values for me as a parent could be to know where my kids are on the ship – but then I do not know precisely where they are when they are playing around our home as well – and the form factor as I am not a big fan of lanyards to carry around a checque card sized piece of plastic.

    Of course I speak without having used one so far 😉 – purely using their own documentation, which doesn’t convince.

    As Andrew said, as long as they stay within the boundaries of common ethics and keep the data safe it is hard to argue with success. At minimum they now have something that people talk about and that, for a while, might be a distinguishing factor.

    Thomas
    @twieberneit

  6. Thomas – looking forward to reading your post.

    It doesn’t take much imagination to understand the intimate personal details that this technology, coupled with sensors in the cabin, might surreptitiously collect about people aboard a cruise ship. Take a moment to consider what might be revealed, and then remind yourself that your conclusions are not theoretical. I understand how Princess is spinning Ocean Medallion as fun and helpful, but I find the technology repelling (Disclosure: I don’t wear a fitbit, Apple Watch, or other connected wearable device).

    You mention that if customers feel ‘violated’, that they will be vocal on social media. But that assumes they even know, or think to ask about:

    1) what data is being collected about them
    2) who has access to that data
    3) how that data will be used
    4) whether the data will be shared with third parties, and for what purpose(s)
    5) how (or whether!) that data is protected, and for how long

    The Princess website discloses none of this, and I’d wager that most Princess customers don’t have a clue. At the risk of sounding harsh, any passenger who doesn’t recognize that the data they are passively providing to Princess might be used for more than making the welcome experience more “seamless,” or ensuring that the right bottle of wine is delivered to their table, is naive.

    I contacted Princess today to ask them about the Ocean Medallion, and privacy protection. Aside from describing “safety mode”, whereby a passenger can opt out of the more advanced functions, the agent had no information about customer privacy protection. This amazed me, considering that what I was asking about was a wearable device. But to be fair, I knew that my question was one that the agent rarely encounters.

    When it comes to harvesting intimate customer data, however, that question should never be unusual. And that’s an emblem of an ugly problem: consumers don’t understand what they give up with nifty ‘personalization technology’. And the Princess marketing speil is remarkably unhelpful in this regard. Their video makes everything about Ocean Medallion look so . . . marvelous. Especially for customers who feel naked without carrying a piece of interactive technology, even while they’re on vacation.

    So I’d like to make a proposal – a plea – that as marketers and technologists, when we espouse the revenue and profit possibilities for nifty new ways to collect customer information, we balance evangelism with a description of potential misuses and abuses. That, and an acknowledgement of the potential for customer harm.

    If companies such as Princess want to deploy surveillance technology (which is essentially what Ocean Medallion is), they should do so only by disclosing the answers to the five questions I asked above, along with their customer data governance policies, and making it fully available to consumers.

    A related article I wrote might be of interest: Targeting Vulnerable Customers: The Dark Side of Lead Generation http://customerthink.com/targeting-vulnerable-consumers-the-dark-side-of-lead-generation/

  7. Great to have an exchange of ideas on this topic Thomas! I look forward to reading your post on the topic.

    This topic will only become more important in the future. Carnival and Disney are upfront about tracking you and engaging you on their properties. Many retailers are “quietly” tracking you in their stores via your cell phone and saying very little about it, how they are using the data, or making you aware so you can opt out.

    Customer tracking and location analytics will be very big topics in the future of retail, and consumer reactions to trading their information for some value.

  8. Andrew, you have written a very thoughtful post about consumer awareness and rights. I support your 5 questions. I wonder how many retail stores will actually step up and inform customers how they are being tracked by their phones, and how that data is being used.

    We are entering new times of unprecedented “surveillance” and collection of personal data. Best advice for consumers – be aware and assert your options for rights to privacy.

  9. Hi Chris: thank you for your comment about my post. There’s endless talk in the biz-dev blogosphere about customer centricity. But it’s uniformly in the context of driving loyalty, gaining market share, and growing revenue. In other words, WIFM – what’s in it for me, and what’s in it for the business.

    Painfully, few within our community have stepped up to openly acknowledge that digital surveillance is often used for malevolent purposes. That, and the indisputable fact that customers are harmed financially and physically in the process. It’s impossible to detach the two.

    While it’s generally good advice for consumers to be aware and to assert options for rights to privacy, try telling that to a pregnant nineteen-year-old single girl with a high school education who just went online to get an emergency loan, or to find some needed baby equipment. How can she be expected to assert her privacy options when she’s unaware of the sophisticated data harvesting machinery that’s working behind the online forms she’s diligently – and most likely, desperately – populating?

    And such surveillance occurs in the physical retail world as well. How Target Figured Out That a Teenage Girl Was Pregnant Before Her Father Did. [http://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/#287ac45334c6] Fabulous as Target’s surveillance might sound if you’re into how to glean insights about customers, it’s a tocsin about the very real potential for retailers and other businesses to abuse information and to harm innocent people.

    Meanwhile, in our community, we continue to spread the myth that “consumers have more information power than ever.” As a practitioner in information technology and business development, that idea bothers me a lot, because it creates the illusion that information asymmetry favors consumers. In some instances, it does. But continuing to pound that idea home creates a smokescreen behind which unscrupulous marketers can operate. In particular, I’m speaking of the ones I mentioned in the article I cited in my previous comment. (It’s worth noting that consumers have few protections when it comes to what information is collected about them, and how it’s shared. And the upcoming Trump administration doesn’t portend to support more robust consumer protection policies.)

    I urge more balanced analysis and discussion of the technologies and programs you described in your article, and encourage all practitioners to ensure that any program that involves the collection and use of customer data is inadequate and incomplete without strong governance, and privacy policies that are not only made known to customers, but also enforced.

    Again, thanks for your ideas, and for posting this valuable article.

  10. Hi Andrew, few years ago the going mantra was that the customer is in control – I think it was never true, although there was – and is – more information available to customers than ever before. The asymmetry that you mention is due to a normally more focused approach that a customer has. After all they have an objective, a job-to-be-done that they are searching some help for. Companies had and have the challenge of a 1-to-very many reach out, and, of perhaps, ‘insufficient data’.

    This information asymmetry that may have been there before, was because of lacking power to run the necessary/relevant algorithms at scale on the available data.

    With the advent or rather coming of age of high performing systems, advanced analytics, AI, machine learning, IoT, sensor networks, and the brute computing power that cloud systems can deliver the pendulum swung back again.

    The previous asymmetry is back. One could say: Companies regained control.

  11. Hi Thomas – the information asymmetry I mentioned pre-dates data mining and predictive analytics. The way I see it, asymmetrical information is an essential characteristic of a capitalist economy; a fundamental that underlies any buyer-seller transaction. Namely, customers don’t fully know the amount a producer is wiling to accept to complete a sales transaction, and producers don’t exactly know what customers are willing to pay. There’s a lot more stuff, too, if I were willing to formulate a long list at the time I’m writing this.

    So every day, buyers and sellers engage in transactions where the information is unbalanced. Sometimes that asymmetry favors buyers, and other times it favors sellers. And always, in different ways. Mainly, it’s incorrect to say to say that the “pendulum has swung permanently” one way or another. And it creates confusion to say that “customers have more information than ever.” First, it’s simply not true for every product and every market (next time you go to the grocery store, try to discover exactly where your food products came from), and second, having access to information doesn’t logically extend to having power. That assumes the ability to derive insight and understanding from information – something that isn’t a foregone conclusion.

    In any case, thanks for a great discussion!

LEAVE A REPLY

Please enter your comment!
Please enter your name here