September 20, 2010 | Fox Business
Matt Egan
FOXBusiness
Taking a page from the business world’s playbook, at least one NFL franchise has jumped into the game of gathering real-time information on customers, becoming an early-adopter of technology that could develop into a mainstay in stadiums around the country.
Thanks to a newly-installed command center that debuted last week, New York Jets owner Woody Johnson now has the ability to know precisely how many cars are entering the team’s parking lots, how many Darrelle Revis jerseys are being sold, which areas of his stadium have not yet sold out and whether or not any concession stands have run out of beer.
While it’s not new to many businesses, this technology’s debut in the sports world has the potential to boost the bottom lines of franchises and enhance the fans’ experience for the pricey games they attend.
“I think this is just fantastic and brilliant,” said Marshall Glickman, CEO of G2 Strategic and a former president of the NBA’s Portland Trail Blazers. “The kind of information they are going to be able to access in real-time is information that sometimes even as the president of the Trail Blazers I wouldn’t be able to get my hands on for weeks. That didn’t help my bottom line at that moment. This kind of technology has the potential to do that.”
Despite the positive feedback, there are potential obstacles before this technology can become a mainstay in other venues, including owners’ reluctance to change, privacy concerns and whether or not teams want to shell out the cash for their very own command center, especially in this economy
“At the end of the day, the data is great, but it’s only as good as the people that are looking at it,” said Rich Horwath, president of consulting firm Strategic Thinking Institute.
Aimed at Boosting Fan Experience (and Team Coffers)
Chicago-based consulting firm Roundarch built the command center for the Jets and is in informal talks with the NFL and other franchises about installing it elsewhere. Launched during the Jets’ home opener September 13 at the New Meadowlands Stadium, the touchscreen application provides the team with real-time data on parking, concessions, tickets and merchandise, as well as live video from the stadium’s closed-circuit television. Roundarch plans to enhance the command center with real-time traffic data.
The idea is that the Jets can use the data to make fans happier by improving aspects of their game day experience, such as the wait time to get into the stadium and preventing shortages of team merchandise. At the same time, the Jets will have the ability to adjust prices based on supply and demand and thus improve their profits.
“It is contributing to the fan experience in a dramatic way, but if done in the right way, it will also contribute to the bottom line of the franchise in a dramatic way,” David Carter, a sports business consultant and professor at the University of Southern California.
For example, the team could conceivably slash the prices on hot dogs in the fourth quarter if it realizes it is going to miss sales targets.
“Our mission is to provide fans with the best possible stadium experience: the shortest lines, hottest food and most pertinent promotions. Roundarch’s touchscreen application will play an essential role in ensuring we make this season’s fan experience the best one yet,” Thad Sheely, executive vice president of finance and stadium development for the Jets, said in a statement.
David Vanslette, vice president of client services at Roundarch, said, “Logically, you could make the leap of faith that if you can get people in the stadium quicker, based on beer sales, you may end up selling additional merchandise.”
The move is part of an effort in the sports world to increase the fan experience — and not just through better on-field performance.
“There is no question that we are now in an age where pricing for sports is so high that everybody puts a greater premium on customer satisfaction,” said Glickman. “They will not only walk away happier, you will also make more money. The two go hand-in-hand. Making people happy usually results in them spending more.”
Then again, just because the Jets have access to this data doesn’t mean the technology will immediately yield results.
“Being able to be proactive rather than reactive is great. I like it,” said Tony Knopp, president of Spotlight Ticket Management, which provides software that helps companies centralize ticketing and events. “I’ll be very curious to see what it shows them, but I’ll be much more interested in how they react to it. If leveraged correctly, it looks like it could be a pretty powerful tool.”
Potential Obstacles Facing Roundarch
Of course, retailers have for some time been using real-time data on patrons to adjust prices and boost profits. Sports teams have been slower to adopt the technology.
“It just reinforces that as strong and vibrant as the sports business world is, they are still trying to stay in front of those spending money on their product,” said Carter.
Roundarch, which completed a management-led spinout from Deloitte in 2005, is likely to have to leap a number of hurdles before achieving widespread adoption of its command center.
For starters, team owners are often resistant to change, especially before the technology is proven to be successful. Since it’s not fully-operational yet, it’s too early to say how much the Jets’ command center will help their finances and improve the fan experience, if at all.
There may also be privacy issues as some fans may also not appreciate the technology. “The big hurdle is balancing the wants and needs of the team with the wants and needs of the consumer and not making them feel like everything they do is being watched,” said Carter.
At the same time, given the tough economic environment, some teams may be hesitant to shell out the mid-to-high six-figure price tag Roundarch said the technology will carry, although Knopp said that figure “doesn’t sound unreasonable.”
Also, Vanslette said the technology’s biggest constraints are with vendors in the stadium that may not be able to support queries during the game or are reluctant doing so will crash their systems. Vanslette said the company has been in talks with vendors in an effort to fix that problem.
It’s still too early to tell if Roundarch’s command center or a comparable system will catch on in the NFL and other leagues.
However, because of its potential to help teams manage their finances while simultaneously improving fan loyalty, Horwath predicted, “I think there will be a lot of people jumping on the bandwagon pretty quickly.”