The Magic Band system at work in Walt Disney World

If your company operates physical stores, you face all sorts of challenges. In addition to the same ones facing anyone in the real estate business, you also must confront the threat and opportunity presented by mobile devices. That means you must:

• Set a pricing strategy in an era dominated by customers using your floor inventory to shop online for a better deal, a phenomenon knows as “showrooming.”
• Know how to use new sources of data to more effectively target your customers.
• Communicate with customers in new ways, for example via Facebook, Twitter, and direct email, and invite them to communicate back.

Wouldn’t it be great if you could use mobile technology to recreate one thing brick and mortar can do better than digital e-tailing can do: really know your customers?

If a company could bottle and scale the personal intimacy of, say, a retail employee who had worked in the same store for 10 years or more and had a long list of loyal customers about whom she knew names, family members, preferences, and more, that would deliver a significant competitive advantage.

Just such a solution has hatched in a place long known for innovation and delighting consumers: Walt Disney World.

Last year, Disney introduced a system called Magic Bands, which are watch-sized bracelets worn by guests to help them manage a number of tasks in the park. The bands serve as a hotel room key, a pass to the theme parks, a payment mechanism for meals and souvenirs, and tickets for certain rides that customers can reserve in advance, thus cutting their wait times. (Anyone who has been to Disney theme parks will tell you that reducing your time spent in line is the most important key to a happy visit, perhaps even more consequential than the weather.)

I’ve included a photograph of a Magic Band and the hardware Disney uses to interact with the bands at attractions throughout its parks. It’s spherical, with a brassy metallic surface featuring an outline of Mickey Mouse that glows green when it pairs with a Magic Band or red when it does not recognize the band.

Not only has Disney built a system capable of capturing vast amounts of useful customer data with which it can create more customized, targeted experiences. It has added a new, part physical, part virtual barrier separating its attractions from the outside world.

Tapping a Magic Band against the sensor and watching Mickey’s outline glow in a swirling light creates a sense of anticipation that merely walking through the main opening cannot replicate. It communicated a “You may pass” message, affirming our eligibility for everyone to see, especially people who had to wait in longer lines. My daughters became visibly delighted triggering this effect with their bands, and I’m sure they got onto rides feeling more excited and more open to surprise than they would have without the bands.

Disney’s Magic Bands show one way retailers can get closer to their customers.

Imagine you walk into your favorite apparel store and find yourself greeted by a sensor bearing an LCD screen. You tap your phone to the sensor, and it welcomes you by name with a colorful animation, giving you another way to perceive the barrier between the inside and outside of the store. The perception that one has entered a special place is one key to driving purchases.

Now, the store knows you have arrived. WiFi tracks your movement. Linking to a loyalty account, the store knows what you’ve bought, browsed, and returned. It knows your size and color preferences. It may even know lifestyle details relevant to your shopping based on what you have agreed to share on social media. It can use this information to direct you to new arrivals, discounts, and items shoppers with similar profiles have purchased.

Meanwhile, retail associates also can glean this information to help provide better service. Or, they may know that you’d rather not be approached.

Not a loyal customer yet? Mobile can help here, too, by encouraging new customers to download the store’s app and inventivize registration by offering an exclusive discount, e.g. 25 percent off the first purchase.

Note that this scenario depends on more than just technology. It also requires a customer’s consent. Once that consent has been given, it holds the potential to reorient the marketing relationship from focusing on the less efficient top end of the funnel, e.g. awareness and consideration, to the profits that await at the bottom, e.g. purchase and recommendation.

Brick and mortar retailers offer lots of advantages over e-tailers. They enable you to handle the product. You can take delivery right away. With the injection of existing technology, it can reward loyal customers with thoughtful value while enticing new customers to enjoy a more personal, customized experience.