With the significant investment that comes with developing and running a stadium, it needs to be more than a destination for sports fans. When your team has a challenging run, the additional revenues from diversification and improved fan experience will help to reduce the impact of sporting performance on the bottom line.
Challenging times, but huge potential
This need for diversification has been particularly highlighted in the current pandemic. With uncertainty around re-opening, capacity and fan confidence, it is even more vital for teams and venue owners to offer more choice to potential customers by increasing the venue’s potential by attracting supplementary and ancillary events. Adopting this strategy will increase customer spend which ultimately improves the operating profit of the stadium.
Size is not that important
Back in 2016, The Staples Center was recognised as the world’s most profitable sports stadium. Interestingly, it had only 19,067 seats – a quarter of the capacity of Manchester United’s Old Trafford and just under a third that of Arsenal’s Emirates Stadium. But the Staples Center is home to four teams: the Lakers, Clippers, Sparks and the Kings, which ensured 140 match days annually, not including play-offs as well as attracting high profile, must-see concerts across the year.
It comes as no surprise that this 365 ‘always on’ model has gathered pace around the world. From providing parking, market stalls and general community value or through concerts, other sporting events, conferences and hotels – ensuring venues attract as many people, as frequently as possible is central to venue business models.
New location trends
Today a new dominant model is emerging. Geographically, new venues are moving back to the city, anchoring larger mixed-use real estate developments and creating ‘arena districts’ that reshape commercial activity in the neighbourhood. Meanwhile, fans are playing an increasingly important role in shaping and directing the experience—interacting with teams and players in new ways on the field, in the concourses, and outside the stadium.
In parallel to these stadia trends, the exponential technology advances and the shift to mobile and cloud computing have fundamentally reshaped commerce. Today’s smartphone owner carries a device with processing power that would have required a computer the size of a stadium fifty years ago.
These trends are increasingly converging. Deloitte identified that the sports venue industry is moving towards a new model in which the stadium is both a technological and commercial platform. This change turns the traditional way of thinking about the event experience on its head. The price of beer, seats and corporate hospitality are not the only ways of driving revenue. Teams need to engage their fans and event-goers to encourage them to shape their own experience. Understanding fans’, their behaviours and their needs helps venues offer the best experience – ensuring fan loyalty, continued engagement and spend.
Data unlocks huge opportunities
Whilst a varied and continual flow of events, fans and consumers through venues supports the bottom line, it becomes increasingly challenging to understand every audience, their preferences and behaviours. This is where the power of understanding your fan gives venues a huge advantage (and creates an even greater risk if this isn’t captured).
Whilst email sign ups and ticket purchase details provide some insight, what venue owners don’t actually still know is who is actually attending the venue. Ticket purchases may be made by a parent or given as gifts and typically fans buy at least two tickets for an event. What becomes really clear is that there is a real gap in understanding who is entering the venue, who is making purchases and what they are actually buying.
This is where the benefits of closed loop cashless systems come into play. Using a closed loop solution – eg RFID wristbands or a white label digital wallet, the venues themselves can understand who visited their venue, when and what they purchased – helping improve fan experience and drive revenues from operational efficiencies, ease of transactions, reducing queues, tailored partnerships and targeted marketing.
Credit cards, bank cards and third party mobile pay solutions don’t share this data. This means that venues stay in the dark about their audiences, limiting their ability to cross sell and improve the fan experience.
The power of data
Closed loop data, if it is properly captured, stored and analysed, gives venues incredible insight into fans’ behaviours and preferences. This data not only provides huge value to teams, but to partners and sponsors as well. However, to properly reap the rewards from the data – it is important to translate the information into actionable insights and to pursue highest-opportunity applications of this data in a strategic fashion.
Without this data, there is a huge risk to your plans. If the only information you are tracking is that of your season ticket holders, you may miss the opportunity to sell last -minute tickets to a game to someone who came to the venue three times for a summer concert series. You may miss the opportunity to convert casual visitors into lifelong fans.
Using the data enables venues to reward loyalty and encourage visitors from one type of event to try new experiences. Maybe there is a way to ensure that a concert sponsored by Budweiser can give away free tickets to the regular Bud drinkers across your team’s season? Whatever challenge your venue faces in ensuring a vibrant community and a healthy bottom line – you can be assured that the data and insights generated by a closed loop solution can support them.
In fact, the benefits of harnessing the data and insights gained by using a closed loop system are so significant – we’ve written a blog about it here.
Choose the right solution
This is where choosing your closed loop system is very important. A white label mobile wallet may provide a seamless in app experience for your season ticket holders – but it doesn’t cater for your summer concert visitors, nor your casual consumers who visit for a coffee or want to park their car in your venue. How is it possible to track every potential consumer who may visit your venue? The answer is to choose a hybrid closed loop system.
At Tappit, we know that one type of cashless solution does not fit all. Unlike others in the market, we’re proud to offer a selection of cashless solutions – white label mobile pay solutions, cashless RFID options as well as the insights and data platform that aggregates all this data in one place. By choosing a hybrid solution, you can choose the right cashless option for each different event. This enables venues to understand all their visitors, their behaviours and incentivise them to become even more engaged with the brand and ultimately help stadia to become even more profitable – in the most challenging of times.