Running head: THE MAGIC KEY TO THE KINGDOM 1 The Magic Key to The Kingdom: A Market Analysis of the MagicBand Communication Technology at Disney Michelle Senter University of Central Florida THE MAGIC KEY TO THE KINGDOM 2 Introduction In the increasingly digitalized world we now live in, smart technologies and devices are all around us. To keep up with new generation consumer trends, such smart technologies have even made their way into the theme park market industry such as the introduction of Disney’s wearable innovation called the MagicBand. In order to examine the factors affecting whether or not consumers are actually using or adopting such smart technologies such as these wearables as well as if they are facilitating any social interactions for consumers, I will apply the theoretical perspective of the Technology Acceptance Model (TAM). I plan on investigating how smart tourism technologies, which create smart destinations, are changing and affecting the experience of tourists along with the impacts of the social connectivity aspects of the IoT technologies by completing a market analysis on Disney’s MagicBand technology. I will be analyzing whether or not certain aspects of smart technologies—such as the personalization attributes—are more important to tourists or more influential than others in adopting the devices, the development of new media for users to consume by these devices, and what kinds of inter-connections these devices are influencing amongst adopters. By examining consumer attitudes towards these features of smart technologies in smart destinations as well as conceptualizing what key attributes impact their experience and acceptance behaviors, I will be able to analyze the effectiveness of the introduction of the MagicBand by Disney into their Orlando theme parks. The tourism market currently has a unique opportunity to co-create experiences with their visitors through targeted and strategic use of IoT technologies which could potentially lead to a plethora of benefits to multiple stakeholders—such as enhanced image of the tourism destination or increased revisit intentions—ultimately leading to a competitive edge in the theme park market industry. THE MAGIC KEY TO THE KINGDOM 3 This market analysis will first look at the emergence of connected consumers and the Internet of Things (IoT), how to apply the TAM theoretical lens to wearable devices and smart technologies, the effects of personalized communication and advertising when it comes to smart technologies, and the effects these smart tourism technologies have on tourists’ overall experiences. Throughout the paper, I analyze other companies in the smart tourism technology market while also identifying existing and obsolete technologies in the market. Last, I provide details on the implications for the future of smart technologies, specifically in the tourism and smart destination market. Connected Consumers & The Internet of Things (IoT) According to the World Tourism Organization (UNWTO) (2018), tourism is the world’s third largest export category. Considering the immense global economic impacts of tourism, it is important for tourism leaders like The Walt Disney Company to increase their market share and competitiveness by adapting to the digitalized and interactive world of the 21st century, like with the implementation of their wearable innovation called the MagicBand (Figure 1). With the recent explosion of IoT technologies, we have seen a rise in individuals’ desire to be a “connected consumer”. Consumers now want a multilevel and multidimensional connectivity experience that allows them to interactive with their products and objects like never before (Verhoef, Stephen, Kannan, Luo, Abhishek, Andrews, Bart, Datta, Fong, Hoffman, Hu, Novak, Rand, & Zhang, 2017). This has led to the development of smart devices such as smart phones, smart TVs, smart watches or wearables, and more that allow for a new wave of consumer connectivity where smart objects not only connect to consumers but connect to other smart objects as well (Verhoef et al., 2017). In fact, installed IoT devices are expected to rise from just over 26 billion in 2019 to over 30 billion in 2020 alone (Statista Research Department, 2016) (Figure 2). With the rise of THE MAGIC KEY TO THE KINGDOM 4 installed IoT devices also comes more research on how we communicate with these devices and interact with them overall. We have seen a large shift in the market towards more personalized and optimized experiences for consumers and these IoT technologies are making that possible through connected smart objects like wearables. Researchers have now begun examining the effects of smart devices’ interaction styles on consumers’ brand perceptions (Wu, Chen, & Dou, 2017). In one such study, researchers explored whether or not consumers’ perception of the brand that developed an IoT will differ if the style of interaction between a smart object and a consumer is comprised of more friend-like communication vs engineer-like communication (Wu et al., 2017). Findings suggest that adopting a friend-like interaction style over an engineering- like interaction style can in fact enhance brand warmth, brand competence, and brand attachment (Wu et al., 2017). With the widening of the smart device market—specifically when it comes to the tourism industry and smart tourism technologies—consumer preferences on how the device communicates with them are critical to remember for developers in the market like Disney. Understanding the importance of IoT technologies and their inter-connections with consumers as well as other objects appeared to be at the very forefront of Disney CEO Robert Iger’s plan to implement the MyMagic+ technology and MagicBand. According to Fast Company, the MyMagic+ implementation was considered “a sweeping plan to overhaul the digital infrastructure of Disney’s theme parks, which would upend how they operated and connected with consumers” (Carr, 2015). Ultimately, it is clear consumer expectations for smart technologies have risen and consumers now not only expect an organization’s devices to communicate and connect with them, but to do so in a friendly and personalized manner. Technology Acceptance Model (TAM) & Wearable Devices THE MAGIC KEY TO THE KINGDOM 5 With the recent surge in creation of IoT technologies, it is also important to understand factors that affect acceptance and usage of these devices in order to analyze how to successfully implement them into a tourism destination, effectively turning it into a smart destination (Femenia-Serra, Perles-Ribes, & Ivars-Baidal, 2019). By using TAM as a lens, researchers have begun to analyze psychological factors and inhibitors of consumer acceptance behaviors, specifically when it comes to wearable technologies (Adapa, Nah, Hall, Siau, & Smith, 2018; Chang, Lee, & Ji, 2016; Kim & Shin, 2015) (Figure 3). Some contributing factors found to be considerably important in consumers’ adoption behaviors of wearable technologies are image, personal value, anticipated usefulness and form (Adapa et al., 2018), while factors like perceived usefulness, perceived ease of the technology’s use, subcultural appeal, and cost of smart watches were important predictors of user attitude and intention to use the technology (Kim & Shin, 2015). Research has also been conducted on adoption of other wearable smart technology devices in smart tourism destinations such as museums and art galleries (Leue, Jung, & tom Dieck 2015; tom Dieck, Jung, & Han, 2016). In a 2016 study on the implementation of wearable smart glasses in the Manchester Art Gallery, findings suggest that content requirement, functional requirement, comfort, experience and resistance are all important areas of influence when it came to adoption of the wearable smart glasses (tom Dieck et al., 2016). In the content requirement, personalization was highlighted as an important factor in the choice to adopt the wearable smart glasses and when it came to function requirements, social functions were considered important components for adoption as well as ease of use (tom Dieck et al., 2016). When analyzing factors that affect acceptance and usage of these devices in the tourism market, it is important to include not only social function capabilities of the smart technology, but social influence surrounding the use of the technology. THE MAGIC KEY TO THE KINGDOM 6 In a 2016 study on factors influencing Chinese tourists’ intentions to use the Taiwan Medical Travel App (TMT), researchers found, “social influence significantly affects the intention to use the TMT App,” (Compeau & Higgins, 1995; Taylor & Todd, 1995; Venkatesh, Morris, Davis, & Davis, 2003, as cited in Chang, Lee, & Ji, 2016, p. 407). Hence, when organizations are trying to introduce a smart technology into their tourism destination, it is vital for them to consider the TAM approach, which argues that social influence will impact behavioral intention and ultimately use behavior of the product (Venkatesh et al., 2003). A particular emerging marketing technique that has the potential to influence consumers adoption of smart technologies in the tourism market is electronic word-of-mouth (eWOM). While traditional word-of-mouth (WOM) can be defined as “an informal communication process that allowed consumers to share information regarding products and services,” (Hawkins, Mothersbaugh, & Amit, 2010, as cited in Yang, 2017, p. 96) the Internet revolutionized this communication process by extending its reach immensely. With the advent of eWOM, consumers