The Boston Red Sox: A Game Changer?
“We recognize if we don’t connect with the next generation of fans, we are dead” – Sam Kennedy, Red Sox Chief Operating Officer
For over a century, baseball has been one of America’s favorite pass-times. Major League Baseball (MLB) saw record revenues of approximately $9B last year. Team’s valuations are at an all-time high and most have shown double-digit growth for many years. With nearly $400M in annual revenue and a valuation of over $2B, the Boston Red Sox sit towards the top of this money-producing industry.
BUT, the game hasn’t changed much, the customer experience at the ballpark has remained flat, and younger generations are losing interest.
Red Sox leadership has recognized that in order to drive sustainable growth they must connect with the next generation of fans in ways they most desire. Engaging the next generation will likely require a different experience and a unprecedented level of integration into the fans’ lives. As a result, the Red Sox have made investments in digital innovations that allow them to connect with fans more effectively. Most notable, last year the team unveiled a mobile application that syncs with users while they are at the ballpark. Fans can order food and memorabilia to their seats, watch instant replays from camera angles not shown on TV, and can even use an interactive stadium map to find the nearest restroom or food stand.
The technology not only provides benefit to the fans, but also allows the Red Sox to capture more value from its customers. The team can currently leverage this technology to provide seat upgrades if the stadium is not filled to capacity, provide food and memorabilia coupons, and send ticket offers to fans that have not been to a game in a while.
As the Red Sox improve this technology there will be an even greater opportunity to both provide and capture value. Imagine a scenario where fans can see, in real-time, which food vendor has the shortest wait time. The fan misses less of the game, crowds are more evenly distributed across vendors, and the team can sell more food to more people, faster. Using data collected from repeat users the Red Sox could also leverage this technology to send recommendations based on previous purchasing behavior and/or track each individual fan’s preferences, favorite players, etc. The opportunities are endless.
Baseball will always be baseball, but the experience will undoubtedly improve. The Red Sox – and Major League Baseball more broadly – must continue to transform how they interact with fans. By using digital innovations like the ones mentioned above, the Red Sox can better connect (literally and figuratively) with its customers.
There are still many more opportunities for the Red Sox to leverage technology in order to improve customer experience, but I believe they are heading the right direction and I am excited to see how this landscape evolves in the future.
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Great post. Do you know what’s the change in revenue from food & beverages (F&B)and memorabilia ever since the Red Sox started using this technology?
I went to a game a few weeks ago but unfortunately have not seen any advertisement about the existens of this app so it seems like its hard for them to get a lot of traction. Additionally, they were still using a lot of runners who sold F&B manually. So maybe this idea doesn’t really work.
Thanks! I don’t know those specific statistics, but I completely agree that these technologies are only as good as the impact they have. If there is low awareness (and therefore low usage), their ability to provide and capture value will be limited.
Very interesting. I’d never thought about the value an app could provide inside the stadium. The seat upgrades idea seems like a huge opportunity!
What do you think happens when virtual reality really takes off? Do you think the Sox and others will still be able to convince people to pay, travel to a place, sit there for three hours next to strangers, and pay high prices for concessions? Is there something timelines about that experience or will a digital solution just turn out to be far superior to an century-old way of entertaining ourselves?
Jon – great questions! Only time will tell how virtual reality will impact the sports industry more broadly, but I think executives within sports organizations need to be thinking about this. With the improvements in HD TV and potential entrants of virtual reality and other entrants, teams will need to cater towards the experience customers WANT to have, and not just the traditional model that has worked in the past.
The NFL has made a lot of advancement with the in-stadium digital experience for fans. Driven more by necessity since many football fans find watching the game on television (vs in the stadium) a better experience, and the exploding interest in fantasy football, NFL stadiums contain WiFi and many interactive fan experiences. I wonder if MLB can learn from the NFL (and other major sports leagues) to better marry technology with America’s past time.
Absolutely! I recently read an article that suggested the MLB is “playing catch up” to the NFL in this regard. I think we will see more and more baseball stadiums with wifi and other “experience enhancing” innovations. I personally like being disconnected from everything when at a sporting event, but I am guessing I am in the minority.
It seems like interventions like these are necessary in preserving the vitality of live sports going forwards. I think that these will be critical in getting fans to games across all sports, especially given that the watching experience is objectively far superior from the comforts of home. It will be interesting to see how organizations try to enhance the in-person experience to bring it up to par with “the old days”. Very exciting!
You raise a great point. I wonder how executives balance keeping the roots of what a “traditional ballpark” experience is with providing fans a “new & improved” experience. Some teams are more hesitant than others to change (e.g., the Cubs used to have a more stringent rules on where advertisements were placed throughout the ballpark, but have recently loosened those restrictions). Given how much money is at stake, I am sure there are a lot of executives thinking about this today…and I’m guessing most teams will make every effort to capture more and more value from its fans.