During last November’s IAAPA Attractions Expo in Las Vegas, I enjoyed several interesting conversations with large park operators on the topic of discretionary spending at amusement facilities. The gist of those conversations was simple and straightforward: in tough economic times like these, how do you convince guests to spend more money once they’ve entered your park?
This is a key question because, according to these industry vets, a good deal of an amusement facilities’ revenue is often generated after a guest goes through the turnstile. Much of this revenue comes from merchandise purchases during the guest’s visit. Unfortunately, as the economy continues to lag, more and more guests are showing up at theme parks with less money to spend once inside the turnstiles.
Rather than concede this potential lost revenue, though, at least one large park chain is implementing a strategy whose end result will hopefully induce guests to bring more discretionary income to their parks to purchase souvenirs and the like.
This issue, the Large Park Report examines how Six Flags and their creative e-commerce efforts are working to generate new revenue streams in areas like merchandising despite the economic slowdown.
Six Flags Refuses to Wave the White Flag on In-Park Spending
Like most amusement operators these days, Six Flags is facing reduced guest revenue during the current downturn. This reality, along with the large amount of debt incurred by the previous owner, forced Six Flags into bankruptcy last year.
Fortunately for the company, the bankruptcy filing did not mean major cuts in innovation. Indeed, under the leadership of top exec Mark Shapiro and his management team, Six Flags has continued to lead the industry in online innovation. One lead strategy for this effort has been to use the Six Flags website to cleverly generate more guest spending in advance of their visit.
The idea goes like this.
As the new millennium got started, Six Flags operated a fairly conventional website that focused on providing visitors with information but offered these potential guests very little, if any, opportunity to make purchases. This meant that guests could get park hours, directions, and details about rides and shows from the internet but had to wait until they actually reached the park before buying most tickets and other items.
As a result, guests would reach their Six Flags park but, before entering the gates, they had to open their wallets and spend their money on admission and parking. For guests who had set a specific budget for their trip, this meant that a large chunk of that budget was gone before spending a dime on in-park merchandise and souvenirs.
This presented an even greater dilemma as the two recessions that bookended this past decade forced guests into a lower spending mode—a situation that led to even less souvenir dollars to spend once they entered the park.
To counter this situation, Six Flags made a very purposeful move toward developing an e-commerce solution whereby guests could purchase more basic park requirements (like tickets and parking) in advance—sometimes months before their actual trip. This provided the park chain with a psychological edge of sorts when it came to guest spending.
Think of it this way: In April, Guest Joe and his family decide to visit their favorite Six Flags park later that summer. Once they’ve made that decision, the key is to get them to spend as much money as early as possible. Doing so will result in two benefits. First, it locks them into the visit. Second, the more money they spend early on and up front, the more likely they are to have saved additional money between the decision to go to Six Flags and their actual visit.
If Guest Joe and his family arrive at the park and have to spend money on tickets and parking at the time of their actual visit (rather than at the time of their decision to visit), then they’ll likely have less money to buy high margin merchandise items once inside the park.
This is important because, unlike parking and ticketing, merchandise is one area that is not well-suited for out of park purchases (though, Disney World continues to challenge this conventional wisdom by increasing their park-centric merchandise available for purchase online). One main reason is that, with souvenirs, guests like to touch and feel the merchandise before purchasing it—something that cannot be done in advance over the internet.
Ultimately, the key to the strategy is that, if you can get guests to purchase admission and parking in advance, you open up more money for purchasing merchandise once in the park.
Increasing Unrealized Revenue in Tough Economic Times
When money is tight, tapping into previously unrealized revenue streams is one of the most efficient ways to generate new income. The Six Flags approach to its website as a revenue generator marks a great example of this strategy at work.
Today, you can visit www.SixFlags.com and purchase both season passes and individual tickets—oftentimes as discounted prices that also allow you to print the ticket vouchers at home similar to printing airline boarding passes from your computer prior to arriving at the airport.
In addition to the tickets, guests can also purchase other essentials like parking and food vouchers from the website. They even purchase special add-ons like park tours and “Flash Passes”—tickets that reduce wait times while in the park. All of this allows the guest to both save time (by not having to wait in line once at the park to purchase these things) and sometimes save money through online advance purchase specials. Best of all, for Six Flags, the more that they can get the guest to buy in advance, the more likely that the guest will not change their mind about visiting the park. Instead, the guest will not only show up but will also likely have more discretionary money available when they do.
The ultimate result for Six Flags and its innovative e-commerce strategy is an online experience that allows guests to make a wide variety of advance purchases with very few website barriers.
Mike Antinoro, Six Flags’ EVP for Marketing and Entertainment, commenting on their e-commerce solution from accesso, explained that it “has played a significant part in moving online ticketing to the forefront of the Six Flags marketing strategy.” Indeed, after implementing the strategy, Six Flags would ultimately realize an over 60 percent increase in e-commerce related revenue—a nice new cache of previously unrealized income.
While Six Flags might represent one of the industry’s largest park operators, this same strategy can be utilized by facilities of all sizes that operate a website. The key is to invest in an attractive website, make your potential guests aware of the website, and then—once they arrive at your site—make the process of purchasing park tickets and other items conducive to advance purchases as easy as possible.
Fortunately for the industry, even amusement facilities without much technical expertise can benefit from several vendors who offer amusement facility-focused e-commerce services for facilities of all sizes. In tough economic times like these, this might be one of your park’s best investments to secure increased revenue from guests who already have a great deal of competition for their hard-earned dollars.
(Reach contributor Chad Emerson at firstname.lastname@example.org.)