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InformationWeek 500: Innovation Spurs Business Growth

Royal Caribbean Cruises, The Wet Seal teenage clothing chain and United Stationers demonstrated how innovation in the use of data analysis, digital services and social networking can drive growth, even in a recession. All three presented before 350 attendees at the opening session of the InformationWeek 500 Conference, which got underway Monday at the St. Regis Hotel at Monarch Beach in Dana Point, Calif.

Bill Martin, CIO of Royal Caribbean, said his firm has designed two cruise ships on an unprecedented scale with a heavy investment in embedded digital services to enhance the customer experience. The Oasis of the Seas is a 223,000-ton ship capable of carrying about 6,000 passengers in 2,700 rooms. The firm's previous largest ship was 140,000 tons. In a slide showing relative sizes, the Oasis of the Sea, or its soon to be delivered sister ship, Lure of the Seas, appear twice as big as competitor's new vessels.

The construction of the ships drove Royal Caribbean's earnings down to $.75 per share in 2009, but as the investment nears completion, earnings will be restored to the $1.89 level, Martin said. A key to their prospective profitability is the amount of digital customer services built into the vessels. Passengers, as they board the ship, will obtain a unique room key identification card backed by a high-resolution image of themselves that will admit them to activities and result in charges to their account. Boarding the ship is a 15-minute experience, accomplished by customers using one of 90 check-in stations, to allow customers to start enjoying their cruises sooner, said Martin.

The ship is designed as two tiers of cabins rising on each side of the ship, with an open, central area down the middle. It includes a basketball court, rock climbing, downhill snow slope, ice skating rink, swimming pools and water sports, a solarium and a Central Park board walk complete with trees and other greenery and adjoining restaurants in the center of the ship.

On such a large vessel, it would be easy for parents to lose track of their children, so a Wi-Fi network was included to power a bracelet worn by the children moving about the ship on their own. When the parent wants to know where a child is, a query is sent via iPhone and a transponder on the bracelet responds. The response is picked up by a nearby locator station and that location is broadcast back to the parent's iPhone, showing up on its screen, Martin said. Likewise, members of groups can stay in touch with each other via the iPhone location system. "The iPhone application was one of the easier things to deploy," noted Martin. Rent for two iPhones over a week's cruise at $35.

Passengers are also assisted by 300 digital signs scattered around the ship that tell people attendance levels at various activities and restaurants. By consulting the signs, passengers self-regulate their use of facilities. They rarely walk across the ship to attend a restaurant that is already full. "A subtle result is that there are no waiting lines," said Martin. The signs also help passengers find facilities they want by producing a map from where they've made their inquiry to the sought after destination. They can also get a map on how to get back to their cabins.

Customer activity data is collected by the ships point-of-sale systems, and uploaded for analysis to shore-based data warehouse systems. By the next day, the shore systems have come up with recommendations on how to market to various individuals and groups onboard and coupons or special offers are made in" one-to-one marketing in their cabins."

Photos are taken of individuals as they engage in activities and composed into a book, as opposed to a photo wall with thousands of individual photos, as was used previously on the Royal Caribbean line. Passengers, who used to have to hunt for photos of themselves on the wall, now go to a library of books to select the one that has photos of themselves, built through an image recognition system that matched the photos taken to the customer identification photo already stored. The new format "drives revenue for us. They're much more likely to buy. People don't want to throw away pictures of themselves that they can hold in their hands."

Customers also sign digital liability waivers for activities they are about to engage in versus the paper waivers that used to be collected and stored for legal purposes, resulting in 4-5 boxes of paper from each cruise. "They're all gone away now," said Martin.

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