The San Francisco Giants: High-Tech Ticketing The Seattle Mariners: Countering eBay The San Diego Padres: Catering to "Frequent...

With some of its players now pulling in salaries of $15 million per season, Major League Baseball has clearly defined itself as a big business—and a high-risk one, at that—as well as the National Pastime. What's not as obvious is that the business of baseball, based as it is on fan support, is increasingly a retail business, whose product is not only the game on the field but the merchandise sold at the ballpark and at stores away from the ballpark.

As the retail side of professional baseball has grown, so has the need for technology to support that activity. In response, many teams are embracing technologies more reminiscent of malls and specialty shops than green grass and double plays. This is most apparent in the new ballparks that have opened up around the country since 1992, including the Baltimore Orioles' Camden Yards, Colorado Rockies' Coors Field (in Denver), Cleveland Indians' Jacobs Field and Seattle Mariners' Safeco Field.

This year, three new high-tech facilities humming with technology have debuted: the San Francisco Giants' Pacific Bell Park, Houston Astros' Enron Field and Detroit Tigers' Comerica Park. The Pittsburgh Pirates and Milwaukee Brewers expect to open multimillion-dollar venues next year, while other teams like the Cincinnati Reds and San Diego Padres are planning new ballfields. Ironically, the new ballparks themselves are designed to be old-style, retro facilities with a smaller, more intimate ambience than the massive structures they replaced.

But the technology used by these teams and others is anything but old-fashioned. Indeed, it is often the equal of the most cutting-edge retail chain. It includes sophisticated POS systems that transfer data in real time via Web-based networks; databases from which all manner of sales analysis can be generated; turnstiles that read bar-coded tickets and can be programmed to reject lost or stolen tickets; Web-selling techniques that enable fans to bid for tickets and even resell them; and loyalty programs tied to kiosks that offer video messages from players.

Each team puts its own spin on technology; here's what four of them did.



The Cleveland Indians:

A Baseball Renaissance

The team that has perhaps made the greatest mark as a retailer—and as a user of retail technology—is the Cleveland Indians. The Indians are in some ways an unlikely success story given their history of lackluster teams—they last won the World Series in 1948. Those teams played in a cavernous, 74,000-seat ballpark near Lake Erie for years maligned as "the mistake by the lake." However, in the 1990s "The Tribe" enjoyed a veritable baseball renaissance engineered by two brothers who purchased the team for $40 million in the mid-1980s—commercial developers Richard and David Jacobs. The brothers, interestingly, were successful owners of retail malls. (The Jacobs family sold the team this year to lawyer Larry Dolan for $320 million.)

The Jacobs' strategy was two-fold. On the baseball side, it was to develop top-flight players from the farm system and sign them to long-term contracts; that strategy produced such stars as Manny Ramirez, Jim Thome and Kenny Lofton, and playoff appearances from 1995 through 1999. (As for 2000, at press time the team was in the thick of the American League Wild Card race.) On the business side, the centerpiece was the opening in 1994 of Jacobs Field ("The Jake"), a $169 million, fan-friendly ballpark (partly financed by the city and county government) that has set a record for consecutive sellouts by a major league team: more than 450 since June of 1995, and counting.

Simultaneous with the team's success on the field and in the stands—and certainly no coincidence—was the development of a profitable, $20 million retail business selling team merchandise; the retail operation has served to both reinforce the team's brand and help support its baseball operation (which, unlike many professional sports franchises, operates in the black).

Beginning with a single concession stand in the old ballpark, the club now runs 20 stands at Jacobs Field; nine "Team Shop" specialty stores in the Cleveland area (including one at the ballpark); and one store at the team's spring training facility in Winter Haven, Fla. In addition to souvenirs and baseballs, the outlets sell mostly baseball caps and apparel emblazoned with the team's inimitable (and sometimes controversial) logo, the smiling face of Chief Wahoo. The team also sells products through a 100-page catalog and a Web site (www.clevelandindians.com), which together account for 10% of sales. (The team does not run its food concession stands, which are operated by a third party.)

Like any retailer, the team buys its merchandise from vendors licensed to sell apparel with Major League logos (though it gets preferential pricing and exclusive designs, and has input in standard designs).

It's no exaggeration to say that the stores, stands, catalog and Web site constitute a legitimate specialty retail operation, which happens to be run by a parent company with its own special culture, history and mystique that both transcends and drives the retail business. And about half of the retail sales are generated in a facility open just 81 days per year, but with 43,000 potential customers each day who usually remain on the premises for several hours.

In support of its retail operations, the Indians have made two major software investments: the first, in 1997, was in merchandise and warehouse management systems from Irvine, Calif.-based SVI Retail (formerly Island Pacific); the second, at the beginning of this year, was in NT-based POS and database management systems from Applied Digital Solutions (formerly STR), located in Cleveland. The Applied Digital systems are linked to the SVI Retail systems, and they have all made the Indians "so much more efficient than we ever were before," says Jayne Churchmack, the team's senior director of merchandising and licensing, who was a buyer for May Department Stores before joining the Indians in 1989.

The Applied Digital applications include TradeWind, a Windows-based POS and back-office system; TradeCenter, a data store for sales data; and TradeRoute, which handles the transfer of data from stores to a 200 gigabyte (GB), four-processor Dell PC running SQL server at headquarters. The team spent $250,000 on the overall implementation, and expects a payback in two years.

In addition, this year the club built a virtual private network (VPN), which was originally designed to facilitate communications for its far-flung baseball scouts, and was extended to connect its Team Shops with headquarters at the ballpark. The VPN, which works with TradeRoute to enable the real-time transfer of data, puts the Indians at the technological forefront of specialty retailing, executives at Applied Digital say. The team also has a Novell NT-based local area network (LAN) that links the 20 stadium concession stands to headquarters.

The VPN, which operates through the public Internet, is based on a $25,000 Cisco PIX firewall that provides security via a tunneled, encrypted "pipe" extending through the network. DSL lines and Cisco routers link the stores to the network, eliminating dial-up telecom costs. The VPN will eventually be used to support video conferencing between team headquarters and the outside stores, says Dave Powell, the director of the team's 11-person IS department, who spent 10 years with British Petroleum before coming to the Indians in 1995.

Overall, the technology enables the Indians to "manage the fan experience," says Churchmack. "So if down the road the team doesn't perform as well as it has, people will still come to the ballpark because it's entertaining, safe and friendly." Adds Powell, "The systems enable us to focus on retailing, not paperwork. We're working to build a long-term bond with our fans,"

At the ballpark, where speed is of the essence, the real-time data transfer offers numerous benefits, including faster checkout and instant inventory look-ups. For example, during a rain delay at a game, executives can get paged as often as they like about the supply of rain ponchos; knowing which stands are short, they can quickly reallocate ponchos from better-stocked stands. Everyone is informed about the transfers, as is the inventory system. Personnel can also be moved to busier locations. "The system enables us to maximize our opportunities," Churchmack says. "We can do a great business in a weather situation." Even during normal times, it's a plus to see inventory levels in real time, observes Powell.

The SVI and Applied Digital applications satisfy Churchmack's appetite for sales analysis reports. For example, SVI generates audit reports based on the previous night's ballpark sales; Applied Digital's reports can show sales associate productivity in units per transaction and average sale, or track down a credit card receipt in the event of a disputed transaction.

Powell says the retail systems help the standalone stores in the same way that they assist the ballpark stands—for example, showing how a store is doing compared to other outlets. In addition, stores are going to be given the ability to do special orders of merchandise that is out of stock at one location but available elsewhere in the chain. In general, the real-time connectivity makes the outside stores feel linked "emotionally, as well as technologically" with the excitement generated at the ballpark, says Churchmack.

Powell points out that the next release of the ADS POS application will include signature capture. "The large retailers have had that for years, but now it's being made affordable and easy for specialty retailers like us," he says. Indeed, he says, the technology as a whole "allows us to be a small retailer and yet act like a big retailer," which has helped to attract and keep employees with retail experience.

Other high-tech bells and whistles at Jacobs Field include a new circular high-resolution LED screen next to the scoreboard that displays player's faces, the team logo and ads; and turnstiles that read bar-coded admission tickets and can be programmed to reject lost or stolen tickets. This month, the Indians will begin testing the tickets as $20 "gift cards" that will both admit fans to the park and allow them to pay for merchandise inside.



The San Francisco Giants:



Pacific Bell Park, which just opened this year, has been a huge hit with San Francisco Giants fans—nearly every game for the 2000 season has been sold out. A large percentage of the seats are occupied by season ticket holders, many of whom purchased "charter seats" before the park was even built.

The scarcity of available tickets has spawned a thriving black market, and both scalpers and auction sites like eBay have offered up thousands of the desired ducats, often at huge mark-ups. Although the Giants acknowledge that it's impossible to curtail illegal ticket sales entirely, the team now has several safeguards in place to help foil scalpers and counterfeiters alike.

Like Cleveland Indians' tickets, each Giants ticket is marked with a bar code, which is scanned by an electronic reader—provided by the Giants' ticketing partner, Tick-ets.com—upon presentation at the park's turnstiles.

And like Indians' fans, Giants season-ticket holders, or fans who purchase individual seats by credit card, are afforded additional protection against ticket loss or theft. When these fans report their tickets lost or stolen, the bar codes are immediately invalidated by a computer system wired to the turnstile readers, making them unusable for admission to the ballpark. Replacement tickets may then be issued at a cost of $10 per ticket, though the fee is waived for stolen tickets if a police report is submitted. The presence of this new system, says Giants CIO Bill Schlough, means fans buying resale tickets from a third party are taking a huge risk that those tickets are worthless.

"The beauty of the turnstile system is that it's really undermined both scalpers and eBay," Schlough says. "You can buy tickets from them, but you can't trust that they're legitimate."

The turnstile system also sends customer information to a central computer, giving the team attendance and traffic data, which can be used to redeploy stadium workers.

In June, the Giants began offering a season-ticket resale service on the team's Web site (www.sfgiants.com), called "Double Play." Fans who cannot attend games for which they hold tickets may give them back to the Giants to resell, at a price set by the original ticket holder. Ten percent of the selling price goes to the Giants and the remainder to the initial ticketholder. This, says Schlough, helps the team gain more control over the resale process, and decreases the chance of fans buying bogus resold tickets from an outside source.

Other than nabbing one of the 500 pavilion seats sold on game day, the only other way for Giants fans to now gain admission to Pac Bell is by purchasing one of the few single seats still available. Fans can buy these tickets via Tickets.com, picking them up at the stadium's will-call window. Or they can purchase them through special Bank of America "Ticket Teller" machines, found both inside and outside the ballpark, that access ticket inventory in real time. Tickets.com helped design the machines (which are also standard ATMs), in conjunction with data management company VAST. "No other team that we know of is doing something like this today," Schlough says. "It's a lot shorter than standing in line at the will-call out front. It's lightning-quick, it's five times as fast as an ATM—you just stick in your credit card and out it comes." The system, he says, is similar to those used in movie theatres and train stations, but sells assigned seats rather than general admission tickets.

As is the case for conventional retailers, the biggest challenge for the Giants in getting everything running smoothly at Pac Bell, says Schlough, has been integrating all the individual pieces from different vendors—and all the vendors' sub-contractors as well. "Everything that's here, we don't do on our own—we work with a bunch of different vendors. We use Tickets.com and Panasonic for a lot of the video. We used Pandesic [now defunct; see story, page 37], which did a lot of the work to develop the Double Play ticket window system, and that helps us with tracking all the information about our fans. Trying to get all these people to talk to each other, and getting these systems to integrate with each other and work together—that was definitely the biggest challenge. We're always grappling with that, making sure they have the right incentives to get things done, because they all have their own agendas as well."

Prior to the ballpark's official opening on April 11, the Giants did extensive testing on the turnstile system. "Your dates can't slip," Schlough says. "People have tickets, and they were going to be coming through here on April 11, no matter what happened. In a lot of other industries, you can push back dates, but we really deal with fixed dates all the time. We tested the turnstiles last year at Candlestick [3Com Park at Candlestick Point, the Giants' former home], and all through spring training this year we tested them."

No matter how contentious rivalries between ballclubs can be on the field, behind the scenes Schlough and his fellow baseball CIOs stay in constant touch with one another to discuss what works and what doesn't. And sometimes the high-tech can be overkill for fans. When the Giants were putting their infrastructure together for Pac Bell, the team mulled over the possibility of installing "smart seats" at the ballpark.

The Tampa Bay Devil Rays employ such a system at Tropicana Field, which features LCD screens at premium seats that show team promotions and enable fans to see replays, call up player stats and purchase merchandise and tickets. But Schlough says his counterpart at the division-rival Padres warned him against deploying smart seats, citing "nightmarish" equipment problems that cropped up when it was tried in San Diego.

"It's pretty compelling from the team's perspective, because you can use them to up-sell. But maintaining those things is a nightmare. They're going to break down, because they're out there with the fans spilling their drinks on them, kids pounding on them and so forth. San Diego had them for a year, then they just pulled them all out. It just wasn't worth it."

And even the most technologically sophisticated fans—such as those who work in the Bay Area's ubiquitous dot-com industry—are often surprisingly old-fashioned when it comes to enjoying the kind of ballpark experience they remember having as kids. "They're around computers all day," Schlough points out. "They say they're going to the ballpark to get away from that stuff for a while."



The Seattle Mariners, whose Safeco Field opened in July 1999, aren't experiencing a ticket crunch quite as severe as the Giants, but they too have a vested interest in countering the impact of auction sites like eBay.

Borrowing a page from eBay and Priceline, the Mariners responded in July by setting up their own Web site (www.mariners.org) auction pilot program, which offers tickets for selected games through a multilevel "market value" bidding system. This setup allows fans to bid on seats according to what they're willing to pay for them. Ticket buyers have a choice between buying seats at the current "bid" rate (which may be lower or higher than the tickets' face value, depending on supply and demand) or submitting their own bids and waiting to see if the market price adjusts itself to that bid by the close of the auction. If there is a match between the submitted bid and the closing "market price," the tickets are issued to the buyer, to be picked up at Safeco's will-call window before the game.

This system gives fans of limited means a chance to secure Mariners tickets they couldn't afford otherwise. For a recent Thursday night game against the Cleveland Indians, for example, "nosebleed" outfield upper reserved seats sold for $3.75, less than a third of the tickets' regular price. By the same token, fans who are willing to pay top dollar for choice field box seats are given the opportunity to get the best seats they can, at whatever price the market will bear.

The team also uses its Web site extensively for fulfillment of merchandise orders. The Mariners plan to host the 2001 All-Star Game at Safeco, and are now selling All-Star Game merchandise exclusively on its Web site.

Like many teams, the Mariners offer a "frequent fan" incentive program. The team's card-based Compass Club enables fans to earn points toward future ballpark and online purchases of Mariners merchandise.

A POS data capture system allows Compass Club fans to purchase Mariners merchandise anywhere—at Safeco, Nordstrom, Eddie Bauer, or even the Mariners' Web site—and earn points. The system runs on a SQL server relational database supplied by Martec, an Atlanta-based company that helped put together the first frequent shopper programs in the retail business. "It enables you to do partitioning on the fly, without bringing any systems down," says Tim Gross of Compaq's Business Critical Server division, which works with the Mariners on marketing programs. "And the team gets a complete capture of what fans are spending money on, and when."

The Compass Club is now the data source for some other innovative marketing programs. One such program is an inbound/outbound telemarketing system dubbed "rifle-shot CRM (customer relationship marketing)," developed with help from Compaq. The system tracks credit card purchases and then prompts telemarketing follow-ups to gauge the customer's interest in future purchases. "For instance, if a customer buys a baby outfit, a couple of years later someone can follow up with them to see if they want a youth uniform," says Gross. Gross stresses that Compass Club members are informed at the time they sign their contracts that they may receive such marketing calls in the future.



The granddaddy of fan incentive programs is the San Diego Padres' four-year-old Compadres Club, whose members are called "Frequent Friars."

Compadres Club manager Brook Govan, who helped develop the program, says the original idea came from the Padres' then-vice president of marketing, Don Johnson. "The team had just been sold, and the prior management, frankly, got rid of almost all our good players," Govan says. "And the baseball strike [of 1994-95] was still hurting ticket sales. After the city had been through that, they wanted to do something nice for the fans."

Essential Data Control Systems (EDCS) of Phoenix was called in to help develop the technical aspects of the operation. Govan was impressed by EDCS's handling of the club seating system at the Del Mar Thoroughbred Club, and thought the company would be the ideal one to help set up the Compadres kiosk-and-swipe-card system at Qualcomm (formerly Jack Murphy) Stadium.

Compadres Club members, says Govan, started arriving several hours early to the ballpark to swipe their cards in the kiosks and be "greeted" by a video message from a Padres player. "It changed the way people would be at the ballpark, and created a different culture for the fans." He says the program's commencement coincided with the development of "Padre Street" in the outer ring of the ballpark, which contains amusements and amenities for early-arriving fans.

The program operates on a per season purchase-points structure, and lifetime points are also tracked. Rewards are listed at the Web site (www.padres.com); fans who score high in lifetime points are given special privileges, such as early access to purchasing playoff tickets.

Today the Compadres Club encompasses roughly 155,000 members, including those in the Compadres Kids Club and Compadres de Mexico program for Spanish-speaking fans (these fans receive their Padre player kiosk greetings in Spanish). "It makes people from Mexico less intimidated when they visit us," Govan says.

The system continues to evolve as the Padres prepare to move to their new baseball-only park in 2003. In the near future, fans will be able to look up their points on the Padres' Web site, and even select the player they want to greet them the next time they swipe their cards. EDCS also worked with the Mariners on their Compass Club system, and has also helped create similar frequent fan programs for the Atlanta Braves and Anaheim Angels.