The use of the beacon technology as a disruptive innovation of the RET! Digital Transformation Project (Group 12)
This Digital Transformation Project will evaluate the use of the beacon technology for the Rotterdamse Elektrische Tram (RET from now on). The RET is active since 1878 as a Dutch public transportation company. At this moment, the RET has 2685 employees and 10 offices in the Randstad. In 2013, RET had a net profit of 10.9 million euros, compared to a net profit of 10.3 million euros in 2012.
The RET’s main focus are its customers, for whom RET aims to provide a high quality traveling experience and therefore RET always tries to improve customers’ experience and convenience. The mission statement ‘On the right tracks’ aligns with its customer focus. RET’s business strategy prioritizes customers at all times.. The customer satisfaction rate had an average of 7.5 in 2013. In order to maintain and improve travelers convenience RET needs to innovate frequently
The beacon technology was introduced in mid-2013. The beacon can be seen as a transmitter. When a device, for example an iPhone, comes in range of a beacon, the beacon will send out a signal with a universally unique identifier. The beacon system works with Bluetooth Low Energy, which is very energy efficient.
Currently, the RET can make money with the advertisements on its trams. RET used to have advertisements on their buses as well, but this is no longer possible because of a change in the concession the RET has with the local government. As a result, RET lost a part of its income. In the near future the RET might not be allowed to put advertisements on their trams either.
The beacon technology can change the way RET makes money on advertisements. The beacon technology also makes it possible to provide travelers with up-to-date travel information. In this case, travelers are no longer restricted by applications from third parties. With beacons, a traveler can easily check which specific tram or metro he or she needs. By providing travelers with up-to-date travel information, RET might also decrease their delays.
By implementing a new, pay per click (PPC) advertising model the RET can benefit hugely from the new mobile Beacon application. When travelers actually open the pop-up to see more information or reviews, the advertising company will pay per click. In this way the beacon technology makes it possible to create an extra cash flow.
Because the beacon technology fits within RET’s current mission statement, the technical and financial implementation are limited and furthermore, due to a new advertising model the implementation of the beacon technology will be profitable within its second year. With this implementation, a high quality of traveling for public transportation will be achieved. We recommend the RET to start a pilot in which the possibilities of the beacon technology are tested. It is crucial to know if customers experience this new technology as convenient.
By reading the full report, a clear analysis will be provided about the implementation of the beacon technology and the feasibility of this implementation. It is highly recommended to implement this technology, in order to achieve a higher quality of traveling for public transportation.