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Reanimation

Disney Store hopes to put magic back in sales by reinventing itself

By Debra Hazel

The Disney Store's new format is designed to hold 40% more merchandise.

A little more than a decade after helping create the so-called retailtainment category, The Disney Store is recreating itself in an effort to revive sales at the struggling chain.

In a dramatic departure from its original Disney character- and film-dominated format, the company's new concept is intended to rejuvenate what analysts called tired design and merchandising.

Abandoning its former practice of emphasizing movie tie-ins up front, Disney's new design removes character-laden storefronts and showcases general merchandise in the entrance.

The first store in the new prototype opened in early October in South Coast Plaza in Costa Mesa, Calif., followed by a newly remodeled unit at Cherry Hill (N.J.) Mall later that month. Plans call for remodeling between 20 and 30 more stores this year.

The Glendale, Calif.-based chain now has more than 700 stores in 10 countries, including 565 in the United States.

While the Walt Disney Co. does not break out specific numbers for the Disney Store, it admitted in its annual report that overall sales have been declining in recent years. One reason: None of Disney's subsequent animated films have achieved the financial success of "The Lion King" (1994), nor have the related products sold nearly as well.

Disney, according to entertainment analyst Jessica Reif of Merrill Lynch, tended to split its merchandise mix: one-third dedicated to current film tie-ins, one-third to Winnie the Pooh and one-third to Mickey and the classic characters. Weakness in any one-third was bound to adversely affect overall chain sales, she noted.

Actually Disney, in an effort to boost productivity, had committed to remerchandising even before the current redesign was rolled out.

"Positive signs are already emerging from better inventory management and more focused merchandising efforts," wrote Jill Krutick, entertainment analyst for Salomon Smith Barney, in a Sept. 28 report.

All around the United States entertainment and entertainment-related stores are struggling. Disney's chief competitor, Warner Bros. Studio Stores, is closing its 57th Street flagship New York City store this month, and likely will shutter several other locations. Meanwhile, Coca-Cola closed its Fifth Avenue store last year, and Viacom shuttered 15 Nickelodeon stores and one Viacom Entertainment unit in 1998. The entertainment industry itself also has taken a hit, as several movie theater chains filed for Chapter 11 last year (SCT, December 2000).

"Unfortunately, [theme stores] have also gotten swept up in the lousy performance of theme restaurants," said Faith Hope Consolo, vice chairman of New York City-based Garrick-Aug Worldwide, a retail leasing firm. In addition to the well-publicized woes of Planet Hollywood, other chains such as Jekyll & Hyde and All-Star Cafe have been closing units.

Disney first announced plans for a redesign in fall 1998, and used several firms as well as its in-house staff to complete the new look.

"When the first Disney store was opened in [Glendale, Calif.] in 1987, we defined entertainment retail with great character merchandise, innovative store design and great guest service. We're trying to accomplish that again for the 21st century, to make it more relevant to our current guests' shopping experiences," said Doug Murphy, senior vice president and general manager for Disney Store—North America.

"We're doing that, basically, by letting the merchandise take center stage," Murphy said.

"The whole store is lighter, cleaner. It's a purposeful departure from the other stores in the mall."

The new format is much more flexible, allowing the presentation to be changed according to the season. While the store size remains about 4,000 square feet, that adaptability allows it to hold 40% more merchandise.

"We have much more on-stage capacity, but it feels cleaner," Murphy observed. "They look great, brighter. There's more selling space, more inventory," said Merrill Lynch's Reif.

"There was nothing wrong with the old store, but it wasn't working."

Seasonal merchandising schemes are also key to the revitalization plan, according to Disney officials.

"Our new approach is dedicated to the everyday activities of our guests—whether it's back-to-school, holiday, or vacation summer-and-fun. So we've created a merchandise program to support that," Murphy said.

The usual Disney references remain: Video monitors are arranged geometrically to allude to Mickey Mouse, and the gray-beige terrazzo floor is highlighted with black circle patterns that shape the familiar mouse.

Bold signs highlight "departments," making it easier for customers to find merchandise. The cash wrap, previously in the middle of the store, is now under a six-foot D logo at the back, forcing customers to move throughout the presentation.

A media wall featuring eight video screens is designed to entertain customers and promote merchandise.

"Its purpose is to be much more thoughtful of the message we're sending," Murphy said. "We're trying to marry Disney content with commerce, and use that media wall to communicate to our guests what we're all about. We're trying to be about one big idea, as opposed to trying to be everything to everybody."

Because the prototypes opened during the Halloween season, costumes were the initial "big idea." Directly across from the media wall, apparel was hung high on the "feature wall."

A center fixture between the media and feature walls bears merchandise pertinent to the "big idea." This theme will change with each selling season: The holiday idea was "102 Reasons to Visit the Disney Store," which tied in with the film studio's release of "102 Dalmatians."

Another goal is to become a destination for gifts, whether for newborns, children or newlyweds. The infants and children's businesses have been expanded along with home goods offerings (including a toaster that burns—naturally—Mickey Mouse into the bread). The number of adult apparel items has been dropped.

"We're offering a lot less styles and SKUs, and we're very focused," Murphy said.

The Disney Store's new prototype features Web-connected terminals for online purchases.

The stores also incorporate e-commerce, offering Web-connected terminals available for online purchases and information on Disney vacations. In addition, child-oriented terminals allow kids to play while parents shop.

"We believe there is an enormous opportunity in offering products and services online and using them to enhance the experience," Murphy said.

While at press time the two new Disney Stores had only been open a few weeks, the reviews have been good thus far.

"The reaction has been very positive. It's really a customer-friendly store," said Gerry Cipolla, marketing manager of Cherry Hill Mall. "You can see strollers and even some double strollers going through the aisles."

The new South Coast Plaza location is next to its old site; the original 11-year-old Cherry Hill Mall Disney Store closed from July through October for the remodeling.

"The store activity has been very brisk at times it ordinarily wouldn't be," such as during the soft opening the week before the Oct. 27 grand opening, and early Sunday morning, Cipolla added. In fact, people may have been waiting for an excuse to return to the Disney Stores.

"There will always be a market [for Disney]; there's a nostalgia of Disney being a part of youth," Consolo said. "The Disneys, the Warners, the ones connected to the entertainment business will survive, Disney particularly."

Disney itself is happy, thus far. "We've received a tremendous amount of positive feedback from our guests both at South Coast Plaza and Cherry Hill Mall. They have been quick to embrace the new design and the new merchandise as has been evidenced by sales and traffic," Murphy said.

"We are encouraged by the initial results and are eager to begin bringing the new design to our stores throughout the country."

 

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