Like a fair princess drawn to a dashing prince, the quickening digital shift by consumers has lured Disney away from its brick-and-mortar retail stores and will see it instead pouring more energy and focus into its eCommerce platform.
In announcing its plan to shut “at least 60 stores in North America” this year — about one-fifth of its worldwide total — Disney called the move the beginning of a transformation to provide a more seamless, personalized and franchise-focused eCommerce experience.
“The global pandemic has changed what consumers expect from a retailer,” Stephanie Young, president of Disney’s Consumer Products, Games and Publishing division, said in the announcement, noting the company has been “focused on meeting consumers where they are already spending their time” for the past few years.
As it is, the shopDisney platform already offers an enormous assortment of hundreds of products and experiences under five primary verticals: clothing, accessories, toys, home and parks. But the company said it wants greater integration with Disney Parks apps and social media platforms.
The ‘D’ In Disney Is For Digital
To be sure, the retreat by Disney from its mall-based stores is in no way a deprioritization of the company’s effort to monetize its four primary franchises: Disney, Pixar, Star Wars and Marvel.
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In fact, the 97-year-old media and entertainment conglomerate said it plans to elevate its new and trendy merchandise offerings via a range of products, including adult apparel, artist collaborations, streetwear and premium home products.
In true digital-first retailing execution, shopDisney has already begun to embrace hot merchandising ideas like product drops, or what it more broadly characterizes as “stylish surprises and exclusive can’t-find-anywhere-else products and designer collaborations.”
Although the company is offering expanded delivery options, as of now it has not ventured into alternative payment plans, such as buy now, pay later (BNPL) and accepts credit cards and PayPal.
“Disney will remain flexible in its approach and continue to evolve its retail strategy to best meet the needs of consumers when and where they want,” the company’s statement said.
For those customers who still want to touch and browse in person, Disney said its customers would still have access to over 600 park stores, shop-in-shops, outlets and third-party retailers around the world.
Disney+
The eCommerce enhancements and refocus on the retail side also coincide with the company’s increasing reliance on streaming media content via its new Disney+ service, and will also allow for greater integration.
In its most recent earnings report released in February, the company said revenue from Disney+ increased 73 percent to $3.5 billion as the company’s paid user base topped 95 million households after a year-long free trial promo it ran with Verizon.
Although Disney’s Parks, Experiences and Products businesses collectively reported a 53 percent decline in revenues last quarter due to pandemic-related closures, attendance restrictions and cruise cancellations, its Consumer Products unit had an entirely different experience.
Where its domestic parks revenues fell 70 percent to $1.4 billion, its products sales were up 2 percent to $1.7 billion, and delivered a 5 percent increase in earnings of $941 million.
