Mattel Targets D2C Opportunity as Barbie Fever Supercharges Doll Sales

It has been a good year for Mattel, and the toy giant is looking to capitalize on the recent surge in enthusiasm to drive digital and direct-to-consumer (D2C) sales.

In a presentation shared with analysts Wednesday (Feb. 7) accompanying the company’s fourth quarter and full-year 2023 earnings report, Mattel shared that it benefitted significantly from the popularity of the Barbie movie, noting that the iconic toy became the best-selling doll property around the world and the second-most popular toy property overall.

The company saw worldwide gross billings in its dolls business increase by 29% year over year in the quarter and 15% for the full year.

“Consumer demand for our product continued to grow, and meaningful market share gains demonstrated the strength of our portfolio as a whole,” Ynon Kreiz, chairman and chief executive officer of Mattel, told analysts on a call.

“The breakout success of the award-winning Barbie movie was a showcase for our entertainment strategy and cultural relevance of our brands outside the toy aisle. Mattel is in the strongest financial position it has been in years.”

The company intends to leverage this brand relevance to drive direct engagement. Kreiz highlighted efforts towards “advancing eCommerce and B2C” as part of the company’s efforts to boost the performance of its toy business overall.

Winning the D2C Customer

Barbie and many of Mattel’s other brands already have one of the key qualities contributing to success via D2C channels — consumer trust. The PYMNTS Intelligence report “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” created in collaboration with Adobe, which draws from a survey of more than 3,500 U.S. consumers, found that when consumers are deciding where to shop online, trust is a key concern for D2C customers.

Fifteen percent of consumers making purchases from a brand’s own website or mobile app cited trust in the store as the most influential factor in selecting the type of store at which they made all or most of their purchases in the last 30 days, a greater share than said the same of any other factor.

Additionally, D2C channels are especially popular with Gen Z consumers, with the study finding that these young shoppers are the most likely to want to buy directly from a brand and the least likely to prefer shopping via merchants’ online stores.

Specifically, 43% of Gen Z said they definitely or probably prefer a brand’s own online store — above the 28% of the population as a whole that said the same. Conversely, 23% of these young consumers said they definitely or probably prefer a merchant’s online store, far below the 32% of consumers across generations said the same.

Granted, the digital opportunity does not only come from D2C sales. Overall, consumers are increasingly making purchases digitally. The PYMNTS Intelligence study “Consumer Interest in an Everyday App,” created in collaboration with PayPal, revealed that, of the 61% of U.S. consumers who had shopped for a non-grocery retail product in the previous month, 72% did so via connected device at least some of the time.

If It Ain’t Broke

Following the success of the Barbie film, in an effort to solidify the strength of its brands and generate similar enthusiasm across the rest of the company’s portfolio, Mattel is looking to its future films to drive performance, with 14 live-action movies and one animated film to come.

Indeed, this film-centric strategy may be especially effective given adults’ nostalgia for these properties, and the growing opportunity that adults represent in toy sales. A 2022 report revealed that 60% of the industry’s dollar growth over the prior 12 months had come from adults — even though they represent only a quarter of sales.

“The movie … was a cultural phenomenon,” Kreiz said. “It lifted the brand. It brought in the audience. And it played well also with adults, and especially with collectors.”

Plus, these adult buyers of toys are not only keeping the toys in the package as collectibles or reselling them to turn a quick profit — they are unpacking them and engaging with them, as a child would.

Mattel emerges from a strong fiscal year, bolstered by the success of its flagship Barbie brand and a strategic pivot toward digital and D2C channels. Positioned to capitalize on consumer trust and the growing adoption of eCommerce, the company aims to strengthen its industry foothold, with a slate of upcoming films poised to further captivate audiences and a growing adult collector market.