Disney Stores: The Hard-Sell Out!
By Bert Dawes and Merlin Jones
In 1987, an innovative concept was launched by the Walt Disney Company, one that would blossom into a profitable chain of retail stores throughout the United States and around the world. It was a concept that would strengthen the ties between the entertainment and merchandising industries, and it would ultimately become the blueprint for copycat conglomerates. The idea would bring a taste of Disney's theme parks to your home town through a themed shopping experience called The Disney Store.
The prototype opened its doors at the Glendale Galleria in California, and proved wildly successful. Offering a mix of Disney memorabilia for the whole family - - from high-end art and collectibles to low-end novelties, The Disney Stores became ground zero for an enormous expansion of the Disney consumer products engine. By 2001, there would be more than 700 stores worldwide, with over 25,000 employees. During the Disney animation renaissance of Beauty and the Beast, Aladdin and The Lion King, and the initial video releases of the Disney Classics, mountains of merchandise were moving out the door.
But in recent years, sales have plummeted as The Disney Store merchandise mix and target demographics changed, quality and service evaporated, sales techniques became more aggressive, certain characters were overmarketed while others seldom appeared and poorly conceived films failed to catch on with audiences. Even successful new properties from Pixar, such as Finding Nemo have failed to fully re-ignite the flame.
Has the Disney mass-marketing concept reached a saturation point, or was the operation simply mismanaged? Let's take a trip to the mall...
The inspiration for The Disney Stores goes way back to 1930, when George Borgfeldt & Co signed the first contract to license Disney character merchandise. The deal was inspired by California resident Charlotte Clark, who is credited as the first designer of an actual Mickey Mouse doll earlier in 1930. She had obtained permission from Disney Studios and her dolls began making local appearances in Los Angeles Stores, most prominently at Bullock's Wilshire. But sudden demand far outstripped Clark's ability to manufacture the hot new fad. So, the Borgfeldt deal was born to get the Clark dolls out to the nation... and the world.
The Disney Brothers were among the first to grasp the potential of "synergy" through merchandising that not only provided additional production funds for Walt's ever-more elaborate cartoons, but also helped to promote the films and characters and even the Walt Disney name. But it was another savvy entrepreneur who helped the Disneys take their merchandise to a whole new level.
Herman "Kay" Kamen, a Kansas City advertising executive, made a telephone call to Walt Disney in 1932, expressing interest in Disney character merchandise. Impressed by Kamen's expansive ideas, Walt and Roy hired him as their representative.
Quality was the name of the game for the Disneys and they had been disappointed by the concept and delivery of some merchandise under the current contracts. They wanted "Mickey Mouse" and "Walt Disney" to be associated with only the best product. When the Borgfeldt and Levy contracts ran out, Kamen became sole representative for Disney character merchandise. He set about canceling contracts where the products were poorly made or prices inflated to gouge customers for the Mickey image.
Kamen was responsible for licensing an avalanche of Disney consumer products, including the famous Mickey Mouse watch that burst onto the retail scene in 1933. Within eight weeks of its production, the demand for the wrist-watch was so great that the Ingersoll-Waterbury Clock Company that produced it had to add over 2,000 employees to its payroll. In 1934, The Lionel Train Corporation was saved by the sales of a Mickey Mouse handcar. By 1936, it was, as author Cecil Munsey calls it, "a Mickey Mouse World."
The phenomenon as described by one 1935 writer: "Shoppers carry Mickey Mouse satchels and brief cases bursting with Mickey Mouse soap, candy, playing cards, bridge favours, hair-brushes, china-ware, alarm clocks and hot-water bottles, wrapped in Mickey Mouse paper, tied with Mickey Mouse ribbon and paid for out of Mickey Mouse purses with savings hoarded in Mickey Mouse banks. At the lunch counter- Mickey Mouse table covers and napkins - they consume Mickey Mouse biscuits and dairy products while listening to Mickey Mouse music from Mickey Mouse phonographs and radios. Then, glancing at their Mickey Mouse watches, they dash away to buy Mickey Mouse toothbrushes, - they wear Mickey Mouse caps, waists (shirts and blouses), socks, shoes, slippers, garters, mittens, aprons, bibs and underthings, and beneath Mickey Mouse rain-capes and umbrellas, they go to school where Mickey Mouse desk outfits turn lessons into pleasure. They play with Mickey Mouse velocipedes (tricycles), footballs, baseballs, bounce-balls, bats, catching gloves, doll houses, doll dishes, tops, blocks, drums, puzzles, games, paint sets, sewing sets, drawing sets, stamping sets, jack sets, bubble sets, pull toys, push toys, animated toys, tents, camp stools, sand pails, masks, blackboards and balloons - until day is done, when they sup from Mickey Mouse cups, porringers (bowls), and baby plates and lie down to sleep in Mickey Mouse pajamas between Mickey Mouse crib sheets, to waken in the morning smiling at Mickey Mouse pictures on the nursery walls covered with Mickey Mouse wallpaper."[1]
Sounds a bit like our modern Disney Store, doesn't it? But in the 1930's, licensing programs of this scope were unknown. Mickey's sales were a revelation.
The public hunger for Mickey Mouse novelties expanded to include The Three Little Pigs as the film swept a depression-plagued nation. Donald, Goofy and Pluto soon followed. When Snow White and the Seven Dwarfs was released in 1937, characters from full-length theatrical films entered readily into the merchandising arena and the rest, as they say, is history.
Walt Disney's boutique movie studio was not initially in the business of making and selling merchandise, everything was done through licenses to manufacturers, marketers and retailers worldwide. It wasn't until the opening of Disneyland in 1955 that the Disney Company would start to operate their own retail stores.
The stores that were created for the theme park hosted a combination of Disney concessions and "outside" retailers. As such, the Disneyland outlets sold product that featured the Disney characters from motion pictures and television shows, but also provided unique non-character merchandise tied to the various themed areas of Disneyland. In Frontierland, for example, there was the Pendleton Woolen Mills Dry Goods Store which sold Western clothing and an Indian Trading Post that sold Native American arts and crafts. The Adventureland Outpost sold replicas of African, Asian, Middle Eastern and South American art, and the One of a Kind Shop in New Orleans Square sold authentic antiques. There was the Candle Shop on Main Street, along with a Wurlitzer Organ Store, an apothecary and even The Wizard of Bras. At Disneyland there were always outlets that featured unique items one could purchase nowhere else.[2]
These original concessions co-existed happily with the Disney-licensed merchandise. The arrangement offered Disneyland guests the freedom of choice in purchasing their souvenirs. There was something for everybody of every age. No guest was pressured into buying specific items. The Disney idea was that - if you loved the experience, the characters, the locations, or just the exotic theme, you might want to take a memory home with you. It was a successful formula. The synergy of the theme parks and retail outlets were forever established.
Also in the 50s, Disney consumer products hit the jackpot with Davy Crockett, The Mickey Mouse Club and Zorro, when baby boomer fads drove the sales of coonskin caps, mouse ears and masks to near atomic levels.
As Disney further expanded their Empire in the 50s, they would come to make and distribute their own records on the Disneyland/Buena Vista label. Like television, the recordings helped to promote new properties and perpetuate older characters to new generations. As Annette crossed over from child star to teen queen, she took her vast TV audience along with her via rock & roll hits on the Disney label.
By the 60s the Disneys had a successful formula down pat. New characters and reissued favorites would be rolled out with great fanfare to accompany theatrical releases via long-term licensees such as Golden Books, Whitman, Aladdin and Parker Bros. Through an exclusive deal with Sears, Winnie-the-Pooh began his Disney merchandising career in the mid-60s, while a nostalgic revival of 30's era Mickey Mouse merchandise in the 70s brought the "Disneyana" tale full-circle.
The characters themselves have always been at the core of Disney's merchandising success. That meant keeping a consistent portrayal of specific personality traits, art styles, attitudes and themes, avoiding the trendy in favor of the true-to-character. It is these qualities that built the lovable and lasting friends the public wanted to take home. Sears Pooh merchandise, for example, was carefully controlled in tone and type of product to reflect the cuddly, winsome qualities of the A.A. Milne originals. This would not always be the case...
By the 80s, Disney merchandising and licensing had slowed into a familiar routine largely aimed at the youngest of kids. It was the surprise demand for Tyco's Little Mermaid doll that hinted of a major turnaround. So too, the explosion of animation art collectibles, cels and limited edition collectibles pointed to new high-end opportunities. But the biggest boost to Disney's consumer products bottom-line was first-ever offering of Walt Disney's classic films on home-video. The film library had always been tightly capped to assure successful theatrical reissues every generation. Consumers were built into a frenzy thinking they might miss out on the release of an animated classic before it went back into the vault.
The Disney Stores opened at the right place at the right time to exploit this growing demand, with a baby boomlet and nostalgic boomer base that would provide a huge wave of consumers to remake the company's fortunes.
With Disney Stores across the United States and in other parts of the world, Disneyana became available on a much wider scale in locations other than the theme parks. Until then, most Disney merchandise (except for certain evergreens) was timed to a film's release or re-release and was rather limited in availability. This always kept the Disney merchandise "special" and the shopping trips to the theme parks exciting. The Disney Stores, in time, changed the ways collectors and the general public related to Disney merchandise that was always available in mass quantity.
With their innovative and balanced offerings to children and adults, fans and families, The Disney Stores enjoyed several years of outstanding success. The Disney Store became a leader in marketing and merchandising activity. Greeted by helpful and smiling Cast Members, steeped in the Disney culture of guest service, people in every city where a Disney Store was located were able to sample a bit of Disney magic on their own turf, without a visit to Anaheim or Orlando.
This approach became so successful, in fact, that The Disney Stores soon observed a new neighbor in many of the malls in which they were located. Warner Bros. Stores were popping up in the shadow of every prominent Disney outlet, as serious competition with their own lineup of Warner/Turner/Hanna-Barbera/DCComics character merchandise.
And then it happened. Things began to change for the Walt Disney Company in 1994 after the passing of Frank Wells, whom many Cast Members fondly remember as the individual who maintained balance in the Disney echelon. Driven by strategic planners who wanted to change the company's direction, and by a demand for 20% growth at all costs, the company fell under the spell of MBA retailing wonders who instigated a downward spiral that continues to this day.
The Stores began to "maximize" sales per square foot. Since the popularity of Winnie-the-Pooh had exploded (by design of marketers), it was assumed that the more Pooh they offered, the more they would sell. This worked in the short term. Pooh began to push all of the other characters, including Mickey, off the rack. Increasingly, all the merchandise started to look alike, with the same character poses and little of the product freshness and originality of the early years.
To drive profits, lower cost manufacturers and materials were sought, creating cheaper look-alike lines of color-coded "brands." The items were now often the same low-cost templated products in a few different character flavors geared to specific demographics. Only the logos and pictures would change. Quality suffered. The marketing message was thought to be more important than the item for sale.
To achieve their financial goals, top management began to ignore the needs and recommendations of The Disney Stores Cast Members and most importantly, the needs and desires of the Public.
With the arrival of Disney Store retailer Paul Pressler to Disneyland, it was decided that theme parks were really one big mall. It was the stores that were important, not the rides or experiences. And to maximize sales, buyers would apply the same theories used to push Pooh and plush at The Disney Stores. They would mass market across all of the parks only the most popular products, or those most likely to turn over quickly. One by one, unique retail concessions at the parks were eliminated. The public no longer had a choice: guests were to purchase Disney items or none at all. The retail concessions in every theme park land were to sell the same merchandise: and nothing else. For a time, even the unique logos of the various parks were nearly phased out in favor of a generic corporate "Disney" logo. After all, there were cost-savings in bulk manufacturing. Many items that appealed to adults were eliminated to concentrate on children's items. Only the most heavily marketed characters would be used now, as many Disney fan favorites became has-beens in their own kingdom.
At the Disney park and stores, balance was out and saturation was in.
The reign of the Princess began... Once unique and individual characters, the heroines of Disney's animated features were grouped together in a marketing sorority "brand" to rival Barbie and her desirable demographics. While sales were impressive, the characters began to suffer a sameness and lack of personality with the flavorless corporate marketing blitz, as had Mickey and Pooh before them. Snow White was put on a diet, no longer the company's corn-fed leading lady with the unique soprano, but simply "the dark-haired one" amongst the other Stepford Princesses. Same smile, same poses, in a group, all the time.
Other characters followed down this path as their fates were cast by marketers unfamiliar with (and uninterested in) cartoons and subtleties of personality. Milne's "gloomy ol' Eeyore" was suddenly a smiling softie! ...Prozac in the 100 Acre Wood?
Product artwork also suffered the trends, with an entire Animation Research Library of expressive character drawings from the Nine Old Men going ignored for sometimes tacky new poses, often drawn "off-model" by underpaid and overworked freelancers.
Kay Kamen where are you?
Outside of the Pooh and Princess parade, it became known to Disney collectors that the last place to look for items related to the Walt Disney era was at the Disney Store! But why look for Disney videos and CDs at a Disney Store when they were cheaper at Best Buy, Target or Amazon.com anyway? And the high-end Disney Gallery collectibles had long since vanished from the chain.
The Disney Stores experienced the same dire situations in outlets around the world: Cast Member hours were cut back but duties expanded, wages remained low, and job security declined. Throughout the chain, on orders from management, the hard-sell of lower quality items and pre-order schemes escalated, and customer service was drastically cut back, leaving the front line Cast Members to deal with an increasingly dissatisfied public.
Worse yet, a seemingly endless series of divisional management changes and schemes to "fix" declining sales have left the stores with a lack of focus and purpose. Plans to divide the operations into lifestyle dependent Disney Stores (DisneyHome and DisneyPlay) were abandoned before they began, even as a half-baked redecorating initiative changed many Disney Stores from delightful three-dimensional character themes to Gap-like cardboard postmodern displays of the lowest cost.
Increasingly, the Stores have resembled clearance centers with even new character merchandise marked-down to half-price while a movie is still in theatres! What this does to the perceived value of Disney's properties is incalculable.
No, this gloom and doom is not mere conjecture on our part. We've heard it all from those who know best: the dedicated and hard-working Cast Members of the Disney Stores, whose job security is now threatened by rumors of closure or sell-out. Here are only a few of the many letters that have been sent to us that underscore the point:
"We are a dedicated bunch who love Disney and have stuck it out at the stores even though the powers that be have deemed it in the best interest to take away many of the products that guests would come to us for. Not only has great product been taken away from us, but all of the little things that were once given to the cast as tokens of appreciation, have been taken away as well. Morale as a whole is low and the focus has shifted from guest service and entertainment to selling anything and everything to every guest that walks through the door. How things have changed in 8 years!"
Another soon-to-be Former Cast Member writes: "Last year, the cast of the Disney Store division was told that we would be put up for sale. This was devastating news to us. Since then, there have been numerous rumors and no information from anyone in our division in a place to give honest answers. At the meeting in Philadelphia, presidents and division heads of all areas of the Walt Disney Company and subsidiaries were paraded out to give their state of affairs reports about their respective divisions. It was painfully obvious that not one representative from the store division was present to speak about our challenges for the future."
A Former Cast Member from Colorado says it all: "When I was a Cast Member in the early 1990s, the Disney Stores had such a wonderful selection of Disney merchandise. The stores were clean, fun and the Cast Members were taught Guest Service in the Disney Tradition. There was something to interest everyone that came into the store, from infants to 95 year olds!
"Shortly after the death of Frank Wells, I noticed changes. The Cast Members were strongly encouraged to participate in 'suggestive selling.' i.e. push the merchandise! Before this policy, the guests were buying more merchandise without being pressured. The great selection of merchandise and "Disney magic" did the selling. Once the guests were being "suggested" into buying more merchandise, it ceased to be enjoyable for them.
"The stores formerly had adult apparel that sold quite well. In about 1993 the adult apparel started to disappear. Guests requested adult apparel all the time, but the pleas fell on deaf ears. Now almost all collectibles are gone from the very few remaining stores. No Walt Disney Classics Collection. Hardly any watches. Very little adult apparel is available. No cells or framed artwork. There are very little video and audio products.
"For the past 5 years or so, all the stores had was: Pooh, Pooh, Pooh, Princess, toddler and infant apparel. In the early years the stores had something for nearly everyone of every age. Now unless you have a young girl, toddler or infant, there is very little to interest anyone. The stores have very little Mickey, Minnie, Donald Duck and Goofy merchandise. A die-hard Disneyphile can now walk into the stores and find nothing that interests them.
"The stores are now in poor repair and are no longer 'Disney clean.' The morale in the few remaining stores couldn't be worse! The Cast Members used to love their jobs and the enthusiasm was obvious to guests. Now there are a lot of sad faces in the stores.
"Eisner blames the store closings on a "changing market." He says the Wal-Marts have taken over the Disney Store sector of the business. This couldn't be any farther from the truth. The Eisner team purposely killed the Disney Stores!"
Cast Members are especially vulnerable to the tactics of today's top management in many personal ways: "As a Cast Member of the Disney Store, one of the reasons why I joined was a sense of belonging to the Disney Company and the benefits of being a Cast Member. Over the past year, more and more advantages of being a Cast Member have been removed, and being a part-time Cast Member you don't look at the pay scale, you looked at being part of Disney, and being part of the Disney Family.
"Now, with the possibility of The Disney Stores being sold (which I hope does not happen), the benefits that we had as Disney Cast Members are being reduced. We use to get into the Parks for free, (that's now) gone, we used to get discounts at Disney Quest; we used to get a solid discount (50%) off our hotel rooms, now it's at 25%, we used to get in the water parks at a reduced rate, (all of those benefits are) gone. I feel if the Disney Stores are sold, there will be a mass exit of some very good people, which is a shame because the Disney Store I come from is doing very well and there are many good and hard working people there, that love to work for Disney. But we are being pushed aside, forgotten about, we are treated like Cinderella by her Step-sisters and Stepmother. Is that what the Disney Stores and the employees (have) become, the ugly step child? I hope Corporate will review its plans on the selling of the Disney Stores, and review the benefit package of being a Disney employee, it's not about pay scale it's about being recognized as a contributing element of the Disney Company and being treated as that Cast Member."
Throughout the chain of Disney Stores, rumors of closure abound: "I am a long time Disney fanatic and have just started to work in the Disney Stores just about 6 months ago. I knew wholeheartedly that I was gonna be the best Cast Member anyone had ever met but have had more on my mind than the guest, who should come first. Recently everyone has been speculating that the stores will be closed or sold to the next high bidder to get in on a piece of the magic. Not only do I worry about my job but the only thing I hear from upper management is that everything is fine and to not worry about anything. Disney shelters its Cast Members so much from knowing what might happen, that I haven't even started to look for a new job if something might happen to the stores. My first love in life has been Disney and by the way that they conduct business now, I see how the new Corporate Disney smacks around its cast and doesn't entrust any information to them. Soon people start rumors which have now been placed into the mass media. I know that many people are worried about their jobs within this company but if the stores are to close it will displace almost 4,000 people if not more."
Even Cast Members in Europe are experiencing Eisnerian directives: "I work as a manager with the Disney Store. At the moment I'm being bullied out of my position because I focus too much on bringing Magic to guests and Cast and too little on hard sales techniques! I know Walt would be upset to know that his Cast is forced to behave in a manner which doesn't match the true, important values of the company which made it so successful in the first place!
"I have seen the Magic be stripped away at the Disney stores in an effort to make stores more commercial but instead they are losing the magic that has made them less successful! Maybe if Senior Management listened to the Cast who deal with guests on a daily basis they would have known that stripping out the Magic was not going to work!
"Anyway I felt it was important for you to know that as I face incredible pressures at work, I am being bullied to the point (that) it's making me sick! I cannot believe that people above me work for Disney! They use foul language and dirty techniques and if you don't agree with them then that's it! You're doomed to be 'managed out'! However, I feel the True Magic of Disney will help me get through this! I am reminded of Walt's saying 'all the adversity I've faced in my life only makes me stronger!' So I hope that if I can survive this assault on me by my senior managers it can only make me a better manager for the future! A future that I hope will still be with the Walt Disney Company! I believe in the balance of MAGIC and good long term business sense! Making a cheap buck is not an option!" This last letter is signed by "an unhappy, bullied Cast Member who is working hard and trying to stay positive to the keep the MAGIC strong" in his European Country. We can only hope that all of the Disney Stores Cast Members may be able to have such a positive outlook for the future.
The public is also very astute. They know when things are awry. Here are only a few thoughts from Guests who have written in with their concerns for the Disney Stores, or have posted on the web:
"I have wanted to have my say for years re: the Eisner Empire Disaster. I am a huge Disney fan but it has run amok and it has now had its day. I think the Disney stores are a bust-again, mass production, marketing (that) makes going to the magical land of Disney anti-climactic."
"The problem here is originality. TDS specifically has gone from an innovative retail leader and an extension of the parks to a store that is struggling to keep up with industry trends VS. creating them."
"I used to enjoy walking into the Disney Store and looking around at all the collectibles and what not. Now I don't want to even step in there. It's nothing more than a bunch of three year olds running around wanting to get the latest Disney toy from the latest Disney sequel."
The closing of many local Disney Stores around the world began to occur in 1999 and has been escalating ever since. Sales have been dropping at the Disney Stores over the years and maintenance has been sacrificed, along with quality of merchandise. The Executive Team of the Walt Disney Company blames progressive failure of the Disney Stores on the economy, the changing tastes of the public, and even 9/11! There's an interesting expression that reads like this: "Always remember that when you point your finger at someone else, there are three other fingers pointing right back at you!" It's certainly not the changing tastes of the public that has been responsible for failure of the Disney Stores as Executive Management claims. Disney characters are as beloved around the world as they have ever been. Perhaps it's the "three fingers" pointing back to the Executive Management Team that is truly responsible. In other words, perhaps it's their own actions regarding the elimination of product for all ages, the saturation of poor quality merchandise and conducting business on the cheap that is responsible for the plight of the Disney Stores as it stands now.
When the Warner Stores overmarketed the Looney Tunes characters and eliminated merchandise that would be of interest to all age brackets, the formula didn't work and the Warner Stores were closed by fall of 2001. They still maintain an on-line shopping capability, but the local stores are gone. At least the executives of the Warner Company took responsibility for implementing a failing formula. The Disney solution: sell the chain and make it somebody else's problem, as certain executives at the Walt Disney Company have suggested.
Consumers aren't stupid. They know quality merchandise when they see it. It isn't difficult to become angry and put off when the seams of garments pull apart in only a couple of weeks, or when toys easily break, or when the appearance of merchandise is just plain tacky.
Cutting back maintenance so that Disney Stores look like clearance warehouses, or cutting back Cast Member hours so that they barely earn a livable wage, or resorting to doubling and tripling Cast Member duties in limited time frames and issuing orders to conduct the "hard sell" are not ways in which to create a "magical" environment, for Cast or consumer. If it were not for the dedication of the Disney Stores Cast Members to carry out the friendly, helpful and welcoming attributes of the Disney Legacy, the Disney Stores would have foundered long ago. Rather than treat their Cast Members like feudal serfs, it would be best for the Executive Management Team of the Disney Stores to learn from their Cast Members. Cast Member service and experience has been a keystone of the Disney Stores operation.
In the winter of 2003, rumors began to fly that the Disney Stores may be sold to Wal-Mart (or a host of other chains) in the United States and that the European Disney Stores may also be sold. Japan's Disney Stores have already been sold to Oriental Land Company, owners of Tokyo Disneyland and DisneySea. Australia's Disney Stores have been closed altogether!
The Eisner board of Directors has thrown up a smoke screen to their methods of conducting Disney Store business. When asked about the fate of the Disney Stores during the 2nd Quarter Conference Call that was broadcast on the Disney Investors website on Wednesday, May 12, 2004, Michael Eisner vaguely stated that "We (The Walt Disney Company) are still on track to consider selling the stores. We haven't changed our position. We are still pursuing discussion on the subject."
When pressed for an answer from the Board, Disney Stores Managers, Cast Members, Shareholders and Consumers alike receive only silence and speculation. What is The Board of Directors' position? What are they discussing? As far as the Board is concerned, it's just "business as usual." The trouble is that no-one except the Board of Directors knows what the usual business is.
It's hard to be The Disney Store when the business is no longer "Disney."
[1] ibid. - pp110-111.
[2] To read about these long-closed shops and other Disneyland attractions, log onto Yesterland.com, a website that is dedicated to the sites and sounds of yesterday at the Disney Theme parks. You may find it in our links section.
Great article, sad but very true!!!
By Bert Dawes and Merlin Jones
In 1987, an innovative concept was launched by the Walt Disney Company, one that would blossom into a profitable chain of retail stores throughout the United States and around the world. It was a concept that would strengthen the ties between the entertainment and merchandising industries, and it would ultimately become the blueprint for copycat conglomerates. The idea would bring a taste of Disney's theme parks to your home town through a themed shopping experience called The Disney Store.
The prototype opened its doors at the Glendale Galleria in California, and proved wildly successful. Offering a mix of Disney memorabilia for the whole family - - from high-end art and collectibles to low-end novelties, The Disney Stores became ground zero for an enormous expansion of the Disney consumer products engine. By 2001, there would be more than 700 stores worldwide, with over 25,000 employees. During the Disney animation renaissance of Beauty and the Beast, Aladdin and The Lion King, and the initial video releases of the Disney Classics, mountains of merchandise were moving out the door.
But in recent years, sales have plummeted as The Disney Store merchandise mix and target demographics changed, quality and service evaporated, sales techniques became more aggressive, certain characters were overmarketed while others seldom appeared and poorly conceived films failed to catch on with audiences. Even successful new properties from Pixar, such as Finding Nemo have failed to fully re-ignite the flame.
Has the Disney mass-marketing concept reached a saturation point, or was the operation simply mismanaged? Let's take a trip to the mall...
The inspiration for The Disney Stores goes way back to 1930, when George Borgfeldt & Co signed the first contract to license Disney character merchandise. The deal was inspired by California resident Charlotte Clark, who is credited as the first designer of an actual Mickey Mouse doll earlier in 1930. She had obtained permission from Disney Studios and her dolls began making local appearances in Los Angeles Stores, most prominently at Bullock's Wilshire. But sudden demand far outstripped Clark's ability to manufacture the hot new fad. So, the Borgfeldt deal was born to get the Clark dolls out to the nation... and the world.
The Disney Brothers were among the first to grasp the potential of "synergy" through merchandising that not only provided additional production funds for Walt's ever-more elaborate cartoons, but also helped to promote the films and characters and even the Walt Disney name. But it was another savvy entrepreneur who helped the Disneys take their merchandise to a whole new level.
Herman "Kay" Kamen, a Kansas City advertising executive, made a telephone call to Walt Disney in 1932, expressing interest in Disney character merchandise. Impressed by Kamen's expansive ideas, Walt and Roy hired him as their representative.
Quality was the name of the game for the Disneys and they had been disappointed by the concept and delivery of some merchandise under the current contracts. They wanted "Mickey Mouse" and "Walt Disney" to be associated with only the best product. When the Borgfeldt and Levy contracts ran out, Kamen became sole representative for Disney character merchandise. He set about canceling contracts where the products were poorly made or prices inflated to gouge customers for the Mickey image.
Kamen was responsible for licensing an avalanche of Disney consumer products, including the famous Mickey Mouse watch that burst onto the retail scene in 1933. Within eight weeks of its production, the demand for the wrist-watch was so great that the Ingersoll-Waterbury Clock Company that produced it had to add over 2,000 employees to its payroll. In 1934, The Lionel Train Corporation was saved by the sales of a Mickey Mouse handcar. By 1936, it was, as author Cecil Munsey calls it, "a Mickey Mouse World."
The phenomenon as described by one 1935 writer: "Shoppers carry Mickey Mouse satchels and brief cases bursting with Mickey Mouse soap, candy, playing cards, bridge favours, hair-brushes, china-ware, alarm clocks and hot-water bottles, wrapped in Mickey Mouse paper, tied with Mickey Mouse ribbon and paid for out of Mickey Mouse purses with savings hoarded in Mickey Mouse banks. At the lunch counter- Mickey Mouse table covers and napkins - they consume Mickey Mouse biscuits and dairy products while listening to Mickey Mouse music from Mickey Mouse phonographs and radios. Then, glancing at their Mickey Mouse watches, they dash away to buy Mickey Mouse toothbrushes, - they wear Mickey Mouse caps, waists (shirts and blouses), socks, shoes, slippers, garters, mittens, aprons, bibs and underthings, and beneath Mickey Mouse rain-capes and umbrellas, they go to school where Mickey Mouse desk outfits turn lessons into pleasure. They play with Mickey Mouse velocipedes (tricycles), footballs, baseballs, bounce-balls, bats, catching gloves, doll houses, doll dishes, tops, blocks, drums, puzzles, games, paint sets, sewing sets, drawing sets, stamping sets, jack sets, bubble sets, pull toys, push toys, animated toys, tents, camp stools, sand pails, masks, blackboards and balloons - until day is done, when they sup from Mickey Mouse cups, porringers (bowls), and baby plates and lie down to sleep in Mickey Mouse pajamas between Mickey Mouse crib sheets, to waken in the morning smiling at Mickey Mouse pictures on the nursery walls covered with Mickey Mouse wallpaper."[1]
Sounds a bit like our modern Disney Store, doesn't it? But in the 1930's, licensing programs of this scope were unknown. Mickey's sales were a revelation.
The public hunger for Mickey Mouse novelties expanded to include The Three Little Pigs as the film swept a depression-plagued nation. Donald, Goofy and Pluto soon followed. When Snow White and the Seven Dwarfs was released in 1937, characters from full-length theatrical films entered readily into the merchandising arena and the rest, as they say, is history.
Walt Disney's boutique movie studio was not initially in the business of making and selling merchandise, everything was done through licenses to manufacturers, marketers and retailers worldwide. It wasn't until the opening of Disneyland in 1955 that the Disney Company would start to operate their own retail stores.
The stores that were created for the theme park hosted a combination of Disney concessions and "outside" retailers. As such, the Disneyland outlets sold product that featured the Disney characters from motion pictures and television shows, but also provided unique non-character merchandise tied to the various themed areas of Disneyland. In Frontierland, for example, there was the Pendleton Woolen Mills Dry Goods Store which sold Western clothing and an Indian Trading Post that sold Native American arts and crafts. The Adventureland Outpost sold replicas of African, Asian, Middle Eastern and South American art, and the One of a Kind Shop in New Orleans Square sold authentic antiques. There was the Candle Shop on Main Street, along with a Wurlitzer Organ Store, an apothecary and even The Wizard of Bras. At Disneyland there were always outlets that featured unique items one could purchase nowhere else.[2]
These original concessions co-existed happily with the Disney-licensed merchandise. The arrangement offered Disneyland guests the freedom of choice in purchasing their souvenirs. There was something for everybody of every age. No guest was pressured into buying specific items. The Disney idea was that - if you loved the experience, the characters, the locations, or just the exotic theme, you might want to take a memory home with you. It was a successful formula. The synergy of the theme parks and retail outlets were forever established.
Also in the 50s, Disney consumer products hit the jackpot with Davy Crockett, The Mickey Mouse Club and Zorro, when baby boomer fads drove the sales of coonskin caps, mouse ears and masks to near atomic levels.
As Disney further expanded their Empire in the 50s, they would come to make and distribute their own records on the Disneyland/Buena Vista label. Like television, the recordings helped to promote new properties and perpetuate older characters to new generations. As Annette crossed over from child star to teen queen, she took her vast TV audience along with her via rock & roll hits on the Disney label.
By the 60s the Disneys had a successful formula down pat. New characters and reissued favorites would be rolled out with great fanfare to accompany theatrical releases via long-term licensees such as Golden Books, Whitman, Aladdin and Parker Bros. Through an exclusive deal with Sears, Winnie-the-Pooh began his Disney merchandising career in the mid-60s, while a nostalgic revival of 30's era Mickey Mouse merchandise in the 70s brought the "Disneyana" tale full-circle.
The characters themselves have always been at the core of Disney's merchandising success. That meant keeping a consistent portrayal of specific personality traits, art styles, attitudes and themes, avoiding the trendy in favor of the true-to-character. It is these qualities that built the lovable and lasting friends the public wanted to take home. Sears Pooh merchandise, for example, was carefully controlled in tone and type of product to reflect the cuddly, winsome qualities of the A.A. Milne originals. This would not always be the case...
By the 80s, Disney merchandising and licensing had slowed into a familiar routine largely aimed at the youngest of kids. It was the surprise demand for Tyco's Little Mermaid doll that hinted of a major turnaround. So too, the explosion of animation art collectibles, cels and limited edition collectibles pointed to new high-end opportunities. But the biggest boost to Disney's consumer products bottom-line was first-ever offering of Walt Disney's classic films on home-video. The film library had always been tightly capped to assure successful theatrical reissues every generation. Consumers were built into a frenzy thinking they might miss out on the release of an animated classic before it went back into the vault.
The Disney Stores opened at the right place at the right time to exploit this growing demand, with a baby boomlet and nostalgic boomer base that would provide a huge wave of consumers to remake the company's fortunes.
With Disney Stores across the United States and in other parts of the world, Disneyana became available on a much wider scale in locations other than the theme parks. Until then, most Disney merchandise (except for certain evergreens) was timed to a film's release or re-release and was rather limited in availability. This always kept the Disney merchandise "special" and the shopping trips to the theme parks exciting. The Disney Stores, in time, changed the ways collectors and the general public related to Disney merchandise that was always available in mass quantity.
With their innovative and balanced offerings to children and adults, fans and families, The Disney Stores enjoyed several years of outstanding success. The Disney Store became a leader in marketing and merchandising activity. Greeted by helpful and smiling Cast Members, steeped in the Disney culture of guest service, people in every city where a Disney Store was located were able to sample a bit of Disney magic on their own turf, without a visit to Anaheim or Orlando.
This approach became so successful, in fact, that The Disney Stores soon observed a new neighbor in many of the malls in which they were located. Warner Bros. Stores were popping up in the shadow of every prominent Disney outlet, as serious competition with their own lineup of Warner/Turner/Hanna-Barbera/DCComics character merchandise.
And then it happened. Things began to change for the Walt Disney Company in 1994 after the passing of Frank Wells, whom many Cast Members fondly remember as the individual who maintained balance in the Disney echelon. Driven by strategic planners who wanted to change the company's direction, and by a demand for 20% growth at all costs, the company fell under the spell of MBA retailing wonders who instigated a downward spiral that continues to this day.
The Stores began to "maximize" sales per square foot. Since the popularity of Winnie-the-Pooh had exploded (by design of marketers), it was assumed that the more Pooh they offered, the more they would sell. This worked in the short term. Pooh began to push all of the other characters, including Mickey, off the rack. Increasingly, all the merchandise started to look alike, with the same character poses and little of the product freshness and originality of the early years.
To drive profits, lower cost manufacturers and materials were sought, creating cheaper look-alike lines of color-coded "brands." The items were now often the same low-cost templated products in a few different character flavors geared to specific demographics. Only the logos and pictures would change. Quality suffered. The marketing message was thought to be more important than the item for sale.
To achieve their financial goals, top management began to ignore the needs and recommendations of The Disney Stores Cast Members and most importantly, the needs and desires of the Public.
With the arrival of Disney Store retailer Paul Pressler to Disneyland, it was decided that theme parks were really one big mall. It was the stores that were important, not the rides or experiences. And to maximize sales, buyers would apply the same theories used to push Pooh and plush at The Disney Stores. They would mass market across all of the parks only the most popular products, or those most likely to turn over quickly. One by one, unique retail concessions at the parks were eliminated. The public no longer had a choice: guests were to purchase Disney items or none at all. The retail concessions in every theme park land were to sell the same merchandise: and nothing else. For a time, even the unique logos of the various parks were nearly phased out in favor of a generic corporate "Disney" logo. After all, there were cost-savings in bulk manufacturing. Many items that appealed to adults were eliminated to concentrate on children's items. Only the most heavily marketed characters would be used now, as many Disney fan favorites became has-beens in their own kingdom.
At the Disney park and stores, balance was out and saturation was in.
The reign of the Princess began... Once unique and individual characters, the heroines of Disney's animated features were grouped together in a marketing sorority "brand" to rival Barbie and her desirable demographics. While sales were impressive, the characters began to suffer a sameness and lack of personality with the flavorless corporate marketing blitz, as had Mickey and Pooh before them. Snow White was put on a diet, no longer the company's corn-fed leading lady with the unique soprano, but simply "the dark-haired one" amongst the other Stepford Princesses. Same smile, same poses, in a group, all the time.
Other characters followed down this path as their fates were cast by marketers unfamiliar with (and uninterested in) cartoons and subtleties of personality. Milne's "gloomy ol' Eeyore" was suddenly a smiling softie! ...Prozac in the 100 Acre Wood?
Product artwork also suffered the trends, with an entire Animation Research Library of expressive character drawings from the Nine Old Men going ignored for sometimes tacky new poses, often drawn "off-model" by underpaid and overworked freelancers.
Kay Kamen where are you?
Outside of the Pooh and Princess parade, it became known to Disney collectors that the last place to look for items related to the Walt Disney era was at the Disney Store! But why look for Disney videos and CDs at a Disney Store when they were cheaper at Best Buy, Target or Amazon.com anyway? And the high-end Disney Gallery collectibles had long since vanished from the chain.
The Disney Stores experienced the same dire situations in outlets around the world: Cast Member hours were cut back but duties expanded, wages remained low, and job security declined. Throughout the chain, on orders from management, the hard-sell of lower quality items and pre-order schemes escalated, and customer service was drastically cut back, leaving the front line Cast Members to deal with an increasingly dissatisfied public.
Worse yet, a seemingly endless series of divisional management changes and schemes to "fix" declining sales have left the stores with a lack of focus and purpose. Plans to divide the operations into lifestyle dependent Disney Stores (DisneyHome and DisneyPlay) were abandoned before they began, even as a half-baked redecorating initiative changed many Disney Stores from delightful three-dimensional character themes to Gap-like cardboard postmodern displays of the lowest cost.
Increasingly, the Stores have resembled clearance centers with even new character merchandise marked-down to half-price while a movie is still in theatres! What this does to the perceived value of Disney's properties is incalculable.
No, this gloom and doom is not mere conjecture on our part. We've heard it all from those who know best: the dedicated and hard-working Cast Members of the Disney Stores, whose job security is now threatened by rumors of closure or sell-out. Here are only a few of the many letters that have been sent to us that underscore the point:
"We are a dedicated bunch who love Disney and have stuck it out at the stores even though the powers that be have deemed it in the best interest to take away many of the products that guests would come to us for. Not only has great product been taken away from us, but all of the little things that were once given to the cast as tokens of appreciation, have been taken away as well. Morale as a whole is low and the focus has shifted from guest service and entertainment to selling anything and everything to every guest that walks through the door. How things have changed in 8 years!"
Another soon-to-be Former Cast Member writes: "Last year, the cast of the Disney Store division was told that we would be put up for sale. This was devastating news to us. Since then, there have been numerous rumors and no information from anyone in our division in a place to give honest answers. At the meeting in Philadelphia, presidents and division heads of all areas of the Walt Disney Company and subsidiaries were paraded out to give their state of affairs reports about their respective divisions. It was painfully obvious that not one representative from the store division was present to speak about our challenges for the future."
A Former Cast Member from Colorado says it all: "When I was a Cast Member in the early 1990s, the Disney Stores had such a wonderful selection of Disney merchandise. The stores were clean, fun and the Cast Members were taught Guest Service in the Disney Tradition. There was something to interest everyone that came into the store, from infants to 95 year olds!
"Shortly after the death of Frank Wells, I noticed changes. The Cast Members were strongly encouraged to participate in 'suggestive selling.' i.e. push the merchandise! Before this policy, the guests were buying more merchandise without being pressured. The great selection of merchandise and "Disney magic" did the selling. Once the guests were being "suggested" into buying more merchandise, it ceased to be enjoyable for them.
"The stores formerly had adult apparel that sold quite well. In about 1993 the adult apparel started to disappear. Guests requested adult apparel all the time, but the pleas fell on deaf ears. Now almost all collectibles are gone from the very few remaining stores. No Walt Disney Classics Collection. Hardly any watches. Very little adult apparel is available. No cells or framed artwork. There are very little video and audio products.
"For the past 5 years or so, all the stores had was: Pooh, Pooh, Pooh, Princess, toddler and infant apparel. In the early years the stores had something for nearly everyone of every age. Now unless you have a young girl, toddler or infant, there is very little to interest anyone. The stores have very little Mickey, Minnie, Donald Duck and Goofy merchandise. A die-hard Disneyphile can now walk into the stores and find nothing that interests them.
"The stores are now in poor repair and are no longer 'Disney clean.' The morale in the few remaining stores couldn't be worse! The Cast Members used to love their jobs and the enthusiasm was obvious to guests. Now there are a lot of sad faces in the stores.
"Eisner blames the store closings on a "changing market." He says the Wal-Marts have taken over the Disney Store sector of the business. This couldn't be any farther from the truth. The Eisner team purposely killed the Disney Stores!"
Cast Members are especially vulnerable to the tactics of today's top management in many personal ways: "As a Cast Member of the Disney Store, one of the reasons why I joined was a sense of belonging to the Disney Company and the benefits of being a Cast Member. Over the past year, more and more advantages of being a Cast Member have been removed, and being a part-time Cast Member you don't look at the pay scale, you looked at being part of Disney, and being part of the Disney Family.
"Now, with the possibility of The Disney Stores being sold (which I hope does not happen), the benefits that we had as Disney Cast Members are being reduced. We use to get into the Parks for free, (that's now) gone, we used to get discounts at Disney Quest; we used to get a solid discount (50%) off our hotel rooms, now it's at 25%, we used to get in the water parks at a reduced rate, (all of those benefits are) gone. I feel if the Disney Stores are sold, there will be a mass exit of some very good people, which is a shame because the Disney Store I come from is doing very well and there are many good and hard working people there, that love to work for Disney. But we are being pushed aside, forgotten about, we are treated like Cinderella by her Step-sisters and Stepmother. Is that what the Disney Stores and the employees (have) become, the ugly step child? I hope Corporate will review its plans on the selling of the Disney Stores, and review the benefit package of being a Disney employee, it's not about pay scale it's about being recognized as a contributing element of the Disney Company and being treated as that Cast Member."
Throughout the chain of Disney Stores, rumors of closure abound: "I am a long time Disney fanatic and have just started to work in the Disney Stores just about 6 months ago. I knew wholeheartedly that I was gonna be the best Cast Member anyone had ever met but have had more on my mind than the guest, who should come first. Recently everyone has been speculating that the stores will be closed or sold to the next high bidder to get in on a piece of the magic. Not only do I worry about my job but the only thing I hear from upper management is that everything is fine and to not worry about anything. Disney shelters its Cast Members so much from knowing what might happen, that I haven't even started to look for a new job if something might happen to the stores. My first love in life has been Disney and by the way that they conduct business now, I see how the new Corporate Disney smacks around its cast and doesn't entrust any information to them. Soon people start rumors which have now been placed into the mass media. I know that many people are worried about their jobs within this company but if the stores are to close it will displace almost 4,000 people if not more."
Even Cast Members in Europe are experiencing Eisnerian directives: "I work as a manager with the Disney Store. At the moment I'm being bullied out of my position because I focus too much on bringing Magic to guests and Cast and too little on hard sales techniques! I know Walt would be upset to know that his Cast is forced to behave in a manner which doesn't match the true, important values of the company which made it so successful in the first place!
"I have seen the Magic be stripped away at the Disney stores in an effort to make stores more commercial but instead they are losing the magic that has made them less successful! Maybe if Senior Management listened to the Cast who deal with guests on a daily basis they would have known that stripping out the Magic was not going to work!
"Anyway I felt it was important for you to know that as I face incredible pressures at work, I am being bullied to the point (that) it's making me sick! I cannot believe that people above me work for Disney! They use foul language and dirty techniques and if you don't agree with them then that's it! You're doomed to be 'managed out'! However, I feel the True Magic of Disney will help me get through this! I am reminded of Walt's saying 'all the adversity I've faced in my life only makes me stronger!' So I hope that if I can survive this assault on me by my senior managers it can only make me a better manager for the future! A future that I hope will still be with the Walt Disney Company! I believe in the balance of MAGIC and good long term business sense! Making a cheap buck is not an option!" This last letter is signed by "an unhappy, bullied Cast Member who is working hard and trying to stay positive to the keep the MAGIC strong" in his European Country. We can only hope that all of the Disney Stores Cast Members may be able to have such a positive outlook for the future.
The public is also very astute. They know when things are awry. Here are only a few thoughts from Guests who have written in with their concerns for the Disney Stores, or have posted on the web:
"I have wanted to have my say for years re: the Eisner Empire Disaster. I am a huge Disney fan but it has run amok and it has now had its day. I think the Disney stores are a bust-again, mass production, marketing (that) makes going to the magical land of Disney anti-climactic."
"The problem here is originality. TDS specifically has gone from an innovative retail leader and an extension of the parks to a store that is struggling to keep up with industry trends VS. creating them."
"I used to enjoy walking into the Disney Store and looking around at all the collectibles and what not. Now I don't want to even step in there. It's nothing more than a bunch of three year olds running around wanting to get the latest Disney toy from the latest Disney sequel."
The closing of many local Disney Stores around the world began to occur in 1999 and has been escalating ever since. Sales have been dropping at the Disney Stores over the years and maintenance has been sacrificed, along with quality of merchandise. The Executive Team of the Walt Disney Company blames progressive failure of the Disney Stores on the economy, the changing tastes of the public, and even 9/11! There's an interesting expression that reads like this: "Always remember that when you point your finger at someone else, there are three other fingers pointing right back at you!" It's certainly not the changing tastes of the public that has been responsible for failure of the Disney Stores as Executive Management claims. Disney characters are as beloved around the world as they have ever been. Perhaps it's the "three fingers" pointing back to the Executive Management Team that is truly responsible. In other words, perhaps it's their own actions regarding the elimination of product for all ages, the saturation of poor quality merchandise and conducting business on the cheap that is responsible for the plight of the Disney Stores as it stands now.
When the Warner Stores overmarketed the Looney Tunes characters and eliminated merchandise that would be of interest to all age brackets, the formula didn't work and the Warner Stores were closed by fall of 2001. They still maintain an on-line shopping capability, but the local stores are gone. At least the executives of the Warner Company took responsibility for implementing a failing formula. The Disney solution: sell the chain and make it somebody else's problem, as certain executives at the Walt Disney Company have suggested.
Consumers aren't stupid. They know quality merchandise when they see it. It isn't difficult to become angry and put off when the seams of garments pull apart in only a couple of weeks, or when toys easily break, or when the appearance of merchandise is just plain tacky.
Cutting back maintenance so that Disney Stores look like clearance warehouses, or cutting back Cast Member hours so that they barely earn a livable wage, or resorting to doubling and tripling Cast Member duties in limited time frames and issuing orders to conduct the "hard sell" are not ways in which to create a "magical" environment, for Cast or consumer. If it were not for the dedication of the Disney Stores Cast Members to carry out the friendly, helpful and welcoming attributes of the Disney Legacy, the Disney Stores would have foundered long ago. Rather than treat their Cast Members like feudal serfs, it would be best for the Executive Management Team of the Disney Stores to learn from their Cast Members. Cast Member service and experience has been a keystone of the Disney Stores operation.
In the winter of 2003, rumors began to fly that the Disney Stores may be sold to Wal-Mart (or a host of other chains) in the United States and that the European Disney Stores may also be sold. Japan's Disney Stores have already been sold to Oriental Land Company, owners of Tokyo Disneyland and DisneySea. Australia's Disney Stores have been closed altogether!
The Eisner board of Directors has thrown up a smoke screen to their methods of conducting Disney Store business. When asked about the fate of the Disney Stores during the 2nd Quarter Conference Call that was broadcast on the Disney Investors website on Wednesday, May 12, 2004, Michael Eisner vaguely stated that "We (The Walt Disney Company) are still on track to consider selling the stores. We haven't changed our position. We are still pursuing discussion on the subject."
When pressed for an answer from the Board, Disney Stores Managers, Cast Members, Shareholders and Consumers alike receive only silence and speculation. What is The Board of Directors' position? What are they discussing? As far as the Board is concerned, it's just "business as usual." The trouble is that no-one except the Board of Directors knows what the usual business is.
It's hard to be The Disney Store when the business is no longer "Disney."
[1] ibid. - pp110-111.
[2] To read about these long-closed shops and other Disneyland attractions, log onto Yesterland.com, a website that is dedicated to the sites and sounds of yesterday at the Disney Theme parks. You may find it in our links section.
Great article, sad but very true!!!
