Once synonymous with creating a magical experience for young and old all around the world, Disney has now begun closing 60 of its stores in the US and Canada as it shifts its focus to e-commerce. “Over the past few years, we’ve been focused on meeting consumers where they are already spending their time, such as the expansion of Disney store shop-in-shops around the world,” said Stephanie Young, president of Disney’s Consumer Products Games and Publishing. “We now plan to create
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reate a more flexible, interconnected e-commerce experience that gives consumers easy access to unique, high-quality products across all our franchises.”
However, retail expert Danny Lattouf, chief strategy officer at The General Store, believes that Disney’s stores may have lost their way over the years, leading to their eventual closure.
“Disney stores were originally brought to market to bring the magic of the cinematic Disney experience into tangible interactions with its fans (who couldn’t get to Disneyland). They were originally designed to be high-touch, magical places that just so happened to sell products. As they rolled out, they got more cookie-cutter and less magical – more retail channel and less tangible brand experiences,” Lattouf explained.
“With the magic removed and channels being somewhat interchangeable now, it doesn’t surprise me to see Disney make a decision to focus their channel efforts online. What will be interesting to see is how Disney plans on engaging audiences in the ‘middle’ – with online at one end and Disneyland on the other – perhaps more flagship stores with unique experiences and services on offer?”
Disney, which previously had 330 stores worldwide prior to the closures, has not provided financial details on how the closures will impact its results.
In February, the Walt Disney Company posted a 73 per cent increase to US$3.5 billion in direct-to-consumer business revenue compared to the previous corresponding period, while the company’s parks, experiences, and products segment saw a 53 per cent drop to $3.58 billion with many of its theme parks either closed or operating at reduced capacity.
According to the brand, the retail business in APAC will remain unchanged.
A good move for Disney?
As consumers are now spending more time online, it is no surprise that Disney is investing more into its e-commerce experience, said Trent Rigby, senior strategy officer at consultancy Retail Oasis.
“It makes sense from a consumer experience point of view for Disney to continue its focus on building out it’s e-commerce strategy in a post-Covid retail environment,” he said. “I think it is a good move for Disney. Consumers are still shopping Disney, but they are now purchasing online.”
According to Rigby, while Disney had already been reducing its physical retail footprint for a number of years, the impact of Covid-19 just accelerated its store closures.
“This has been part of an overall strategy by Disney to grow their e-commerce platform and increase their focus on ‘store within store’ model,” Rigby explained. “The impact of Covid on the global retail landscape has likely accelerated this trend and I believe this was the largest group of store closures they’ve ever done in their history.”
Disney announced that over the next year, it will focus on its website revamp by providing a more seamless, personalised and franchise-focused e-commerce experience through its online ShopDisney platform, which will be integrated with its Disney Parks apps and social media platforms.
The company also said it will increase its product assortment to include more adult apparel collections, streetwear, premium home products and collectibles.
While most of the company’s physical stores tend to display mostly a selection of children’s apparel, toys, and games, online Disney aims to cater to a wider demographic with its expanded offerings.
Disney said its other shopping experiences, which include more than 600 Disney Parks stores, shop-in-shop locations, as well as third-party retailers around the world, will not be impacted.
