Disney’s response to digital disruption in retail

Disney StoreThere’s more to Disney’s retail operations than selling Star Wars and Frozen merchandise.  

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Speaking at the NRF Big Show in New York last month, Paul Gainer, executive vice president, Disney Retail, said retail strategies must focus on great consumer experience.

A few years ago, retailers developing a strategic plan to meet the future needs of consumers would address how consumers are connecting with a brand via bricks and mortar, e-commerce, social and mobile.

“What these now have become is not really a strategy but a minimum barrier of entry, it’s the minimum expectation that consumers have to connect with our brands,” Gainer said.  

“Omnichannel [and] seamless channel is a great concept but it’s really only one part of what we are looking to do to meet the needs to the future consumer.”

To cope with the changing retail landscape, Disney has made structural changes, consolidating Disney-owned and operated stores (both e-commerce and bricks and mortar) into one division, with a focus on consumer service.   

With product lines and retail experiences stemming from Walt Disney Studio content, Disney is the world’s largest licensee with more than $45 billion in global retail sales, 340 company stores worldwide and e-commerce sites in 11 countries.  

As well as structural changes, adapting to changing consumer expectations required training sales associates, which Disney calls “cast members”, to think differently, Gainer said.

“A few years ago we had store managers that looked at our e-commerce business as a competitor, that maybe it was taking sales out of their stores if they were out of stock on an item,” Gainer said.

To overcome this, Gainer recommends introducing incentives for staff to encourage them to direct customers online. He said Disney spends a “fair amount of time” on training and development of store staff to make them “true brand ambassadors”.

Over half of Disney’s store associates are millennials, which has also shaped staff training programs.

“I believe that retailers that are investing in their people, that are really backing it up through development programs and building the right culture in their stores are rewarded because ultimately they’re making that experience for their guests better.”  

Mobile – the bigger picture
Gainer said more than half of Disney’s traffic and a quarter of sales are been generated on mobile, but mobile devices are more than a sales channel.

“We know that over two-thirds of those using mobile devices have made a recent purchase in our brick and mortar location,” Gainer said. And over a third of them have made a purchase in our e-commerce locations.

“They are using mobile in a variety of different ways. At Disney stores about 90 per cent of the merchandise we sell is exclusive, so they’re not price shopping, they’re not showrooming, but they are looking for user ratings, they are looking for an extended assortment of that character or franchise that they love, they are looking for instore events and experiences that they can be part of at their neighbourhood location.

“We see the way they are using mobile as part of the purchase path.”

Another key e-commerce strategy Disney has deployed is offering and expanded product assortment expansion online. For example, Disney.com sells more than 2000 items which are exclusive to Disney theme parks.

Gainer also addressed personalisation in retail, arguing data has to pass the “so what?” test.

“You’ve got the data, you’ve got the learnings of the consumer, how are you going to apply that with the sole goal of making that consumer experience and connection with your brand great?”

“All the financial metrics typically will follow if you deliver a quality experience,” Gainer said.

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