Walt Disney Co. is rethinking the way the way it approaches retail, both online and in its stores.
Online, the retailer is remaking its e-commerce site with a new URL, shopDisney.com. The site more than doubles the amount of merchandise it sells online, with a big increase in licensed items aimed at adults such as Coach handbags, Ethan Allen furniture and David Lerner women’s clothing, as well items that it previously only sold at its theme parks.
The new site includes videos of the products and more items displayed according to themes, such as Halloween costumes. Merchandise that sells well online will be brought into the stores, says Paul Gainer, the executive in charge of Disney’s stores division. The Disney store is No. 118 in the Internet Retailer 2017 Top 500.
The site aims to offer shoppers the online experience consumers expect, said Michael White, senior vice president and chief technology officer of Disney consumer products and interactive media, today at the Shop.org conference in Los Angeles.
“Guests expect Disney to offer an e-commerce channel that extends beyond just Disney products,” he said. “They want licensed products, they want the products that are available at our theme parks.”
At the same time, Disney is also testing new Disney store designs that are designed to win back shoppers with interactive birthday greetings and events streamed from its famous theme parks.
Since July, the Burbank, Calif.-based company has unveiled four of the six planned stores with the new look, which includes a giant video screen in the front. Guests celebrating a birthday can have Donald Duck and friends sing to them, with their photo featured on the screen. Those showing up in the afternoon can sit on seat cushions and watch a live feed of Disneyland’s daily parade down Main Street. “It’s not unusual to see 80 people gathered around the screen to watch a parade,” White said. The retailers to have store associates wheel up a cart where customers can buy cotton candy and mouse ears, just like those sold at the parks.
Disney, the world’s largest entertainment company, has had its interest in retailing ebb and flow over the years. The company once sold and then bought back its stores division. Today, the company has about 340 retail locations around the world, about a third of their peak.
Lower foot traffic at malls and a flight to online shopping has hurt Disney like it has other retailers. Sales in Disney’s retail unit fell 6% to $1.71 billion in the fiscal year that ended in October 2016 and 10%, to $1.21 billion, in the nine months of 2017. The company also hasn’t had a movie in a while that inspired the same level of shopping frenzy as “Frozen” and “Star Wars: The Force Awakens” did.
The company began working on the store redesign about 16 months ago. The last major remodeling, which included a small castle and sections designed for specific brands such as princesses, was in 2010. The company doesn’t have plans to increase its overall store count, but should the redesign deliver increased revenue, more locations will get the new look, Gainer says.
Artificial intelligence and machine are powering many of the changes Disney is making online and offline, White said. For instance, artificial intelligence is helping the retailer organize the SKUs on the site into categories.
“AI has the promise to transform retail,” he said, pointing to three key areas where the technology can help retailers:
- Natural language processing
- Text to speed synthesis
- Image recognition
Disney believes that artificial intelligence and machine learning can bolster its online merchandising strategy by helping enhance “discoverability,” White said.
“We’re using machine learning to make connections,” he said. That is, to understand what a particular consumer, or type of consumer might be interested in based on his actions.
Bloomberg contributed to this story.