Disney Store Redux: Retailers Must Use Their Imagination

Walt Disney's multimedia plan to reinvent its retail stores is being driven by six words that can jump start a lagging economy: It is time to take risks.
That is the rationale for Disney transforming its 340 retail stores into "Imagination Parks" where interactive entertainment, recreation and commerce create an experience more like its theme parks than shopping. "The world does not need another place to sell Disney merchandise -- this only works if it's an experience," Jim Fielding, president of Walt Disney Stores Worldwide, told the NYT.

The makeover blueprint, which is a whole lot more than redecorating, draws on all of Disney's corporate resources, including some past experimentation. It is reminiscent of the company's short-lived high-tech DisneyQuest indoor theme parks. It will tap the brain trust of its elite Imagineering unit for innovation and creative development.

Disney will integrate some of the video game techniques it has developed for its web sites and theme parks. An example is Sum of All Thrills, a new pastime created with Raytheon for Disney's Epcot center in Orlando, FL, that allows children to design their own theme park ride using computer math tools and then try out the ride in a robotic simulator.
The anticipated $340 million investment over five years also could represent a closer collaboration with Apple, whose CEO Steve Jobs became a Disney board member after merging his Pixar Animation has into the Disney's film stable. Jobs has provided some input into Disney's new store plans.

Apple's track record understanding and capitalizing on new consumer behavior has made its stores a hangout for the Mac and iPhone faithful that generated more than $6 billion in revenues last year, or more than twice the sales of its virtual iTunes and App stores. The Apple Store, which aims to sell experiences, not products, is the template for Microsoft's new retail stores.

Any level of collaboration with Apple would enhance Disney's retail renewal and efforts to gradually revive consumer spending. In fiscal 2009, Disney's consumer products is expected to generate $611 million in earnings (earnings before interest, taxes, depreciation and amortization) on $2.4 billion in flat revenues. Only about $400 million of sales is generated by the Disney stores. Disney CEO Bob Iger says the new store features will go beyond selling consumer goods to reinforcing all of the company's core businesses.
If successful, the new Imagination Parks could inspire sweeping transformation of brick-and-mortar retail as digital activity continues to grip all aspects of life and business. A number of research reports this year suggest traditional retailers are failing to keep pace with consumer behavior, leaving online retailers such as Amazon to dominate search listings. Disney is trying to bridge that gap.

After selling its stores in 2004 to The Children's Place, only to buy them back in 2008, Disney opted to use the outlets to showcase its brand franchises (like its Princesses and Cars) and characters (from Winnie the Pooh to Mickey Mouse). Its pending acquisition of Marvel Entertainment will add scores of animated superheroes to the mix.

After filling up on Disney, Pixar and Marvel film clips, recreational and other self-guided interactive activities -- including virtual visits with animated characters -- consumers will be able to buy or use in-store kiosks to order Disney products including cruise line and DisneyWorld packages.

Computer chips embedded in products, satellite supported presentations and the ambitious use of other technology such as Wi-Fi also will contribute to a multi-faceted experience that will make Disney synonymous with having a good time whether it's a film or television program, a theme park ride or toy.
It looks to me that the only factor missing from Disney's announcement -- but, perhaps not from its overall plan details -- is the ability to create a digital shopping fingerprint for even the youngest consumer. Such a profile of preferences and demographics, developed with customer consent, would allow Disney to personalize the virtual shopping experience on so many levels.

For instance, entering a code or name into a computer model at the store would trigger a variety of activity. Customers of all ages would be directed to new products and recreational activities matching their personal profile. The same personal data could be retrieved and applied to Disney's online shopping and interactive web sites where consumers would be steered to products and activities tailored to their liking. The stored profile information also would be the basis of an ongoing marketing and research relationship between Disney and its biggest fans.