Disney has once again tried to overhaul its retail strategy. The New York Times reports today that Disney has opened a new prototype store in California. Reporter Brooks Barnes explains the changes in the store format:
Quietly, like a mouse on tiptoe, Disney overhauled its retail store at the Northridge Fashion Center mall in late July. Out went the twisty Pixie Path aisles, the ornate displays, the green walls and the color-changing fiberglass trees. In came a movie-theater-size screen, a simplified floor plan, white walls and more items for fashion-conscious adults... The redesign makes Disney’s stores a bit more like Disney’s theme parks. For instance, daily parades at Disneyland in California and Walt Disney World in Florida will be streamed live to those colossal video screens. During the parades, store personnel will put out mats for shoppers to sit on and roll out souvenir carts stocked with cotton candy and light-up Mickey Mouse ears.
Of course, Disney tried to overhaul its retail stores seven years ago. Now they are trying again to reshape their retail strategy in the face of intense competition from online retailers, as well as major players such as Target and Wal-Mart. As with the prior revamp, I think Disney has to ask itself two fundamental questions:
1. Do the stores represent a sufficient experience that justifies customers making a special trip to the store, as opposed to buying elsewhere? Does that experience enhance customer's willingness to pay for its products? If they can't answer yes to those two questions, then they should reconsider this vertical integration strategy.
2. Should Disney have 300+ stores across the country, mostly in shopping malls? Or, should Disney consider slimming down the store count considerably, and opting for a "flagship store" strategy in major cities around the world?