From the NRF BIG Show: The Magic of Disney Inside a Retail Space

Led onto the stage by Mickey and Minnie Mouse, there was no mistaking that Stephen Finney was from the Disney Store when he made his entrance to give the keynote speech at this week's National Retail Federation BIG Show in New York City. The senior vice president of global retail operations for the media and entertainment company was there to talk about Disney's brick-and-mortar stores, and in particular, the role technology has played in the transformation of the stores from mere retail spaces to “imagination parks.”

With approximately 400 locations around the world, Disney Store has established an international presence. The opening of its new flagship store in New York's Times Square last November had the feel of a movie premiere to it, not the opening of a retail store. But that's the message Disney Store wants to convey to consumers: that its stores are much more than retail spaces. They're places where events happen, and where consumers interact with media of all types as well as Disney cast members.

But times weren't always so magical for Disney Store. In fact, in the spring of 2008, the Disney Store filed for Chapter 11 bankruptcy protection. It was at that point that the company re-evaluated what it wanted to accomplish with its retail stores. Of course like any other retailer, Disney wanted to make money. But there was something more at work here.

“How do you become the best 30 minutes of a child's day” became the motto for Disney Store. To help answer this question, Disney turned to technology. The company hadn't changed its store design for 20 years — from 1988 to 2008, or as Finney referred to it, “the pink and green design phase,” referencing the overwhelming presence of the two colors in its stores — and it had become stale and dated. The company prioritized a technological investment for its retail stores.

“An investment in specialty retail is daunting,” noted Finney, recalling the early days of the Disney Store's turnaround. “We couldn't afford for each region to operate as an autonomous business unit.”

Technology Advancements Capture Imagination
Disney Store invested in new digital signage for its store windows. The signage is continually updating (the content is downloaded each day), and is relevant to the particular region and store where it will appear. The company's goal going forward is to have personalized digital signage based on facial recognition and RFID technologies, Finney said.

Then there's the “magical trees” that are a fixture in every new Disney Store design. The 10-foot plus high trees display digital signage of high definition Disney videos and animation, which run on a 30-minute loop. Cast members (aka store associates) have the ability to show certain videos depending on shoppers’ requests. Plans are in the work to have shoppers be able to choose the content of the trees via their mobile devices.

A hit with the young girls that shop Disney Store is the princess castle that's positioned at the front of each store. Each castle features Disney's famed “magical mirror,” which allows girls to get a message from their favorite Disney character via the mirror simply by waving a wand in front of the mirror.

There's also a space reserved in each store for a Disney square theater, which is designated to be the center of activity for each store. It's here where children can view Disney videos and interact with Disney characters — and where parents can sit down and relax while their children play. This interactive relationship with its brand is exactly what Disney was striving for when it redesigned its retail stores.

“Technology doesn't interfere with the shopping experience, it deepens the immersive experience,” Finney said.

A Cross-Channel Environment
Disney realized that for these expensive retail models to work — Finney got a laugh from the audience when he said he the stores cost a little more to build out than a traditional retail location — they must be multichannel. Disney Stores carry roughly 1,200 products, while its online store carries 5,000 plus. The company has linked the two channels by making its e-commerce site available in its retail stores and by linking peer reviews to other stores.

Mobile wasn't forgotten in the redesign of the Disney Store. The retailer has partnered with Oracle's retail division to roll out a hand-held point-of-sale (POS) system via iPod Touch technology that allows Disney cast members to complete transactions anywhere in the store. The POS has reduced checkout times and technology costs, while increasing conversion margins.

The transformation of Disney Store is paying dividends. Consider the following:

• store traffic is up 20 percent vs. nonredesigned stores;
• redesigned stores are converting 25 percent higher margin customers vs. nonredesigned stores; and
• 99 percent of guests said they would recommend a Disney Store to their friends.

“Specialty retailers need to differentiate the shopping experience vs. mass retailers or else the results will be tragic,” said Finney. But just like a Disney fairytale, this retail story appears headed for a happy ending.