It seems like every time I have a post in mind for a particular day, something comes along and puts it on the back burner. Today is one of those days. But this news is big. I mean really BIG.
American Girl has announced that they will be selling some of their Truly Me and Wellie Wishers lines in Toys R Us.
Now, before everyone goes all bat-crap crazy about how bad of an idea this is, let me point out a few things here.
- Sales for the company are down
- Not everyone lives near an American Girl Store
- They aren’t going to be available in every Toys R Us store
Sales for the 2nd quarter of 2016 fell 19% from the previous year, same quarter, for American Girl. That’s a huge drop. I’m not sure what the exact cause was, but that is something to be concerned about. And definitely something needed to be done as this was not a new issue, but one that was getting bigger.
The American Girl stores are a fun idea. But has anyone ever sat down and thought about how much it costs to run one of those stores? Everyone has something to say about how the prices keep going up and up and up on the merchandise while the quality has either stagnated or gone down. Blame it on the AG stores. Overhead on those is enormous! From the rent they pay, to the utilities, to the workforce, I quite honestly don’t know how they are making very much at all. There are only 2 days a week that the store is super busy. I’ve been in the Columbus store twice during the week and it’s like a ghost town. I suspect that many of the other stores have a similar situation. It costs big bucks to have a presence in a shopping mall and where these stores are at are generally high-end locations where rents are through the roof. I have my doubts as to whether or not we will see very many (if any) new AG stores open in the near future. And if we do, they are also going to be in high traffic, destination areas like the ones already there.
Then there is the whole issue of there only being stores in certain areas. Where I am at, it’s a 3 hour drive to the closest store. It’s about to get down to an hour with the opening of a seasonal store in the Pittsburgh area, but it’s still an hour away and not permanent. I know people who live even further away from one. And there is still a certain percentage of the population that won’t shop for something online. Did you know that 75% of ALL toy sales are done in a retail store and not online? I thought that was an interesting fact. Which means that there is a large percentage of the population who hasn’t even set eyes on an American Girl doll, let alone bought one.
Competition in the toy market is huge, always has been. Now it’s even fiercer with other things like video games and the internet taking up kids time and interests. In order to stay competitive, toy companies have to always be on the lookout for a newer, better way to market their goods. And where better than the nations largest toy chain??? I’d rather that they end up there than in Walmart or Target. From what I have read, AG will still have a lot of control as to how it goes and what happens.
Right now Disney is AG’s biggest competitor in the doll segment. With the release of the movie “Frozen”, AG literally found themselves frozen (pardon the pun) out of the doll market. Every little girl wanted their own Elsa or Anna. Or did they??? Perhaps that’s what they bought because another choice that they would have liked wasn’t available where they were. Picture this scenario: grandma tells her granddaughter that she will take her to the Toys R Us near them, and she can pick out whatever she wants. Kids live in the moment. They don’t think about the “what if’s” or “could I”. So they get what they can see, what is tangible in front of them. And if that doll isn’t there in front of them where they can see it, they get what is. In the words of Veruca Salt: “I want it NNOOOOWWWW!” We live in an instant gratification world these days and if left to the choice of “buy this now” or “we can order this instead”, they are going with option number 1. Or worse yet, they decide to buy a video game. Eeeeek!!
I saw where someone actually said in a comment on another blog that having to order an American Girl doll or go to the store is what makes it special. HUH?!?!? What kind of elitist hogwash is that? What makes American Girl special is the stories, the books, the accessories. If you are buying an AG doll for you or a little girl because you have brand/ego issues, perhaps you need to be spending that money on a good shrink! I’m amazed at how many people seem to forget that these are toys. Intended for children. They are very well done, but at the end of the day, they are still dolls, made for little girls, originally as a learning tool. They weren’t supposed to be the Louis Vuitton of dolls.
One concern that does come up fairly often is “will this affect the quality”. It could. However, that ship quite frankly has already sailed. When Mattel partnered with Pleasant Company there was almost an immediately change in the product quality. There has been a steady decline, but overall the product is still a good product. Honestly, I don’t foresee this as an issue any time soon, and hopefully never. Recent releases tell me that they are spending a decent amount of time on producing a quality product. I just wish they’d spend that much time on research for the BeForever line, but that’s another story for another time! Two high end brands that come immediately to mind for comparison are Lego and Calico Critters (also known as Sylvanian Families outside of the US). Both take up a considerable amount of floor space in Toys R Us and no one would accuse either of those lines of making a poor quality product. Lego has been sold in Toys R Us for at least 25 years, long before they ever built LEGOLAND or started opening stores.
One comment that makes me laugh is “Wellie Wishers must not be doing well for them to do this”. Obviously this person knows NOTHING about retail. Wellie Wishers just came out in the spring. The third quarter for sales just ended, so numbers are just now coming in. I’m sure this deal with Toys R Us has been in the works for a fair amount of time, perhaps as long as a couple of years. From what I’ve been reading, this is going to be a niche kind of area within the stores, and it’s going to be in less than 100 stores. That’s less than 12% of all Toys R Us stores in the United States. This wasn’t a “here, sell our stuff in every store!” kind of deal, it sounds as though a lot of thought and planning went into it. And I’m sure a lot of legal wrangling. That all takes time, and competition for floor space in any retail store is in high demand. This actually could have been in the works for a very long time, but just a matter of waiting for another line to either go under or a contract to run out. This sort of thing goes on all the time in retail, but it doesn’t happen overnight.
Personally, I think this is one of the better moves that American Girl has made in recent years. Brand recognition is everything and creating additional awareness of the brand can only help. By putting the dolls in a large retail chain like Toys R Us creates that environment, but under strict controls. If it doesn’t work out, they simply don’t renew the contract when it ends. But in the meantime, the exposure they get would be beneficial. As that saying goes “there is no such thing as bad publicity.” I suspect that is how they are looking at it right now. With sales going down, what do they have to lose?
There are quite a few benefits too for those who already shop at Toys R Us. Right off the bat, you aren’t going to be paying for shipping. Perhaps you need a birthday gift in a hurry for that AG crazy little girl in your family, problem solved. If you happen to be a member of the Toys R Us rewards program, you will benefit that way too. And if you are like me, you may be more likely to purchase something if you can see it in front of you as opposed to having to view it on a computer screen. The roof over my head is a perfect example of that. On the computer this house didn’t look like what we wanted, but after seeing it on a Saturday, we thought it over on Sunday and by Monday we were contacting the real estate agent because we wanted to make an offer. Had we gone with that computer screen image, we probably would still be house hunting. Having the actual item in front of you gives you the ability to make a better judgment about it. There are still many people out there who think that American Girl products are overpriced and refuse to buy them because they are convinced of that. Yet they haven’t seen them. Putting these items out where more people can see them is a great way to increase interest. And possibly change opinions.
I think this is a step forward for the company and I’m anxious to see how it goes. Maybe we will see even better ideas come along as a result of this. How quickly everyone forgets: American Girl used to have a partnership with QVC! They also have been known to sell things at Zulily, Costco and Sam’s Club as well. Some of the Maryellen items are sold on Amazon. I see nothing wrong with trying to move a brand forward in changing times. It’s either that or possibly go out of business. It happens all the time to companies that don’t try new strategies. Who would have ever thought that a name as big as Kodak would ever hit hard times? I know I don’t want to see that, and I’m sure none of the rest of you do either. But a company cannot continue to lose business at the rate they have and still stay in business. Times change and as a result, business does too. You can’t continue to run a company with a 1980’s mindset when it’s 2016. It’s time to move forward.