US News: Magical Merchandising

Bob Vereen investigates American Girl, a brilliant retailing business that has customized a mass-market product and created almost endless add-on sales opportunities…

There probably is no better specialty retailer in America than the American Girl division of giant toy maker, Mattel Inc. American Girl sells dolls and accessories – millions of dollars of them – via catalogue, online, and two (soon to be three) specialty retail stores. It is an amazing story with merchandising and marketing lessons for other retailers to remember and learn from.

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Caption: Separate rooms like this are devoted to merchandise categories, in this case babies for the dolls

American Girl was begun in 1985 by entrepreneur, Pleasant T Rowland, who decided that little girls would love to humanize and personalize their dolls, giving them a personality all their own. Instead of being “just another doll”, an American Girl doll would have a name, a “life” and a history. The business began as a mail order company and became so successful that Mattel, the toy-making giant, took note and bought the company nearly a decade ago. In the decade that Mattel has owned it, the company has opened an American Girl Place retail store just off prestigious Michigan Avenue in Chicago, and in an equally expensive location on Fifth Avenue in Manhattan. A third store will open in Los Angeles early in 2006.

It is in these two stores that merchandising lessons can be learned. Chicago’s American Girl Place is a three-story operation, which defies normal retailing rules. No gondolas or platform mass displays, thank you. Special fixtures abound, including numerous recessed alcoves in which products are nestled and/or showcased. Customers wander around self-standing island fixtures so traffic patterns are varied. Each display room has a cashier so purchases can be made as one browses. Colors are soft pastels, lighting is pleasant, not harsh.AHJUSNews02Dec05

Properly-identified and informative employees circulate to answer questions (and keep an eye out for potential shoplifting).

Caption: Shadow-box treatments like this could be used by other merchants to spotlight items

Signing is used, but lettering is subdued. Signs tell the story of each doll or accessory – where she lives, what era she came from, what kind of clothes she likes, what the accessories do for her, etc. No blasting away about price or features in garish type!

And it is this signage, as much as anything, that helps explain how American Girl has created distinct personalities and given “life” to its dolls. Each doll represents an era or an ethnic group, ranging from America’s pioneer days to modern times. Doll owners, whether little girls or adult women, can dress them individually, outfit them with various kinds of jewellry, give them their own special hair-dos and even dress them to participate in different kinds of sports. Each American Girl doll becomes unique, reflecting its owner’s desires, aspirations and interests.

The American Girl Place store in Chicago even includes a dining room/cafe, and there are special little chairs so dolls can sit beside their mistress at the dining table.

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Caption: Ethnic dolls of all types are available

If there are any merchandising opportunities that are missed by Mattel, it’s difficult to think of them. For example, doll owners can even buy clothes for themselves that are the same as those available for their dolls. They can attend a theatre production starring people playing the parts of their dolls or purchase a CD of the American Girls Revue. There is even a movie being released in the near future, about one of the American Girl dolls titled Felicity, An American Girl Adventure.

The range of accessories is far beyond what one will find in toy sections of retailers such as Wal*Mart, and thus offer an infinite variety of products to doll owners. More importantly for the retailer, this offers an infinite number of sales opportunities –including such things as typewriters, wheelchairs (for “sick” dolls), riding outfits, horses, and horses and sleighs. The list is almost endless, and includes a full range of doll furniture, naturally.

All of these, of course, enable doll owners to make their dolls individual personalities.

And nothing comes cheap. Most dolls, with a single outfit, are priced at US$100. Most additional items cost upwards of US$20, so margins are impressive. Look around your own home, and chances are, there is an American Girl duplicate of your furnishings and clothing. The dolls even can have baby dolls of their own.AHJUSNews04Dec05

Caption: Showcases like this enhance the looks and value of dolls and their accessories

The merchandising extends way beyond the stores too. There is an American Girl magazine – both printed and online – and an American Girl club which hosts regular events. Special packages are available where a girl can spend a day at American Girl Place, or have a deluxe birthday party in the store.

In its most recent quarter, Mattel reported that sales of mass-market Barbie dolls were down quite substantially. However, American Girl sales rose by 12% and exceeded $69 million for the quarter, with the important Christmas season about to begin.

By artful staging and clever merchandising, American Girl brings life and excitement to a basic toy and great joy to doll owners. To learn more about this American merchandising phenomenon, visit:www.americangirl.com

Bob Vereen, Hardware Journal’s US Correspondent