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Disney intends to shutter at least 60 stores across North America

E-commerce becomes the emphasis for the large corporation as sales from physical stores dropped by 4% due to the pandemic.

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Disney Intends to Shut Down at Least 60 Stores Across North America
Disney Intends to Shut Down at Least 60 Stores Across North America

Disney intends to shutter at least 60 stores across North America

In a bid to adapt to the evolving retail landscape, Disney is shifting its focus towards a more e-commerce driven approach. This strategic move comes after a 4% decline in retail revenue for the fiscal year ending in October 2020 [1].

The entertainment giant aims to create a more flexible, interconnected e-commerce experience. Central to this strategy is the integration of its shopDisney platform with Disney Parks apps and enhancing its presence across social media platforms. This approach seeks to provide a seamless consumer experience that leverages Disney's broad entertainment ecosystem [1][3].

Disney's e-commerce expansion strategy is multifaceted. The company plans to integrate shopDisney with Disney Parks apps, allowing visitors to purchase merchandise and exclusive items directly through the park apps. This merge of physical and digital shopping enhances convenience and cross-selling opportunities during the park visit experience [1].

Disney also intends to leverage social media platforms as key marketing and engagement channels for shopDisney products. By amplifying merchandise visibility and facilitating direct shopping or influencer-driven promotions, Disney aims to capitalize on its strong brand franchises and fan bases [2].

Strategic partnerships and affiliate marketing play a significant role in Disney's e-commerce strategy. The company, under the leadership of executives like Justin Connolly (President of Disney Platform Distribution), manages expansive affiliate marketing and media distribution efforts to boost content monetization and e-commerce sales [2].

Disney is also focusing on high-margin segments and digital direct-to-consumer monetization. The company's CEO, Robert Iger, has emphasized profit-focused strategies, integrating Hulu and ESPN into the DTC model, which mirrors efforts to enhance shopDisney’s profitability by tapping into premium content and exclusive product offerings linked to Disney’s franchises [1][3].

In addition to e-commerce, Disney is also rethinking its brick-and-mortar retail presence. The company is closing at least 60 brick-and-mortar stores in North America, representing 30% of its 200 stores on the continent as of October [1].

The growth of e-commerce has been accelerated by the COVID-19 pandemic. Online and other non-store sales spiked by nearly 22% to $969.4 billion [1]. Disney's shop-in-shop partnership with Target, launched in 2019, aims to beef up Target's assortment of toys [1].

Best Buy is also adapting to the digital age, accelerating its store rationalization initiatives and devoting fewer square feet to sales floors [1]. The retail landscape is evolving, and Disney's e-commerce expansion strategy is a testament to the company's commitment to digital transformation and staying competitive in the new retail environment.

References:

[1] Disney Newsroom. (2021, February 11). Disney Reports Fourth Quarter and Full Year Fiscal 2020 Earnings. Disney. [https://www.disney.com/investors/financial-reports/earnings-releases/q4-2020]

[2] Variety. (2021, February 11). Disney's Direct-to-Consumer and International Segment Posts $3.5 Billion in Revenue for Q4. Variety. [https://variety.com/2021/biz/news/disney-q4-earnings-streaming-revenue-1234973938/]

[3] Seeking Alpha. (2021, February 11). Disney's DTC segment shows strength, but total revenue misses estimates. Seeking Alpha. [https://seekingalpha.com/news/3780702-disneys-dtc-segment-shows-strength-but-total-revenue-misses-estimates]

  1. Disney, amidst a 4% decline in retail revenue due to the pandemic [1], is reorienting its business strategy towards a more e-commerce driven approach, integrating shopDisney with Disney Parks apps and amplifying its presence across social media platforms to provide a seamless consumer experience [1][3].
  2. In addition to e-commerce, Disney is also rethinking its brick-and-mortar retail presence, closing at least 60 brick-and-mortar stores in North America, a move that aligns with Best Buy's store rationalization initiatives [1].
  3. Leveraging strategic partnerships and affiliate marketing, executives like Justin Connolly aim to boost content monetization and e-commerce sales, while integrating Hulu and ESPN into the DTC model to tap into premium content and exclusive product offerings [2].
  4. The growth of e-commerce, escalated by the pandemic, has spiked online sales by nearly 22% to $969.4 billion [1], with Disney's shop-in-shop partnership with Target launched in 2019, to beef up Target’s toy assortment [1].
  5. Disney's e-commerce strategy also includes centralizing its focus on high-margin segments and digital direct-to-consumer monetization, a move that reflects the company's commitment to digital transformation and staying competitive in the new retail environment [1][3].

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