- Disney plans to close at least 60 brick-and-mortar stores in North America as it shifts to a more e-commerce driven approach to retail.
- That represents 30% of Disney's 200 stores on the continent as of October.
- "While consumer behavior has shifted toward online shopping, the global pandemic has changed what consumers expect from a retailer," Stephanie Young, Disney president of consumer products games and publishing, said in a release.
COVID-19, without question, has accelerated the growth of e-commerce. Online and other non-store sales spiked by nearly 22% to $969.4 billion, according to National Retail Federation analysis.
That, combined with disrupted in-store shopping, has driven even healthy retailers to lower their store count and shift more resources online. Along with Disney, Best Buy recently indicated it was accelerating its store rationalization initiatives and plans to devote fewer square feet to sales floors.
For Disney, retail is something of a (lucrative) side hustle — a branding exercise along with being a sales channel. As a retailer, Disney has plays in its playbook beyond stand-alone stores. Young noted that the company has been expanding its shop-in-shops worldwide. That would include a shop-in-shop partnership with Target, launched in 2019 ahead of the holidays that helped beef up Target's assortment of toys and gave Disney an in with a growing force in the category in Target.
Disney's pivot to online follows a 4% decline in retail revenue in the fiscal year that ended in October 2020, which covered much of the pandemic so far. For reporting purposes, the brand giant lumps its retail revenue together with licensing, which together made about $4.2 billion for the fiscal year, or about a quarter of Disney's total revenue, according to the company's most recent 10-K.
Online, Disney plans to "create a more flexible, interconnected e-commerce experience that gives consumers easy access to unique, high-quality products across all our franchises," Young said. The company also said it aims to integrate the shopDisney platform more with the Disney Parks apps and social media platforms.
"This will be coupled with an assortment of new and elevated merchandise from the Company’s full range of brands, including adult apparel collections and artist collaborations, trend-forward streetwear, premium home products and collectibles," the company said.