Beauty and the Beast’s Biggest Target? Nostalgic Millennials
It’s half past noon on a Saturday, and a couple of dozen kids and their parents are gathered at the Disney Store in Sherman Oaks, Calif., for a Beauty and the Beast event. Music from the film plays, and kids are handed pieces of paper they can fold into the Chip Potts character. “Let me hear you roar like the Beast,” a Disney staffer urges. The audience roars along.
Walt Disney Co. needs to get everyone’s buy-in for the merchandising push planned around the March 17 release of the live-action Beauty and the Beast redo. Disney’s consumer-products division, the largest entertainment licensing operation in the world, has been on a tear in recent years, thanks to the billion-dollar bonanzas Frozen and Star Wars. Sales of products tied to those films, though, have cooled recently; and last quarter, which included the crucial Christmas season, the company’s merchandise revenue fell 23 percent, to $1.5 billion.
Disney consumer-products chief James Pitaro’s strategy for getting the division back in growth mode is to broaden the audience for merchandise. In particular he wants to peddle gear to millennials who grew up watching Disney films and now want to relive their childhood or share the stories with their own kids. “This is probably priority No. 1 for us,” Pitaro says. “This idea we call the generational pull.”
There’s already plenty of the more predictable kid-focused merchandise on store shelves: $23 sparkly yellow dresses, posable $26 dolls, $9 Belle water bottles. And this fall, Hasbro Inc. will roll out a $120 programmable Belle doll that dances and sings after kids type a code into a related mobile app.
Launching a slew of tie-ins aimed at goods that would actually suit millennial moms required some new thinking. Step 1, Pitaro says, was to target higher-end labels that create a “halo” around the Beauty and the Beast brand. These include Juicy Couture, which is making $700 track jackets, and Invicta, with $500 watches. Disney also signed up prominent London-based runway designer Christopher Kane—who a decade ago caused a stir with his tight bandage dresses—to put together a line that includes $245 Beast T-shirts and a $6,000 women’s silk jacket with a blue bow. Kane sees a natural flow between girls dressing up in twirly yellow dresses and women in fancier duds. “There’s always a mix of fantasy in fashion,” he says.
For non-fashionistas, Disney has lined up more practical Beast tie-ins including Twinings tea bags, Neutrogena sunblock, and a $280 Le Creuset soup pot sold exclusively at Williams-Sonoma. “It appeals to those who grew up watching the original film,” says Janet Hayes, brand president at Williams-Sonoma Inc. “I think the finishing touch on the handle of the lid saying ‘be our guest’ is a great touch.”
In a first for a Disney Princess line, Pitaro’s team is also aggressively targeting male customers. Licensee Cufflinks Inc. is selling rose-patterned ties, teen retailer Hot Topic Inc. is offering men’s blazers inspired by the film, and New Era Cap Co., an almost 100-year-old millinery outfit, has made Beast-themed baseball caps for guys.
Last year, Disney’s consumer-products division, which includes its own stores, earned almost $2 billion on sales of $5.5 billion. But the market for movie-related merchandise has gotten much more competitive lately. At least 23 kid-focused films will feature toy tie-ins this year, according to the International Licensing Industry Merchandisers Association. Many come from studios, such as Warner Bros. Entertainment Inc. and Universal Studios, that have hired former Disney executives to run their licensing businesses.
There’s also the risk of film character merchandise fatigue. “Every seven years, entertainment toys peak and decline,” says toy entrepreneur Isaac Larian, whose MGA Entertainment Inc. owns brands including Little Tikes and Bratz. “Consumers get fed up.”
Pitaro, naturally, disagrees. He says the success of Disney’s film operation, which produced 5 of the 10 highest-grossing movies in the U.S. last year, gives him plenty to work with. “The biggest lever that we can pull here is this idea of audience expansion,” he says. “New regions, new countries, and into new demographics.”
The bottom line: Disney, whose merchandise revenue fell 23 percent last quarter, hopes Beauty and the Beast gear for millennials will revive sales.