Disney and Target Join Forces In A Winning Partnership -12/26/19

From the Simplr studios in San Francisco, this is your daily briefing.  

Introduction

This is Today in Five, for today, Thursday, December 26th, here are today’s headlines in digital disruption.

Over the summer, Target announced it was opening mini Disney theme shops within some of its stores, as well as a Disney digital experience in the Target app. With movie-based toys increasing in popularity, this is a winning partnership for the two companies.

First, here’s what’s making headlines.  

E-Commerce Traffic Rose Significantly the Weekend Before Christmas

According to the Verizon Holiday Retail Index, e-commerce traffic rose by double digits the weekend before Christmas. Compared to last year, traffic rose 21 percent on Friday the 20th, 21 percent on Saturday the 21st, and 14 percent on Sunday the 22nd. The analysis from Verizon indicates that the combination of promotions and shipping deadlines drove solid results for the weekend.

Super Saturday Breaks Sales Records

Not only did e-commerce traffic rise, but the last Saturday before Christmas, known as Super Saturday, broke sales records. According to figures from retail consulting and research firm, CGP, Super Saturday sales on the 21st reached a record $34.4 billion dollars, marking the largest single-day in U.S. history. The sales day was 10 percent above Black Friday’s $31.2 billion dollar total this year. Cumulatively, digital sales have comprised 58 percent of the year-over-year growth in holiday retail spending in 2019.  

E-Commerce Returns Could Be Nearly $42 Billion for Holiday Season

The total value of e-commerce returns over the holiday season could reach $41.6 billion dollars. The overall return rate is growing about 10 percent annually, straining storage space as the reverse logistics process can require 15 to 20 percent more space than outbound logistics. A well-run reverse logistics operation will become increasingly important as retailers continue to strive for sustainability goals that include waste components. The returns process results in about 5 billion pounds of waste and 15 million metric tons of carbon emissions from transportation every year, according to a CBRE report.        

Disney and Target Join Forces In A Winning Partnership

Over the summer, Target announced it was opening mini Disney theme shops within some of its stores, as well as a Disney digital experience in the Target app. With movie-based toys increasing in popularity, this is a winning partnership for the two companies. Target has always sold Disney-licensed products, but the new arrangement ups the count and gives the retailer exclusive products that are otherwise sold only at Disney stores.

Beyond that, the store is creating an "experience," the new way to the customer's heart. This features a lounge area in which movie clips are played on a large screen surrounded by Disney merchandise, music, interactive displays, movie-based games, and props for photo ops. The shops are only available at 25 Target stores, but the company is planning for at least 40 in total.  

Target couldn’t have timed the shops more perfectly, coinciding with both the holiday season and the release of two anticipated Disney hits. Disney is already benefiting from the movie hype. CEO Bob Iger said that during the fourth quarter of 2019,  "Consumer products operating income was up 36 percent due to growth in merchandise licensing, as a result of strong revenue growth from sales of Frozen and Toy Story merchandise,”. Target also saw a sales boost during the fourth quarter, part of which was fueled by toys.

With its huge reach, including all 50 states, strong customer satisfaction, and well-organized fulfillment options, Target is a natural ally for Disney.  

Closing

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Thanks for listening to this latest episode of Today In Five. We’ll see you tomorrow.