#97 American Girl

Blog  #97 — Thursday, June 11, 2020

http://dennyhatch.blogspot.com/2020/06/97-american-girl.html

Posted by Denny Hatch

Are You Surrounding Your Customers?      The Marketing Genius of American Girl

Sometime in the late 1970s, I submitted a fanciful article to Folio: The Magazine of Magazine Management about direct mail. To my surprise, it was accepted, and the editor, Chuck Tannen, invited me to lunch at a restaurant near his offices in New Canaan, Conn., just up the pike from my house in Stamford.

Tannen was a lovely, civilized guy; short with a mop of curly hair and owlish glasses. In the 1990s, Tannen invested in Jay Walker’s Priceline.com and walked away with a tidy $23 million, which delighted me.

As we settled down for lunch, I asked Chuck if Folio were profitable. He wagged his flat right hand and indicated the answer was comme ci comme ça, or so-so. He then went on to explain:

“Folio is the flagship. It spawns books, special reports, the big Folio conference, consulting assignments, list rentals and card decks. When someone in the magazine business buys something from us or attends the Folio Show, it is our license to go after him and sell him anything and everything we have. It is our intention to surround the industry.”

Tannen’s line about surrounding the industry remains etched in my memory. At the time I thought it a brilliant concept. I still do.

At the Next Table: Three Generations

Many years ago, Peggy and I invited our friends Paul Goldberg and Joseph Dipper to lunch in Chicago where we were all attending the Direct Marketing Association Conference. Our hotel concierge recommended NoMI on the seventh floor of the Chicago Park Hyatt. Our table by the big window overlooking the iconic Chicago Water Tower. Everything about the restaurant was world-class—the décor, service, food, wine and vodka (Grey Goose). Dining doesn’t get any better than that, and I would recommend it to anybody who has plenty of money or a fat expense account.

The next table was set for three. Lunching there were a most stylish young suburban matron, her equally stylish daughter— age about 9—and the daughter’s doll, which was continually being fussed over by both. The three of them were having a grand time together. Moreover, they were all wearing the same outfit—the mother, the daughter and the doll.

As they were leaving, I asked the lady if the doll was from American Girl. “Oh, yes,” was the reply. “We have a two o’clock appointment at American Girl Place to do some shopping for clothes and accessories.”

American Girl: The Beginnings

In the 1980s, Peggy and I were running WHO’S MAILING WHAT! out of our house in Stamford, Conn. It was a newsletter based on the giant archive of direct mail and catalogs acquired from our correspondents around the country.

I was vaguely aware of the sumptuous, oversized Pleasant Company catalog offering up-market dolls to little girls. It was a niche thing, and we included it in our listings, but having neither daughters nor granddaughters, we never paid much attention.

The company was founded in 1986 by Pleasant T. Rowland, a former elementary school teacher and TV news reporter who dreamed up the American Girls Collection which she described on the Web site: 

The American Girls Collection and its contemporary counterpart, American Girl Today, were created especially for girls ages 7 to 12—girls who are old enough to read and still love to play with dolls. For younger girls we offer Bitty Baby, a line of soft, huggable baby dolls, board books and accessories that encourage creative play and nurturing behavior.

At Pleasant Company, we are committed—as you are—to providing your American girl with rich, age-appropriate play experiences. By choosing the right books and toys for your daughter at the right age and stage of her growth, you protect her development, nourish her spirit, and give her imagination wing.

With revenues of $300 million, American Girl was bought by Mattel in 1998 for $700 million. American Girl did $342.4 million in 2007, down 28 percent from the prior year.  American Girl is a business model of pure genius that every marketer can learn from. Quite simply, like Folio back in the 1970s, it surrounds the market.

The Great American Girl Smorgasbord

When Peggy’s niece was between 7 and 12, the American Girl catalog used to come to the house and long phone conversations ensued between sisters as to what Aunt Peggy’s gift(s) should be for birthday, Christmas.

I went to the www.americangirl.com website and found an eye-popping (and pocketbook-popping) array of delightful goodies and services: Dolls, Books, Movies, Furniture, Doll Hospital, Doll outfits for every occasion and Accessories—e.g., Maryellen’s Seaside Diner ($350), American Girl City Market ($100), Volkswagen Surf Bus ($650), Julie’s Pinball Machine, Julie’s Pinball Machine ($100), Explore More Luggage Set ($30), American Girl Pet Boutique ($250).

For several years matching outfits for three generations were offered.

Wait, there’s more!  The Stores!

For the retail experience, American Girl has 17 stores. The flagship is Chicago’s American Girl Place on the legendary Magnificent Mile—a jaw-dropping collection of attractions: three floors and a mezzanine offering boutiques, a doll hair salon, doll hospital, theater, bookstore and clothing for both doll and child,” wrote Alex Kuczynski in The New York Times. “There is also a bustling cafe, which offers brunch, lunch, dinner and high tea, and is often booked months in advance.” One of the more amusing accounts of the American Girl retail experience is by a doting father:

Once a year, as the holidays approach, I engage in a ritual well known to men of a certain demographic ilk. Armed by my wife with a shopping list detailed enough to thwart paternal cluelessness, I enter American Girl Place off Fifth Avenue in Manhattan. And there, amid the madding throngs of little girls and their mothers, I rush to score the season’s must-have accessories for Felicity and Samantha. Those would be my daughters’ beloved dolls.

It is not my favorite shopping experience. But then, American Girl wasn’t created for fathers. And if you are a little girl or her mother (or grandmother, or aunt), American Girl is, at most times, a quite breathtakingly attractive amalgam of education and entertainment, all of it rooted in storytelling.

After a $22 lunch, a $32 revue, a $15 hair styling, and a $24.95 photo session, plus a few new outfits and a book or two, of course, you’re talking about a dollstravaganza tab running to several hundred dollars. Not for the faint of heart. Nor, as I’ve noted, for dads. And that’s before the package deal with any number of hotels, which (again, brilliantly) offer turndown service for dolls in their own beds; Wyndham Hotels throws in a logoed doll bathrobe.

—Keith H. Hammonds, Fast Company, September 2006

Fast Facts About American Girl

• More than 157 million American Girl® books have been sold since 1986.

• Over 32 million American Girl® dolls have been sold through the company's catalogue, retail stores, and website since 1986.

• The American Girl catalogue is the largest consumer toy catalogue and ranks as one of the top 30 consumer catalogues in the country.

• American Girl® magazine ranks among the top ten children’s magazines in the nation and is the largest publication dedicated exclusively to girls ages 8 and up. 

• American Girl's proprietary retail stores have welcomed over 94 million visitors. The stores have won numerous awards and are recognized as premier models for experiential retail.

• The American Girl website, americangirl.com, receives over 45 million visits per year.

• American Girl's social channels—Facebook, Instagram, Twitter, Pinterest, and YouTube—reach a combined audience of over 2MMfollowers.

• American Girl has a long-standing commitment to children's charities nationwide. To date, the company has donated more than $125 million in cash and products.

Takeaways to Consider 

• The glory of American Girl is the customer base—an endless supply girls reaching ages 4-12 who love dolls with referrals from mothers and grandmothers—happy alumnae of the American Girl Experience.

• Pleasant Rowland did not start a catalog business or a retail operation selling individual, unrelated disparate items like so many catalogs that crashed and burned—Lillian Vernon, Sharper Image and DAK Industries.

• Rowland created a fun and exciting fantasy world that she turned into a perpetual continuity series. She doesn’t have buyers. She has collectors bent on enhancing a lifestyle they love.

• Other niche lifestyle catalogs of this ilk: Sporty’s Pilot Shop, PilotMall.com, Boaters Catalog, Overton’s (Boating Essentials) … you get the idea.

• Check out the American Girl Web site for ideas that could be applied to your own endeavors. It is a marvel—easy to navigate, first-rate at persuading visitors to part with their money, brimming with offers and opportunities.

• Are you surrounding your industry or marketplace?

• Always think about line extensions—relevant new products and services to generate more revenue from your existing customers (i.e., get a larger share of wallet).

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