Background
Build-A-Bear Workshop has positioned itself as a unique and one-of-a-kind retail business providing an interactive platform for designing customized stuffed toys. The personalized shopping experience provided by the retailer through in-store engagement accounts for the company’s competitive advantage. Since its founding in 1997 by Maxine Clark, the brand has more than 400 locations in 35 countries. Build-a-Bear Workshop has a unique selling proposition of experiential retail and creating genuine emotional bonds with customers through superior service (Glagowski, n.d.). The success of Build-A-Bear Workshop is attributed to the extent that they have expanded their population group through the website and brand licensing relationships encompassing teenagers, adults, collectors, and brand enthusiasts. The underpinning philosophy for Build-A-Bear Workshop is give and get, with parents being urged to provide information that, in turn, aids relevant customization information, introducing products through loyalty programs and automated gift cards to ease the shopping experience.
Problem Definition
The biggest marketing obstacle that Build-A-Bear Workshop encounters is the diminishing attraction and uniqueness of its custom-built experience, as the toy industry is fast being dominated by digital and providing instant gratification trends. Regardless of the company’s continuous innovation and introduction of different lines of products, the core experience, which used to be the leading factor for competition, is now at stake, owing to consumers’ changing preferences. This cloaked shift in dynamics, thus, has important implications for the company’s marketing strategy as it requires a readjustment of its engagement approach to effectively connect with the new generation of consumers while retaining its traditional and established clientele.
Situation Analysis
Strengths:
- Unique Customization Experience: the company’s distinctive offering enables clients to create customizable stuffed toys, setting it apart from ordinary retailers.
- Interactive Store Environment: The brand’s novel store layout creates an interactive environment, generating an engaging experience for the customer, which is more than merely transactional.
- Brand Loyalty: The company’s distinctive personalization process creates emotional connections to the brand, resulting in higher brand loyalty and a growing number of repeat customers by engaging in its unique personalization process.
Weaknesses:
- Limited Global Footprint: Build-A-Bear presence is only confined to a limited number of countries globally, which limits its area of influence and prevents the development of additional income streams on a global scale.
- High Price Points: the company’s premium pricing for its customizable toys makes it highly unlikely to be suitable for customers who are not price-insensitive. This may affect their penetration of the market into the market.
- Dependence on Physical Stores: Primarily, the company’s buyer’s appeal is directly defined by its in-store experience model, which makes it extremely sensitive to any changes in consumer behavior towards shopping in stores or online.
Opportunities:
- Digital Expansion: Creating e-commerce and highly virtual customization tools is a suitable investment to expand the brand visibility and to be more appealing for online shoppers who are finding online shopping growing their preference.
- Product Diversification: Incorporating into the new collection or with the seasonal product lines is an excellent way to attract different customer groups and help to meet the trend.
- Global Market Expansion: Penetrating new markets globally will enhance customer base and growth.
Threats:
- Rising Competition: Increased competition for market share from new entrants and existing giants.
- Changing Consumer Preferences: A shift in customer preference dynamics to digital interactive engagement potentially disrupts Build-A-Bear’s traditional in-store interactive engagement.
- Economic Fluctuations: Hard economic times potentially lead to changes in consumer spending habits making them save more than spend, which may adversely impact company sales.
Identification of Alternatives
To begin with, amplifying digital marketing initiatives holds enormous potential in resolving the problem of a weakening market share due to shifts in digital consumer preferences. This tactic is meant to help the company reach its target audience, which consists of technology-oriented individuals, and exploit online fuzzy trends. In addition, product diversification will ensure expand Build-A-Bear product offerings. Introducing more customizable options for purchase will attract a broad customer base to the brand’s offerings. Lastly, establishing partnerships with popular media brands will open new avenues for the company to sell its themed products. Partnerships with popular media franchises could create a series of stuffed animals and accessories, appealing to a broad customer base and possibly attracting new clients.
Evaluation of Alternatives
Digital Marketing Initiatives:
The company’s eagerness to explore digital initiatives significantly aligns with industry trends of toy customizable toy companies transitioning to online engagement. This alternative accentuates a trend among other businesses keen on engaging online communities, especially on social media and online sales platforms. Accordingly, Build-A-Bear Workshop has launched a 3D interactive digital shopping experience, enabling customers to create personalized toys online (Fuhrman, 2021). Besides, the company has significantly invested in digital technology to enhance its omnichannel capabilities, including the website design’s new update with an improved to user interface and Martech applications for seamless customer experience across channels. The brand has witnessed success on social media portals, as the Grogu soft toy in “The Mandalorian” generated a billion impressions across social media immediately after the launch (Forsdick, 2022). The company’s e-commerce sales have made considerable progress, reaching an impressive 20% of the total revenues. Leveraging its digital presence enhances the company’s reach to tech-savvy clientele. To date, the leading customer segment sales accounted for by the company are children who are considered tech-savvy and often occupied with the Internet. Expanding digital presence helps this retailer to target tech-friendly customers, thus increasing the general customer base and conforming to changing customer preferences (Pascucci, et al. 2023). Nevertheless, the chain should be purposeful in its investment in technology to ensure seamless integration of digital options with its brick-and-mortar experiences to avoid possible hurdles.
Product Expansion:
The Build-A-Bear Workshop product expansion is essential to attracting a diverse customer base and enhancing its competitive advantage. The company’s range of toys includes toys for different age groups, like adolescent toys, adult toys, and licensed products/collectibles (Fuhrman, 2021). Thus, the company can expand its customer base and grow by introducing different audience segments and updating toy trends based on new product lines and modes. Simultaneously, this opportunity helps boost revenue while increasing the capacity of the customer base. However, the company must conduct relevant market research to identify viable product extensions and successfully ensure the alignment of new products with the core offerings to impede brand identity dilution.
Building Relations with Media Brands:
Entering partnerships with popular media franchises can drastically enhance the brand’s appeal and attract new customers. Build-A-Bear has cleverly partnered with media franchises, for instance, the Grogu soft toy from “The Mandalorian,” leading to excellent social media responsiveness with a billion impressions during the launch phase (Forsdick, 2022). These efforts have immensely aided in heightening e e-commerce sales, leading to a 20% growth in the e-commerce segment. Thus, Build-A-Bear can amplify its collaboration with famous brands, penetrate new markets with co-branded products bearing the brand names, increase its presence in the market, and get the existing fan bases of media franchises. However, partnership negotiations can be highly complicated. As such, the company must ensure that such partnerships do not result in an over-reliance on external brands for sustained brand success.
Recommendation
Given the analysis conducted above, the recommended strategy for the company is amplifying the personalization element of the shopping experience by improving digital and in-store interactions. Although the company and its competitors struggle with profits because of changing consumer attitudes towards traditional retail, the alternative employs the brand’s trademark – customization – while offering experiential retail that meets consumer preferences. The strategy supersedes that of maintaining the status quo and readjusting the pricing strategies by identifying the current consumerism trend – prioritizing personal expression and technological interaction in purchasing without compromising its position as the leading brand in the market. As such, amplifying digital marketing initiatives to promote personalization significantly consolidates Build-A-Bear’s unique selling value and growth of client loyalty.
References
Forsdick, S. (October 4, 2022). Ready, teddy, go: How Build-A-Bear went from mall store to digital brand. Raconteur. Retrieved from https://www.raconteur.net/digital-transformation/build-a-bear-workshop-ceo-business-transformation
Fuhrman, E. (November 21, 2021). Build-A-Bear Introduces New Interactive Digital Shopping Experience. Build-A-Bear Workshop Press Release. Retrieved from
https://ir.buildabear.com/news-releases/news-release-details/build-bear-transforms-its-online-shopping-launch-bear-builder-3d
Glagowski, E. (n.d.). Build-a-Bear Builds a Brand Around the Customer Experience. TTEC. Retrieved from https://www.ttec.com/articles/build-bear-builds-brand-around-customer-experience
Pascucci, F., Savelli, E., & Gistri, G. (2023). How digital technologies reshape marketing: evidence from a qualitative investigation. Italian Journal of Marketing, 2023(1), 27-58. https://doi.org/10.1007/s43039-023-00063-6
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