Build-A-Bear Workshop forced to end store promotion after ‘unprecedented’ response
Sometimes, promotions are too popular—especially ones involving furry stuffed animals.
Build-A-Bear Workshop on Thursday ended its one-day “Pay Your Age” sale much earlier than expected after its stores were flooded with customers, with long lines, in some cases, extending outside malls. The promotion allowed customers who visited a Build-A-Bear store on July 12 to pay their current age to make a stuffed animal of their choice. (The sale was open to customers of all ages, with the price topping out at $29.)
“Per local authorities, we cannot accept additional Guests at our locations due to crowds and safety concerns,” Build-A-Bear said in a statement posted to its website at 10:30 a.m. Thursday morning. “We have closed lines in our U.S. and Canada stores. We understand some Guests are disappointed and we will reach out directly as soon as possible.”
The retailer called the response to the sale “overwhelming and unprecedented” in its 21-year history. It distributed vouchers to shoppers in lines, to be redeemed for a future purchase.
Analyst Neil Saunders, managing director of GlobalData Retail, said response to the event indicates that the Build-A-Bear concept remains relevant and popular.
“But first, Build-A-Bear needs to get its alienated customers back on side,” he said. (For more analysis, click here.)
The popularity of the event was evident across the nation — and across the pond. At Syracuse’s Destiny USA center in Syracuse, New York, the line stretched from the storefront around large portions of the mall, including the food court by the carousel. People started lining up at Mall of America at 6 a.m. The BBC reported that lines “about a mile long” formed at one U.K. location.
Build-A-Bear created the one-day promotion “to kick off its new everyday celebration of birthdays.”
Build-A-Bear Workshop has more than 400 stores worldwide.
Analyst: Build-A-Bear needs to repair damage caused by promotion snafu
With much higher than anticipated demand for its “pay your age day” promotion, Build-A-Bear Workshop has become a victim of its own success. The decision to shut stores and end the promotion early was necessary on both safety and operational grounds, but it will damage the brand.
A lot of parents are now upset that they cannot fulfill promises to their children, and many who made special trips to malls are frustrated that their efforts have come to nothing. In our view, Build-A-Bear is going to have to take some action to remedy this, maybe by offering deals and special offers to those affected. This could have a future impact on profits, although it will be helpful to sales volumes.
The good news is that the high demand indicates that the Build-A-Bear concept remains relevant and popular. While the company needs to plan future promotions far better, there is seemingly an opportunity to stimulate sales with the right deals and offers. But first, Build-A-Bear needs to get its alienated customers back on side.
Private grocery brands making a comeback
Grocers continue to ring up sales across their private brands, but supermarket operators have some challenges ahead.
Sales of private-label merchandise has dramatically increased in the past year, hitting $138 billion across multiple retail outlets and convenience stores in the United States. Supermarket operators single-handedly rang up $68 billion in private label sales in 2017, according to data from the Food Marketing Institute (FMI) and IRI. The data was revealed in the first half of a four-part series, called “The Power of Private Brands from the Register 2018.”
While this was a slight decline of 0.1% for supermarkets, private brands represent 16.4% of dollar sales in the grocery channel, and 14.8% across multiple retail outlets and convenience stores.
According to data, 69% of consumers said it’s very important, or somewhat important to have a good assortment of private brands in food and beverage. Generation X is responsible for 31% of all dollars spent on private brands across all outlets, compared to 19% each for older Millennials and younger boomers.
Private brands also influenced 46% of consumers in their choice of where to shop in 2017. However, this can also work against supermarket operators going forward, as retailers outside of the grocery channel, such as mass merchants, dollar stores and club retailers, are all out-performing supermarket operators when it comes to private brand sales. For example, private label is driving 1.6% growth across these three categories, according to the study.
One culprit could be that trips per buyer are down in the grocery channel, and most likely these shoppers are going to other retail channels, such as mass and club, the study revealed.
Sales could also be impacted by grocers pulling back their private label advertising. A year ago, retailers seemed to be promoting too much, as a percent of sales on promotion was up. In fact, private brands increased promotions about twice as much as the overall food business.
“Grocery retailers might need to consider whether they have pulled back too much on promotions,” the study said. “If things were different, reduced promotions might be a healthy response. However, under the circumstances, retailers probably want to examine whether more price and display activity would be successful in advancing their store brand cause against mass, club and other channels.”