A kids' birthday party at New York City's American Girl Place costs $30 a head. Ditto for a ticket to the doll retailer's in-store musicals. Twenty smackers will cover a new hairdo for your doll at the store's salon. But if you want to buy a doll, you'll have to shell out four times that. Despite such hefty prices, the three-story doll emporium that opened in midtown Manhattan last month is mobbed. So too is Chicago's five-year-old American Girl Place, which ranks as the Magnificent Mile's top-grossing store. Many of its visitors have no doubt come planning only to browse but end up leaving — as Karen Cardinal, 37, of San Francisco did last week — with $100 worth of accessories. Add a doll, she says, "and you can spend 200 bucks in the blink of an eye."
Even so, the American Girl stores are teeming with strangely serene mothers and grandmothers who don't seem to mind being dragged around by their bouncing, panting, ranting offspring, who beg and plead for a $70 miniature tepee or $38 Victorian commode. The genius behind American Girl's high-end products is that moms feel good about dropping a lot of cash on low-tech, wholesome Americana. Most of the dolls depict 9year-old fictional heroines at various points in American history, including Kaya, a Nez Perce tribe member in 1764, and Josefina, a Latina on hand for the opening of the Santa Fe Trail. The company also sells six novels about each of the historical dolls, which offer more depth than your basic Barbie.
I am amazed that anyone would spend so much money on toys. According to the article, to completely accessorize one doll costs nearly $1000.
Another article goes into more detail about the success of experiential retailing for American Girl.
American Girl Place, the exclusive home of the exclusive doll, opened in 1998. A pioneer in "experience" marketing, it offers not just dolls and books and clothes, but a show, museum-style exhibit, photo studio, etiquette lessons, tea parties and hair salon for dolls. "Girls are being socialized to shopping and to a ladies' day out," says Mary Ann McGrath, professor of marketing at Loyola University in Chicago. "It's a destination for moms and their daughters to spend the day. A female theme park without the thrill rides."
The store was considered a long shot – a single product taking up pricey real estate just off Michigan Avenue. Today, analysts estimate it grosses $35 million a year, moving product at twice the rate of the average Magnificent Mile retailer. "Now it has that Mecca-like attraction," says retail consultant and early naysayer Neil Stern.
American Girl Place cascades over three levels. The full-immersion, labyrinthine layout offers what retail psychologists call the "shopping adventure." Upper-level rooms include Dress Like Your Doll, pastel Bitty Baby, pink Angelina Ballerina and American Girl Today.
A Mecca like attraction? Wow! Someone nailed it with the marketing for this product. Mattel doesn't break out financials according to product line, but in their annual report I found several mentions of good sales growth for the American Girl line. I've always liked experiential retailing, and I love to go to places like the Lego store at Downtown Disney in Orlando,FL. I think it is a great way to strenghten a brand, and if you can create the kind of devotion American Girl has, you will have something very few companies ever achieve.