Building customer loyalty doesn’t come easy, but officials at Build-A-Bear are excited after a highly successful fourth quarter performance.
During the company’s Feb. 19 fourth-quarter earnings conference call, Build-A-Bear CEO Sharon Price John discussed how the consumer value equation helped spark a nearly 10% increase in consolidated same-store sales.
“We have continued to successfully refine our consumer value equation,” Price John said, according to Seeking Alpha. “We balanced the tactics of reducing discounts and taking selective price increases with an integrated brand building marketing effort designed to drive more profitable sales and elevate product stories. During the fourth quarter, our Merry Mission Christmas campaign was a great example of how this new brand building marketing approach can generate both sales and margin for our company.”
Price John said the company positioned its proprietary Merry Mission Reindeer product as intellectual property and buoyed it with exclusive advertising and a mobile app.
“This approach elevated the perceived value of the line, enabling parity retail pricing with our licensed offerings for the first time,” she explained. “By doing this, we increased average transaction value and added margin. The app, which extended our brand interaction by creating play beyond the plush, had
over 1.5 million game sessions. This, along with the strength of our other proprietary and licensed properties, namely Disney’s Frozen and Nickelodeon’s Teenage Mutant Ninja Turtles, fueled our 9.9% comparable store sales increase in the fourth quarter.”
Price John pointed to four key strategies in 2014: Optimizing real estate, refining the consumer value equation, rationalizing the expenses structure, and establishing the groundwork to further leverage core competencies and brand equity
With the closing of underperforming stores, Price John said the company selectively opened stores in new formats to take advantage of high-traffic tourist locations.
“An example of our ongoing opportunistic approach to non-traditional real estate is the fourth quarter opening of five temporary shop-in-shops within key Macy’s locations, including the Herald Square in New York City flagship store,” she explained. “This initiative not only added sales in the quarter, but also increased our brand exposure to the hundreds of thousands of tourists and local consumers to visit Macy’s as a part of their holiday tradition.”
In the second half of 2015, Price John said the company will start to update its aging store fleet and systematically roll out a new store design that has been developed to improve productivity while refreshing the brand look to be more relevant to the millennial consumer.