The American Girl company is in the business of magic, memories, and new best friends. Their core products are mini-series, six books each, about nine-year-old girls at different periods of time (Colonial America, the Civil War era, the Victorian era, and more). They also sell dolls and accessories to go along with the books. What they really sell, however, is larger than any single product.
To me and millions of others who read American Girl growing up, they were selling stories of young girls that I could see myself in. American Girl’s true value is in being able to create a deep sense of relatability by balancing the foreign (the stories’ unfamiliar historical contexts) with the familiar (the characters have the authentic dreams and concerns of nine-year-old girls).
The process begins with the meticulous creation of the characters. Developing a new character takes 1-3 years because of the extensive research teams do. Teams bring together “historians, museum curators, and linguists” (1) and take research trips to ensure their stories are accurate. For Kaya, a Native American girl, they worked closely with the Nez Perce tribe to ensure that “everything from the positioning of her braids to the patterns on her ‘pow-wow outfit’ were historically accurate” (1).
However, being familiar and authentic to young girls is just as important as being accurate. To ensure they remain in touch with their customer, American Girl conducts extensive customer research at all their touchpoints (in stores, online focus groups) and also leverages the experiences of their employees, 80% of whom are women.
By investing in extensive historical research while also gathering constant customer feedback, American Girl is able to develop stories with deeper resonance and impact.
A unique store experience
American Girl controls its product distribution tightly, only selling online and through American Girl stores. By designing its own stores, American Girl can create a one-of-kind customer experience. According to Wade Opland, the brand’s SVP of global retail, “Everything is 38 inches high. That is the average height of a nine-year-old girl. This is for her.” (1)
The stores sell books and dolls, of course, but they are specifically designed to create “girl-doll moments” (1). Flagship stores feature a hair salon for dolls, a doll hospital, and a café where your doll gets a chair at the table right alongside you. The immersive store experience mirrors the immersive experience of reading the books, writ large. They generate not only revenue (“Everyone leaves with at least one deep red shopping bag. Everyone.” (1)) but delight (“A girl came in and asked me, ‘Who created this? Was it god?'” (1)).
American Girl has also leveraged its expertise in creating high-quality dolls to expand into a new line of dolls, called Truly Me. With Truly Me, girls can design a doll that looks like them. Not only can they customize the hair, skin, and eye color, but “you can buy your doll orthodontic headgear; there are allergy bracelets and EpiPens, wheelchairs and service dogs.” (1)
In this case, American Girl is able to leverage existing capabilities in doll manufacturing to expand its offerings to young girls and further its core mission – to help girls see themselves in the toys they play with.
Challenges going forward
Despite its well-aligned business and operating models, this past November, American Girl saw a dip in sales for the first time since 2010. Critics also asserted last year that its focus had shifted away from historical stories and toward “blander” and less controversial characters (2).
As American Girl caters to customers’ desire to customize, they may also risk moving too far away from their roots in historical fiction. They began in the business of immersion – bringing readers into a different world and introducing them to a new context through a familiar lens. As they shift to customizable dolls and online games, they are entering the business of reflection, where the focus is on self-expression and self-presentation. “Instead of you becoming your doll, your doll becomes you.” (2)
American Girl must recognize this potential shift in their business model, make a deliberate choice about the extent to which it wants to play in each space, and ensure its operating model continues to align with its strategic initiatives.