Rumors of Walt Disney Co (NYSE:DIS) and a host of other companies being interested in Twitter Inc (NYSE:TWTR) have opened up the speculation floodgates. And it has given pundits a little wiggle room to stretch their imaginations.
Most of the time, the nature of this job allows me to do some serious thinking about facts and figures regarding the market and its key companies, and then determine which outcomes are probable, plausible or downright unlikely.
This is not one of those times.
Rather, this is semi-random “what if” regarding Walt Disney stock and the company’s apparent willingness to dole out tens of billions of dollars for Twitter.
By Tuesday, a small army of critics were pointing out plenty of reasons why Disney would be stupid to make such a move. That’s fine. Everyone is entitled to an opinion. But if Twitter isn’t a good fit and DIS still wants to reach beyond its current media stage, what should it buy?
An editor jokingly pointed out that rather than shelling out the $30 billion Twitter says it wants, Disney instead could acquire Sears Holdings Corp (NASDAQ:SHLD) and J C Penney Company Inc (NYSE:JCP) and Macy’s Inc (NYSE:M) and Dicks Sporting Goods Inc (NYSE:DKS) and still have money left over.
A ridiculous idea? I thought so too … at first. The more I thought about it, though, it wasn’t as crazy as it sounded on the surface.
Bad Service Is the New Norm
Just for the record, this is not a prediction. To the best of my knowledge, Disney has never even thought about getting into the retail business beyond its own stores. And even those are simply an extension of its movie and theme park business.
For those consumers who have been to one of Walt Disney’s parks or in one of its stores, though, there’s something fascinating about how flawless they are. Both truly are immersive experiences.
And yes, Disney’s shops deliberately follow the same model its parks do.
Major elements of that model include characters that are never out of character, no employee ever actually saying “I don’t know,” and trash cans that never need to be emptied in public view. No detail is too small or trivial for Disney to not make it great. Employees — called “cast members” — are even taught posture, gestures and facial expressions, as those minor matters can actually make a big impact on a guest experience.
What’s that got to do with retailers like Macy’s or JCPenney?
As much as most department stores love to blame e-commerce competition, the reality is, miserable in-store experiences have made it all too easy for consumers to forego that trip to the mall.
There’s no specific empirical evidence that retail service is bad and getting worse. I looked. Anecdotally, though, plenty of people are frustrated by employees who are more likely to be texting on their phone than merely acknowledging a customer has entered their department. Sears horror stories are common now, and completely believable. But it’s not as if more reputable Macy’s doesn’t have service problems of its own.
Disney Does It Right
But that’s just the way it is, right? Disinterested employees are the new norm, and none of them care if they get fired. (Not that getting fired is easy to do.)
There’s actually some modicum of truth to the premise, and in that regard I have sympathy for retailers. (And I know of what I speak — I used to be a retail manager, and even though the gen-Yers and millennials that tend to staff stores now weren’t around yet, I saw apathetic attitudes starting to materialize as I was making my way out of the business.)
It raises a question, though. How does Walt Disney do it, including in its stores? It’s not pay. While Disney pays better than average, it doesn’t pay leaps and bounds better.
Don’t think for a minute its store employees aren’t just as attentive to the full-on “experience” that park employees are. Try to walk all the way to the back of a Disney Store and back out the front door again. It’s extremely unlikely you’ll be able to do it without being greeted by an employee.
Point being, service with a smile can be taught. And when it is, it pays off; 70% of first-time guests at Disney’s parks come back again (and that’s not a cheap visit).
It’s not just service, though. Sights, sounds and even smells are all addressed with a wow-inducing perfection.
If struggling retailers would take a few of Disney’s ideals and put them into action, they may not all be in the trouble they’re in.
Bottom Line for Walt Disney
Don’t misunderstand. Even with Disney-like delivery customer service, brick-and-mortar retailing would still be facing formidable online competition. And also understand once again that Walt Disney isn’t apt to get into the department store business.
But if it did, I’d be willing to bet it could do it well, figuring out how to do what the likes of Macy’s and JCPenney can’t figure out for themselves. Disney knows it’s more about people than product, and that it’s selling an entertainment experience instead of merchandise.
In that light, I’m almost rooting for Disney to acquire Twitter, just to see what Twitter could become in more consumer-savvy hands.
It’s a fun idea to play with, anyway.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
