eccpartnership build a bear case study

8/7/2019 ECCPartnership Build a Bear Case Study

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March 2006

[email protected]

Francis J. Gouillart The Experience Co-Creation Partnership 100 Main Street, Suite 130 Concord, MA 01742 Mobile: +1 781 888 0186

The enclosed material is proprietary to the ECC Partnership and is for the internal use of the addressee only.

Experience Co-Creation in Retail

Build-A-Bear Workshop Case Study


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2007 Venkat Ramaswamy, Francis GouillartAll rights reserved.

Build-A-Bear Workshop case study March 2006 [email protected]@eccpartnership.com

1

Build-A-Bear Workshop Is A Highly Successful, Innovative Retailer

Source: Company Presentation for Investment Analysts, March 2006


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2

Stores Sell Stuffed Animals That Kids Design and Build In-Store



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3

Stores Create Unique, Interactive Retail Entertainment Experiences



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4

The Chief Executive Bear

Source: http://www.oprah.com/tows/slide/200402/20040225/tows_slide_20040225_01.jhtml

Maxine Clark

Chairman & ChiefExecutive Bear

Build-A-Bear is the brainchild of

Maxine Clark, who is known as

ChiefExecutive Bear. She says

the idea for the stores came to her

when she was shopping for Beanie

Babies with a 10-year-old friend.

I had been in the retail business for

many years, she says. I felt it had

gotten boring and I wanted to put

thefun back in. What better way to

appeal to children, and theheart of

a child that's inside all ofus?


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5

Build-A-Bear Workshop Has A Successful Track Record Of New StoreGrowth

Source: Annual Shareholders Meeting Presentation May 2005


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6

And Its Store Model Drives Superior Sales Per Square Foot

Source: Company Investor Update, March 2006


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As Well as High Gross Margin and Expense Leverage

Source: Company Investor Update, March 2006


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8

The Build-A-Bear Workshop Store Consists of A Series of Fun, Fully-InteractiveBear-Making Stations Where Guests Create Their Own Stuffed Animals

Source: Build-A-Bear fact sheet, and St. Louis Commerce Magazine

ChooseMe

Hear Me

StuffMe

Stitch Me

FluffMe

Name Me

Dress Me

Take MeHome

In-StoreBear

MakingProcess

In Build-A-Bear Workshops stuffed animal-making assembly line, guests select the furry animalthey want to make, choose the sound the creature will utter and then stuff, stitch, fluff, name, and

dress their new friends. The entire process takes approximately 20 minutes.


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9

Guests First Choose They Type of Stuffed Animal They Want To Make atthe Choose Me Station

Sources: Build-A-Bear fact sheet and www.laughingplace.com

CHOOSE MEAt Choose Me, Guests areintroduced to all the furrycharacters in the store and selectone, which soon becomes theirnew furry friend.

ChooseMe

Hear Me

StuffMe

StitchMe

FluffMe

NameMe

DressMe

Take Me

Home

In-StoreBear

MakingProcess

Depending on the season, there are typically between 30-35 varieties of stuffedanimals including teddy bears, bunnies, dogs, kitties, a frog, or a pony as well asBeary limited edition collectibear friends. Build-A-Bear Workshop stuffedanimals are very affordable, ranging in price from $10- $25.


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10

Next, They Select A Sound ForTheir Bear at the Hear Me Station

HEAR ME

At Hear Me, Guests may select fromseveral sound choices to placeinside their stuffed animal tofurther personalize their new friend.The sound chip is inserted safelyinside the new friend during

the stuffing process. Guests canrecord their own 12-second Build-A-Sound message for $8.Pre-recorded sounds includegiggles, growls, barks, meows andother animal sounds, as well asmessages such as I Love You or

songs like Let Me Call YouSweetheart. Single sounds are $3,and a six-in-one sound is $5.

ChooseMe

Hear Me

StuffMe

StitchMe

FluffMe

NameMe

DressMe

Take MeH

ome

In-StoreBear

MakingProcess

Sources: Build-A-Bear fact sheet and http://www.stlcommercemagazine.com/archives/april2000/cover.html


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11

StitchMe

The Next Step In the Process Involves Bear-Stuffing at the Stuff MeStation Including Putting Hearts Inside

STUFF ME

and HEART STUFFAt StuffMe, with the help ofmaster Bear Buildersm

associates, Guests fill thenew friend with stuffing for

just the right amount ofhuggability.

ChooseMe

Hear Me

StuffMe

FluffMe

NameMe

DressMe

Take MeH

ome

In-StoreBear

MakingProcess

Sources: Build-A-Bear fact sheet and www.laughingplace.com, andschweitzerhome.net/ blog/xoom/photos/buildabear/

A very special step that is unique toBuild-A-Bear Workshop also happensat this station called Heart Stuff.Each Guest selects a small satin heart,

adds to it his or her own love andwishes, and carefully places it insidetheir new furry friend. This process, nomatter whether its a man, woman, boyor girl doing it, is a heart meltingexperience.


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12

This Is Followed By Stitch Me and Fluff Me Steps

STITCH ME

At Stitch Me, the last seamis neatly pulled shut, nearlycompleting each new bestfriend. Before closing theanimal, the master BearBuilder associate inserts abarcode, allowing it to be

reunited with its owner ifever lost and returned toBuild-A-Bear Workshop.Thousands of furry friendshave been reunited throughour exclusive Find-A-BearID tracking program.

ChooseMe

Hear Me

StuffMe

StitchMe

FluffMe

NameMe

DressMe

Take MeH

ome

In-StoreBear

MakingProcess

Sources: Build-A-Bear fact sheet and www.laughingplace.com

FLUFF MEAt FluffMe, the Guestbrushes the animal at thebear spa to make sure hisor her new friend is wellgroomed and pawfectly

huggable!


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Then Guests Give Their Stuffed Animals A Name at the Name MeComputer

Source: Build-A-Bear fact sheet and www.laughingplace.com

NAME MEGuests then stop at the Name Mecomputer, where they answerseveral questions about their newfurry friend, including the birth dateand of course, the name of their

new furry friend. This information iscompiled and becomes part of apersonalized birth certificate for theGuest to take home. Guests canselect either English or Spanish.

ChooseMe

Hear Me

StuffMe

StitchMe

FluffMe

NameMe

DressMe

Take MeHome

In-StoreBear

MakingProcess


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14

Guests Finish The Process By Dressing Their New Stuffed Friends

Source: Build-A-Bear fact sheet and www.laughingplace.com

DRESS MEAt Dress Me, Guests maydress their new friend in thebeary latest furry fashions.The bear apparel boutiquefeatures clothes andaccessories for all occasions.Pawsonal Shoppers, trained

in the latest bear-fashioncoordination, help Guestsselect the perfect outfits andaccessories for their newbest friend. Outfits rangefrom $5-$15 and accessoriesrange from $1-$15.

Build-A-Bear Workshopeven has their own fashionexpert, Pawlette CoufurFashion Advisor to the FurryFamous.

ChooseMe

Hear Me

StuffMe

StitchMe

FluffMe

NameMe

DressMe

Take MeHome

In-StoreBear

MakingProcess

Sneakers galore forthe well dressed pal.Sketchers for yournew pal are $8.

Clothing for the bears include casual wear, formal wearand costumes including aviator, ballerina, policemenuniforms and more.


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15

And By Taking Their New Stuffed Animal Home

Sources: Build-A-Bear Workshop fact sheet; Build-A-Bear Workshop website

TAKE ME HOMEFinally, Guests conclude theirbear-making adventure at theTake MeHomestation, wherethey are given their customizedbirth certificate and a special BuyStuff Club card to apply towards

future purchases. Each new furryfriend is then placed in their veryown Cub Condo carryingcase, which is designed as ahandy travel carrier and newhome for their friend.

ChooseMe

Hear Me

StuffMe

StitchMe

FluffMe

NameMe

DressMe

Take Me

Home

In-StoreBear

MakingProcess


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16

Store Associates Lead Customers Through The Bear-Making ProcessEvery Step of the Way



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For Example, Employees Help Young Customers At Each ofThe Bear-Making Process Stations

Source: Photo: http://www.packeteer.com/resources/prod-sol/Build-A-Bear.pdf


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Employees Also Often Sing Happy Bear-day to Young Guests

Source: www.laughingplace.com


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Store Associates Master Bear Builders Are Carefully Recruited,Receive Training, and Are Given Career Opportunities

Source: Company website and St. Louis Commerce Magazine

EmployeeTraining Is Thorough

Associates go through a three-week training programat Bear University.

Receive extensive training in customer communication and aretaught the value of working effectively as a team.

Allows the company to hire people without retail experience.

Recruiting occurs via the

website and through in-store applications:

Many of our employees look at this as a career, not

just a job. Employees are glad to work in a place

where they receive 'psychic income.'

Retail may not pay top dollar, but there is a lot of

satisfaction here. One of my marks of success ishaving our associates grow with the business and

move up the chain.

Company Founder, Maxine Clark

Employees are Valued and Given Career

Opportunities:


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20

The Company Culture Is Fun and Highly Supportive of Employees

Employees are called associates and have titles like professor of bearology,

honey manager and bearitory leader. At World Bearquarters, employees can ride on scooters, and dogs and kids

are welcome in the office

Both the men's and women's bathrooms are equipped with diaper-changing stationsand there is a room with a TV set and toys for workers' children.

Benefits

The company offers flexible work schedules and telecommuting.

The benefits package includes medical and dental insurance, a 401K savings plan,and life insurance

Each employee gets 15 honey days a year to use for vacation, illness or whateverthe person wishes.

Build-A-Bear also contributes $100 annually toward a wellness program, such as a

health club membership. Performance Feedback

All employees can receive feedback from individuals and departments they support

Also, Guest Feedback lets staff know how they measure up and what op-bear-tunities they have to improve.

Source: St. Louis Business Journal, May 4, 2001, and company website


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21

Build-A-Bear Workshops Interactive Platform Allows Creation of an AlmostUnlimited Number of Personalized Stuffed Animals From A Small Number of SKUs

Source: Company Presentation for Investment Analysts, March 2006, and laughingplace.com

Less than 450 SKUs in store are able

to give customers a tremendousamount of customization choice

SKU types include animal skins,clothing, shoes, and accessories suchas sunglasses.


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22

Example Outfits

Source: Company website


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Example Accessories



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Example Shoes



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25

Example Customized Stuffed Animals

Source: www.bookmice.net/darkchilde/ stuffed/build.html


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26

Pricing Transparency Throughout The Bear-Making Process AllowsGuests To Remain In Control OfTheir Cost



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27

Build-A-Bear Workshop Engages Its Key Customers Children - andTheir Communities

Sources: Company Presentation for Investment Analysts, March 2006; Photo from Article on the New York City Store

Current Customers and Community

New York City Store


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28

The Interactions That Kids Have In-Store Often Include Their Families andFriends

By building their own stuffedanimal bears, kids can becreative, play, andexperience joy and fun.


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29

Build-A-Bear Workshop Has Created A New Experience EnvironmentCalled Build-A-Party That Involves Whole Groups Of Customers

Source: schweitzerhome.net/ blog/xoom/photos/buildabear/

Example: Brownie Group Store Trip


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New Linked Environment #1: Mobile Stores

Build-A-Bear is experimenting

with mobile stores. The retailerhas designed an 800-sq.-ft.mobile store within a trailer thatthe company uses to extend theBuild-A-Bear brand to sportsevents such as the Super Bowl,

NBA Fanfest, and NASCARraces.

At the push of a button, a roof-mounted VSAT dish links upwith a satellite for connectivity.Once the link is established, the

store systems access all theinformation relevant to the daysbusiness, including local taxregulations, pricing and SKUinformation.

Source: http://www.bettermanagement.com/library/library.aspx?l=13794;http://www.icsc.org/srch/sct/sct0505/retail_today_6.php


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New Linked Environment #2: Sports Stadium Stores

Build-A-Bear Workshop opened its first in-stadium store with the

Philadelphia Phillies at Citizens Bank Park in March 2004. Make Your Own Phanatic doll.

Sources:http://www.highbeam.com/library/docfree.asp?DOCID=1G1:133563004&ctrlInfo=Round19%3AMode19b%3ADocG%3AResult&ao=;Annual Shareholders Meeting Presentation May 2005


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Linked Environment #3: Website Store



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New Linked Environment #4: Friends 2B Made Store

Friends 2B Made is a sister company: guests create dolls with customized

personalities; each outfit comes with two charms (for doll and owner) ; and price isright, with dolls starting at $12, accessories at $2 and complete outfits for $8.

Sources: Company Annual Shareholders Meeting Presentation (May 2005); http://travelwithkids.about.com/od/familyfunplaces/p/buildabear.htm


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Build-A-Bear Workshops In-Store Experience Platform Has DrivenOrganic Growth Through Linkages With New, Extended Environments

Build-A-BearWorkshopIn-Store

ExperiencePlatform

Website

StoreEnvironment

MobileStore

Environment

SportsStadium

StoreEnvironment

Friends2B Made

StoreEnvironment


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Maxine Clark Relies On Her Customer Network and Cub Advisory BoardTo Get and Test New Ideas

Build-A-Bear founder Maxine Clark asked several children for advice when

she first developed her idea for the store

She continues to proactively dialogue with her customers Im on a lot of online buddy lists, she says. To return the thousands of emails she gets each week from customers, Clark

uses a BlackBerry

To tap into customer reactions to new ideas, she has also established agroup of ~20 children, ranging in age from six to 14 years old, who serveon a cub advisory board.

Scouting out a new location, Clark will email members in an area to ask themwhich malls they shop at most.

Shell poll her network to see if the latest trend shes spotted in New Yorksay,

metallic sequined purses--might be worth rolling out as bear accoutrements. I used to feel like I had to come up with all the ideas myself, but its so mucheasier relying on my customers [for help]. The list of customer suggestions thathave made their way onto shelves is always growingfrom bear accessorieslike mini-scooters to mascot bears sold at sports stadiums.

Source: http://www.stlcommercemagazine.com/archives/april2000/cover.html; and article in Fast Company Oct. 2005


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2007 Venkat Ramaswamy, Francis GouillartAll rights reserved


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Build-A-Bear Workshop Also Leverages Its Supplier Partner Network ToCo-Create New Offerings For Additional Organic Growth

Build-A-Bear's partnership with Major League Baseball goes beyond

its stadium deals. The company has participated in promotional dayswith several teams, including the Cardinals, Chicago Cubs, New YorkMets, Pittsburgh Pirates and Kansas City Royals in 2005. For thosepromotions, Build-A-Bear develops an exclusive, team-branded teddybear or team mascot available only to fans at the ballpark on a specific

day.

Source: St. Louis Business Journal, Jan. 20, 2006; and company website

eccpartnership build a bear case study

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