There has been a dramatic change in consumer shopping habits with increasing demand for e-commerce which has been further driven by the global pandemic. McKinsey & Company indicates that businesses are moving quickly to online channels to stay competitive in the evolving economic ecosystem and the digitization timetable is accelerated by as much as seven years.

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For Build-A-Bear Workshop, which was founded over 25 years ago as a children’s mall-based experiential retailer, expanding and shifting the distribution channel to online came with challenges. Nevertheless, it achieved 20% digital demand penetration in 2021, the highest in the company's history. How did Build-A-Bear succeed in its e-commerce transformation when they are known for personal interaction? What innovations were needed to succeed in the evolving marketplace?

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From Brick and Mortar to E-commerce Evolution

Build-A-Bear started its journey in 1997 when malls were the popular destinations for family shopping and entertainment. The company’s iconic heart ceremony, where guests place a small red heart in the teddy bear, is part of the personalized hands-on experience that has helped make the brand so popular. Additionally, the hearts are often imbued with memorable emotions of love and care, consistent with the brand’s deep-rooted global mission to “add a little more heart to life.”

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Despite its early success, to thwart the mall traffic challenges, the company first focused on diversifying its retail business model by opening stores in hospitality locations, amusement parks and cruises. It is reported that 35% of its Workshops are now in tourist and non-traditional locations.

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However, as a brand known for providing in-person experiences, establishing a meaningful and growing e-commerce channel required a complete strategic shift. The approximately 500 global retail locations gave Build-A-Bear a great foundation, but diversification into digital would be necessary to prosper through the disruptive macroeconomic environment.  

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The company seized the opportunity with a relaunch of its website with mobile-first capabilities and a new loyalty program while driving innovation that maintained personalization, including the heart ceremony. As the global pandemic forced the temporary closure of all the company’s retail locations, its e-commerce capabilities were accelerated and integrated the store locations to more efficiently fulfill the growing digital demand, which tripled during that time.

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From Children to Teens and Adults

Build-A-Bear continued to evolve and expand its horizons with extended product assortments catering to adult brand enthusiasts with an age-gated, adult-focused section on the website called “The Bear Cave.” During the Valentine’s Day season of 2022, the company marketed a Build-A-Bear “After Dark” digital campaign that achieved over one billion media impressions, resonating with its loyal fan base. Efforts like this have driven the teen and adult business to be 40% of sales.

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From Teddy Bears to Movies and Games

Build-A-Bear continues to explore opportunities to enrich its portfolio across multiple digital content spaces. The Honey Girls movie, based on their owned intellectual property and currently streaming on Netflix, demonstrates the commitment to brand storytelling and has contributed to the additional strong content currently in the pipeline.

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With the newly launched digital collectibles (NFTs) and online Roblox Tycoon game, Build-A-Bear has now successfully built a multi-channel, multi-dimensional business model. President and CEO of Build-A-Bear, Sharon Price John, says: "At this point, Build-A-Bear is an iconic brand. It's so well-known that we believe we have an opportunity to continue to build an infrastructure that allows us to catch up with how much the brand means and the value of the brand to the consumer.”

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