The Merchandising Magic of “Cars” and the Anticipated Success of “Cars 2”

Consumer items linked to the 2006 film “Cars” have generated an eye-popping $2 billion in average annual sales since the movie’s release. This track record testifies to the brand’s resonance with boys across the globe. It also establishes the characters of “Cars,” especially the figures of Lighting McQueen and Mater, as some of the most popular in Disney history.

“After the ‘Cars’ DVD release, we started to see the business grow and grow,” said Jessi Dunne, DCP’s executive vice president of global licensing. “It was the perfect intersection of a tried-and-true play pattern of little boys and vehicles, and just absolutely lovable characters.”

With merchandise tied to “Cars 2,” DCP plans to build on what Dunne calls a simple formula for success. The company will partner with licensees such as Mattel, Kimberly-Clark, and Hallmark to supply major retailers with products like toys, stationary, apparel, and home decor. As the film transitions from theaters to DVD, books and Disney’s “Cars Toons” programming will advance storylines associated with particular characters and continue drive merchandise sales.

In this strategy, DCP plans to stick with the approach that has put some 10 million “Cars” T-shirts on the backs of children and helped the “Cars” bedding pattern for boys become the top seller in its industry. But Disney is also known for innovation, and DCP plans to improve on its merchandising strategy in ways that make sense for budget-conscious families.

In crafting plans for “Cars 2” merchandise, DCP is reflecting on lessons learned from the success of “Cars” merchandise, which helped Disney further expand its reach beyond a niche of princess-loving girls. “We just hadn’t had the right content to drive our boys’ business in the most recent years before ‘Cars,’” Dunne said.

But after “Cars” came out on DVD, DCP executives noticed that sales of “Cars” merchandise weren’t trailing off as expected. Clearly, Dunne said, the brand was striking a chord, even overseas, where naysayers had predicted the brand would likely get lost in translation.

To capitalize on surprising strong sales, DCP approached its licensee partners to help feed the marketplace. Toy maker Mattel, which had initially produced toys based on only 27 characters from the film, signed on to produce toys based on more than 180 “Cars” characters. Kimberly-Clark pioneered a line of “Cars” Pull-Ups for boys. One reason for the Pull-Ups venture: DCP research had found that Disney DVDs, which young children commonly watch about 40 times, tend to drive sales over time toward a younger demographic.

The new and the familiar

For “Cars 2,” DCP plans to build on existing licensee partnerships. For example, DCP will enlist Mattel once again to be a key developer of product. But there will be new players involved as well, including Lego, which will roll out product that allows children to build their own toys based on the “Cars 2” cast.

In terms of distribution channels, DCP plans to pursue a combination of tried-and-true avenues and a few new ones. Well-tested outlets will include major retailers WalMart, Target, JC Penney, Toys R Us, Kmart, and Kohl’s, to name a few. Websites operated by these outlets will also be important channels, as will, Dunne said. Inexpensive items such as stationary will likely be available, as “Cars” items have been, at the Dollar Store.

New twists include a technique for presenting merchandise in Disney’s retail stores. These stores will no longer group items by category, such as by putting all the mugs from various films in one section. Instead, items will be arranged by franchise, so all “Cars 2” items, from pajamas to light fixtures, will be grouped in one spot. The upshot for visitors will be more engaging experiences for children, especially boys between the ages of two and 12, as they behold a variety of merchandise at eye level for them.

“‘Cars 2’ will be part of a bigger program to reposition the Disney stores to have a better experience for kids,” Dunne said. “You’ll have a ‘Cars’ area filled with the best products that tell the ‘Cars’ story, and it will be the same for ‘Toy Story.’”

Partner retailers will be using some new approaches, too. Major outlets have adopted “Cars 2” themes that are unique to their stores. This means shoppers won’t find all the same “Cars 2” merchandise at every major retailer—it will vary from one chain to the next. Thus a shopper who’s committed to finding a particular item will need to venture out to Kmart, Walmart, or whichever store happens to carry it.

“We’ve gotten better at recognizing that each of our retailers wants to tell a unique story to tell to their customer,” Dunne said. “We created these themes, got them agreed to by the retail accounts, and then we shared this information with our licensee base so they could create unique products exclusively for these accounts.”

Selling opportunities won’t be limited to the big superstore chains. Grocery stores, drugstores, and value stores are also expected to be good fits for much of the “Cars 2” merchandise in these challenging economic times, Dunne said. Kroger’s, for example, has been in conversation with DCP about carrying product associated with the film.

“Moms have less time and less dollars, and they really want to be smart,” Dunne said. “We’re doing our part to help differentiate one retailer from the next.”

As the release of “Cars 2” approaches, retailers will be hearing more about what’ll be available for their shelves. And because kids will follow the adventures of its characters long after the theater and DVD releases, cash registers are expected to keep ringing for years to come.