When my daughters were younger, they played with dolls all the time.
Most of those dolls were of the inexpensive variety. And as a parent, I wouldn’t have had it any other way. Why spend a small fortune on any toy young kids are likely to destroy or outgrow?
At one point when my daughters were about 6 years old, some friends chipped in and bought them American Girl dolls. And that propelled me into a whole new world.
Walk into an American Girl store, and you’ll see what I mean. From the adorably curated accessories to the in-store cafes, owning an American Girl doll is a whole experience — and not a cheap one.
But as popular as American Girl dolls once were, they may finally be losing their charm. And that’s something Mattel, the brand’s parent company, needs to take seriously.
American Girl faces challenges
The American Girl brand was launched in 1986. The goal was to create an assortment of dolls that could, in the eyes of the brand’s founder, connect generations of girls.
As the brand said, the goal was to introduce “historical dolls paired with rich stories that helped girls learn about the past through relatable characters and exciting accessories.”
And for 40 years, the brand has largely succeeded.
Every American Girl doll comes with its own story. And while the brand has branched out beyond just historical dolls, each creation boasts its own look and personality.
I know from experience that my daughters found their American Girl dolls relatable and fun to play with. And if it weren’t for the ridiculously high price tag, I would’ve been more than happy to cultivate that interest and indulge them with accessories to get more mileage out of their dolls.
Unfortunately for them, I’ve always had a mortgage to pay. So buying $57 outfits just wasn’t in the budget (for the dolls, as well as my actual kids).
I’m not the only parent who feels that way. And the staggeringly high price tag attached to those dolls and the stuff that comes with them has long been a turnoff for parents.
Now, as inflation soars and consumers rethink their spending, it’s all coming to a head.
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Is American Girl a sinking ship?
American Girl faces challenges due to changing consumer behaviors, CNBC reported. These days, people are spending their money more carefully because they don’t have a choice. When you’re struggling to afford weekly groceries, a $200 doll purchase becomes an automatic “no.”
American Girl is also facing challenges as kids today gravitate toward digital experiences.
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The brand’s 40th anniversary is a “precarious moment for American Girl and the whole doll industry,” said Jaime Katz, an analyst who covers Mattel.
Roughly 10 years ago, American Girl was recording more than $600 million in annual sales, according to CNBC. By 2023, annual sales were down to about $200 million.
But while a transition toward digital play is a trend the entire toy industry is grappling with now, the high cost of American Girl dolls is unique to the brand. And that will be a tough thing to overcome in the near term.
“Parents are more selective about discretionary spending right now,” Katz said. “That price point [for an American Girl doll] looks steep to many households.”
Of course, if there’s one thing American Girl has going for it, it’s nostalgia. Some consumers may continue to support the brand due to the love they have for it.
But nostalgia isn’t guaranteed to turn into actual sales. And so Mattel will need to think carefully about the future of the American Girl brand if it wants it to survive.
That could mean compromising on price point or finding other creative ways to make those dolls more relevant and desirable.
Related: Dollar Tree CEO signals tough times ahead for bargain hunters
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