Amidst the People of Walmart rests a haunting secret, for lurking on one of the shelf’s sits merchandise so impossible to unload that it turns the laws governing revenue management inside out and threatens to reverse years of economic teachings.
In a nation of 300 million people (13 percent of that population being Black), the predominate form of entertainment for young girls has been through the Barbie doll, an innocuous toy analogous to a young boys G.I. Joe.
However, a horrifying, mortifying, stupefying dangerously offensive secret was revealed recently that threatens to endanger the market capitalization of Mattel, the company that manufactures Barbie. As of late, other toys targeted for young girls – mainly the hip-hop influenced Bratz – has cut into the market share of Barbie, but recent economic indicators point and strong sales of Ken’s former girlfriend point to excellent returns for investors:
Don't bet against Barbie.
Sales of Mattel Inc.'s fashion icon and her pink-and-white empire increased for the first time in almost two years, helping put some holiday cheer into Mattel's fourth-quarter earnings.
That and cost cutting helped the No. 1 U.S. toymaker's fourth-quarter profit jump 86 percent on a 1 percent sales increase.
"Barbie is back," CEO Bob Eckert said.
Mattel seems to be back as well. The better-than-expected earnings are a big improvement from the previous year, the weakest holiday season in decades, when Mattel's profit slid by nearly half and revenue dropped 11 percent.
The improvements stem from price increases taken over the past year and a global cost-cutting program. During the year the company cut jobs, improved its supply chain, reduced the number of items it developed and slashed capital spending to offset weak sales.
Sales of Barbie - who turned 50 last year - rose 12 percent in the quarter, including a 9 percent rise in the United States and a 14 percent jump internationally.
Key items were Barbie's new Fashionista line, which are smaller, more bendable Barbies accompanied by fashionable accessories; I Can Be Barbies, which depict Barbie in career outfits; and accessories such as a camper and townhouse.
The sales increase was "by far the biggest increase in Barbie sales in over 10 years," said Needham & Co. analyst Sean Needham.
And the brand continues to show momentum, after stagnation for several years. Eckert said Barbie market share and retail orders are up so far this year.
"I think the product line has turned a corner," said BMO Capital Markets analyst Gerrick Johnson. "It looks sharper, more relevant than it has in the past."
During the three months ended Dec. 31, Mattel profit rose to $328.4 million, or 89 cents per share, during the quarter. Excluding a tax benefit, earnings totaled 81 cents per share - handily beating Wall Street forecasts of 68 cents per share.
The resurgence of Barbie comes at a time when the secret crept out for all to see and behold, as the price-cutting giant Walmart was working to unload a commodity few wanted nor desired, and at a price below the market value of the traditional Barbie.
You see, although the brand Barbie is undergoing undeniably fortuitous sales far above the expectations of Wall-Street, some members of the Barbie family are being left behind… and No Child should be Left Behind:
Walmart is raising eyebrows after cutting the price of a black Barbie doll to nearly half of that of the doll's white counterpart at one store and possibly others.
A photo first posted to the humor Web site FunnyJunk.com and later to the Latino Web site Guanabee.com shows packages of Mattel's Ballerina Barbie and Ballerina Theresa dolls hanging side by side at an unidentified store. The Theresa dolls, which feature brown skin and dark hair, are marked as being on sale at $3.00. The Barbies to the right of the Theresa dolls, meanwhile, retain their original price of $5.93. The dolls look identical aside from their color.
Editors at Guanabee.com said the person responsible for the photo told the Web site that it was taken at a Louisiana Walmart store. The person did not return e-mails from ABCNews.com.
A Walmart spokeswoman, who could not verify the exact store shown in the photo, said that the price change on the Theresa doll was part of the chain's efforts to clear shelf space for its new spring inventory.
"To prepare for (s)pring inventory, a number of items are marked for clearance, " spokeswoman Melissa O'Brien said in an e-mail. "... Both are great dolls. The red price sticker indicates that this particular doll was on clearance when the photo was taken, and though both dolls were priced the same to start, one was marked down due to its lower sales to hopefully increase purchase from customers."
"Pricing like items differently is a part of inventory management in retailing," O'Brien said.
But critics say Walmart should have been more sensitive in its pricing choice.
"The implication of the lowering of the price is that's devaluing the black doll," said Thelma Dye, the executive director of the Northside Center for Child Development, a Harlem, N.Y. organization founded by pioneering psychologists and segregation researchers Kenneth B. Clark and Marnie Phipps Clark.
"While it's clear that's not what was intended, sometimes these things have collateral damage," Dye said.
Other experts agree. Walmart could have decided "that it's really important that we as a company don't send a message that we value blackness less than whiteness," said Lisa Wade, an assistant sociology professor at Occidental College in Los Angeles and the founder of the blog Sociological Images.
Last year, Wade posted a blog entry on another case where a black doll was apparently priced less than its white counterpart at an unidentified store. Wade said that when white dolls outsell black dolls, it's usually because black parents are more likely than white parents to buy their children dolls of a different race.
"Most white parents wouldn't think to buy black doll for their child, even if they believe in equality and all those things," she said.
Overcoming 'Decades of Racial and Economic Subordination'
Decades after segregation and the civil rights movement, studies show Americans -- both black and white -- continue to internalize the heirarchical notion that lighter skin tone is considered "better than" darker, Wade said.
One landmark study revealing color hierarchies among black children took place in the 1940s. Run by the Clarks, Northside's founders, the study asked a group of black children to choose between playing with white dolls and black dolls; 63 percent chose the white dolls.
Last year, following the inauguration of the country's first black president, "Good Morning America" revisited the experiment. This time, at least some of the results were markedly different: of the 19 black children surveyed, 42 percent said they'd rather play with a black doll compared with 32 percent for the white doll. But when asked which doll was prettier, nearly half of the girls in the group chose the white doll.
"Black children develop perceptions about their race very early. They are not oblivious to this. There's still that residue. There's still the problem, the overcoming years, decades of racial and economic subordination," Harvard University professor William Julius Wilson told "Good Morning America."
Wade said that Walmart could have chosen to keep the dolls at equal prices in an effort not to "reproduce whatever ugly inequalities are out there."
But Sociological Images co-author Gwen Sharp, a sociology professor at Nevada State College, said that inequality might not necessarily be what's behind Ballerina Theresa's lagging sales.
Black parents, she said, may simply choose black dolls whose physical features hew more closely to those of themselves and their children. Barbie has weathered critcism in the past for producing dolls that bear little resemblance to the ethnicities they represent.
"Maybe for both parents and kids, it seems more real and less symbolic of a change to have a doll that actually presents a range of attractive features rather than 'Oh we've changed the skin tone slightly,'" Sharp said.
Last year, Barbie manufacturer Mattel debuted a new line of African American dolls, "So In Style," designed to better resemble black women's facial features with wider cheeks, broader noses and fuller lips.
"I wanted to make sure that the makeup and face and skin tone was true to girls in my community," doll designer Stacey McBride-Irby said in a video on the So In Style Web site.
A Mattel spokeswoman said that the So In Style dolls have met with a "great response" and are part of the toymaker's 2010 catalogue.
Whatever Ballerina Thesesa's lagging sales may say about society, retail analyst Lori Wachs said Walmart may ultimately regret their pricing choice. The discount giant, which reported a quarterly profit of $4.7 billion last month, could have absorbed whatever loss it might have suffered had it kept Ballerina Theresa's price the same as that of Ballerina Barbie.
"I fully respect retailers rights to mark things down as they see fit but I also think they need to look at the bigger picture," Wachs said. "I think there are certain things companies have to be sensitive about and clearly this was one of them."
The "bigger picture"? The rest of this entry will showcase why the bigger picture isn't a positive one.
For those wondering what that ominous secret is need only read “The Walmart Effect”, a book that describes the incredibly efficient advanced analytics and pricing algorithms garnered through complex consumer spending to locate the best price for maximum purchases by shoppers. Aggregating the data from disparate Walmart stores (geographically), Walmart pricing analysts can ascertain the most efficient prices to sell goods and quantify prices to best divest unwanted goods to calibrate the actual market price it should conceivably sell for to the general public:
…the real story of Wal-Mart, the story that never gets told, is the story of the pressure the biggest retailer relentlessly applies to its suppliers in the name of bringing us "every day low prices." It's the story of what that pressure does to the companies Wal-Mart does business with, to U.S. manufacturing, and to the economy as a whole. That story can be found floating in a gallon jar of pickles at Wal-Mart.
Thus, the reason the Black Barbie doll was marked down to $3 dollars, as Walmart analytic research had established that was the price point at which the doll should sell for, although the white Barbie doll was nearly 100 percent higher priced because it was still being purchased at that price!
For those wondering what we are talking about, please consult this link about revenue management, so you can understand the dreaded secret that priced Black Barbie below the white Barbie doll.
Black people have long had a hate/hate relationship with Barbie, yet never yield nor waver in their demands for a more favorable doll that reflects Black physiology:
With so few black dolls on toy-store shelves, many black parents had high hopes when toy powerhouse Mattel Inc. released So in Style, its first line of black dolls with wider noses, fuller lips, sharper cheekbones and a variety of skin shades.
Now, despite the company's efforts to solicit input from a group of high-profile black women, including Cookie Johnson, wife of former basketball star Magic Johnson, some parents are saying the dolls aren't black enough. They complain that five of the six dolls feature fine-textured, waist-length hair; half of them have blue or green eyes.
Moreover, all have the freakishly skinny body of a Barbie (something that irks some white parents as well).
"I thought it was unfortunate that once again we're given a doll with hair that is so unlike the vast majority of black women," says Cheryl Nelson-Grimes, the mother of a 7-year-old girl and a resident of Queens, N.Y. "I feel very strongly that I want my daughter to love herself for who she is and not believe that using a hot comb or straightening her hair is the only way to be beautiful."
The criticism over Mattel's new black fashion dolls underscores how difficult it is for large commercial companies to please a widely diverse black community with a single image or two depicting young African-Americans.
"If they had given the dolls short, kinky hair or an Afro, people might have complained that it was too Afro-centric," says Nicole Coles, a 40-year-old mother from Temecula, Calif. "We're so hard and picky."
Mattel nonetheless has taken the comments to heart and plans to expand the line in the fall of 2010 to include a doll with more of an Afro hairstyle.
Like Mattel, Walt Disney Co. met with a number of black advisers while making its first animated movie featuring a black heroine, "The Princess and the Frog," which opens widely next week. Based on their feedback, the heroine's name was changed to Tiana from Maddy, which was thought to be too close to mammy, and her job went from a maid to a waitress, according to Dee Dee Jackson, national president of Mocha Moms, a support group for women of color that Disney consulted for input on the film. "Her skin hue is darker, her hair is in Afro puffs as a young child, and her features are full but not exaggerated," Ms. Jackson says.
This isn't Mattel's first foray into creating black dolls. The El Segundo, Calif.-based toy maker first introduced a black doll in 1967, when it painted Barbie's cousin Francie brown. Two years later, Barbie got a black friend named Christie. A black Barbie came along in 1980, but her features were almost identical to those of her white counterpart.
The expensive line of American Girl dolls, also owned by Mattel, features a black doll named Addy Walker, a runaway slave whose story is set during the Civil War. But with a price tag of $95, it is out of reach for a lot of families.
Other toy lines, including the popular Polly Pocket miniatures, also made by Mattel, include only a few black dolls. "Polly Pocket only has one or two brown dolls, and my daughters fight over them," says Mary Broussard-Harmon, a mother of three girls from Corona, Calif.
Doll designer Stacey McBride-Irby says she sought to fill the black-doll void when she dreamed up So In Style dolls for Mattel two years ago. Ms. McBride-Irby says she wanted to give her 6-year-old daughter a wider choice of "dolls that looked like her."
The sad state of Black Barbie sales must be explained by the lack of Blackness these dolls exude, for they have white features that Sir Mix-a-Lot would find unsettling and sadly inhabit countless toy shelves instead of Black kids rooms.
If you’ve seen the family film Jingle All the Way, you’ll understand what we mean when we say the demand for Black Barbie dolls is inversely proportional to the demand for Turbo Man dolls.
This isn’t the first time a company has sold Black dolls for less than white dolls, as just last year Baby Alive dolls were embroiled in a similar scandal, with Black dolls selling for 10 percent less than their white counterpart.
Dolls have played an integral part in American history, as the landmark Brown V. Board of Education decision utilized doll studies to conclude segregation was wrong. Unfortunately, these doll studies also conclude something else entirely:
Fifty years after psychologist Kenneth Clark conducted the doll test that was used to help make the case for desegregation in the landmark case Brown v. Board of Education, a 17-year-old filmmaker redid the social experiment and learned that not much has changed.
In the 1954 test, Clark showed children a black doll and a white doll and asked black children which doll they preferred. The majority chose the white. The findings were not surprising for the time. In the summer of 2005, Kiri Davis, a high-school teen, sat with 21 black kids in New York and found that 16 of them liked the white doll better.
"Can you show me the doll that you like best?" Davis asked a black girl in the film. The girl picked the white doll immediately. When asked to show the doll that "looks bad," the girl chose the black doll. But when Davis asked the girl, "Can you give me the doll that looks like you?" the black girl first touched the white doll and then reluctantly pushed the black doll ahead. Watch the video.
The film has left audiences across the country stunned and has reignited a powerful debate over race.
"You hear the audience really gasp because they feel the pain," said Thelma Dye, who worked in Northside Center for Child Development, founded by the late doctor Clark.
"The result of the test is just as painful as [it was in the] 1950s," Thelma Dye said on ABC. "I would not take the film to say all the black children's self-esteem is suffering. We have to continue to ask questions about this film, to ask questions about its meaning."
For Davis, the film was personal. "I remember when I was little," Davis said. "People told me I can't be a princess because I was black. All princesses aren't black. These little things get you after awhile."
Black girls like white dolls (about the only thing that Tiger Woods would find agreeable with Black people). Even at discounted rates – thanks to complex analytical formulas that show Black dolls don’t sell at the same rates as white dolls – Black people still find them untenable.
Even in the film Small Soldiers, the paucity of Black Barbie dolls is noticeable (go to 10:25 in the video to see the hilarious scene).
Stuff Black People Don’t Like includes Black Barbie dolls, because study after study concludes Black girls want to play with white dolls. Like Tiger Woods, they find the white dolls prettier. Not much of a secret anymore.