What Disney Taught Me About Ecommerce: Mastering GMV per Thousand Views as a Digital Revenue Per Square Foot
Duffy and Friends dance performance outside of the Whistle Stop Shop - Shanghai Disneyland: Shanghai, China
In physical retail, one of the key metrics is "Revenue Per Square Foot", the average revenue earned for every square foot of sales space per year. In the United States revenue per square foot for all retail averages at about $325. This is an extremely useful metric and can be applied throughout an organization to compare the efficiency of the capital invested in retail real estate. For example a mass market retailer such as Walmart may achieve $480/sq-ft, while top specialty retailers may do significantly better: Lululemon $1,560/sq-ft, Tiffany & Co $3,000/sq-ft, Apple $5,550/sq-ft.
So, what's the equivalent metric that helps us measure the efficiency of our 'digital real estate' in content-driven ecommerce? I believe GMV (Gross Merchandise Value) per thousand views (GPM) serves as a powerful analogy to 'Revenue Per Square Foot,' directly gauging how effectively we are monetizing the traffic visiting our digital properties. For product managers and product owners in this space, GPM should be a Northstar metric, as any optimization – whether in product selection, pricing, content strategy, or promotions – should ultimately aim to increase this key indicator of digital revenue efficiency.
Content-driven ecommerce is still new for many, so it may be useful to get inspiration from a retailer that commands a revenue per square foot exceeding any of the top specialty retailers. These are the shops at Disney Parks and Experiences. The LOWEST performing stores in any Disney Park across the globe outperform the BEST public specialty retail in revenue per square foot.
How is this possible?
Honestly it's not a fair comparison. When I was the revenue and planning manager for retail and restaurants at Shanghai Disneyland, I had access to a box of tools to drive customer behavior that most specialty retailers couldn’t even dream of. We could partner with some of the most creative people in the world in design, entertainment, culinary, and operations to create experiences that enticed customers to take home something to remind them of the “magic” they experienced at our park.
To achieve this level of performance we didn’t simply put a shop at the exit of the TRON Lightcycle ride and hope for the best. My team and I paid careful attention to the retail customer journey from Awareness, Consideration, and Conversion and focused on initiatives where we could test and measure the results of each of these changes.
Awareness. At Disney we were always looking to use entertainment to create a reason for guests (Disney’s preferred term for customers) to walk through the door. Entertainment doesn’t just mean Broadway style shows or parades of princesses, this runs the gamut of cast-members (front-line staff) playing with the newest bubble wand to organizing opportunities for guests to take their picture with their favorite costumed character outside of an appropriately themed store every hour on the hour.
This strategic use of entertainment was highly effective in influencing guest traffic, particularly during off-peak hours, thereby maximizing the return on Disney's significant real estate investment. This same principle of creating compelling reasons for 'foot traffic' is mirrored in the digital world by platforms like TikTok Shop. Here, creators monetize their engaging content – from makeup tutorials to cleaning hacks – effectively driving 'virtual foot traffic' to product listings, which is the crucial first step in increasing GPM (Gross Merchandise Value) per thousand views.
Visual merchandising and design at the World of Disney - Disneyland: Anaheim, CA
Consideration. The Disney Imagineers are well known as the multi-disciplinary creative force that design all of the experiences in the Disney parks. They create the visual merchandising and package design that encourages exploration and imagination in the guests that walk the stores. This overinvestment in multi-sensory design helps to showcase how buying the product (or an entire collection) can transform an everyday experience (like drinking your daily coffee) into a magical moment.
It's a missed opportunity when brands overly focus on virality at the expense of fundamental product presentation. A wildly popular fashion video, for instance, loses its impact on GMV per thousand views if the product page lacks essential details like a sizing chart, hindering the add-to-cart rate. While ecommerce can't fully replicate the sensory richness of physical retail, investing in high-quality product descriptions, comprehensive images, and crucial technical information directly enhances the consideration phase. This is super-charged in content-driven ecommerce where clear and thorough product demonstrations can simultaneously build awareness and drive consideration.
Fairy Godmothers making candy apples at the Main Street Bakery - The Magic Kingdom, Walt Disney World: Orlando, FL
Conversion. It is not operationally efficient to make candy apples in the shops. This is a show, designed to create opportunities for live interactions that build trust and convert sales. Perfectly cleaned granny smith apples, chocolate and caramel dipping sauce, and candy toppings are all prepared in a central kitchen, with small batches delivered for finishing throughout the day. This creates an opportunity for the “fairy godmothers” to create a personal relationship with the kids and parents who are mesmerized by the process of dipping apples in caramel coating and attaching candy decorations. While this is an inefficient way to make candy apples, it may be a great way to recommend a sweet treat to try, like the $7.99 Mickey Ice Cream Macaron that’s for sale at the counter.
Human beings are social creatures and are drawn to personal interactions. Livestreaming in ecommerce taps into this by offering live interaction, as presenters are able to address questions and concerns from potential buyers in real time. While still following an overall script, the best ecommerce livestreamers are able to improvise when facing objections, providing personal opinions or even recommend alternatives. Even in the age of AI, or maybe especially in the age of AI, human interactions are invaluable.
In my work developing product strategies and advocating for tools that enable content-driven ecommerce at TikTok, I always try to understand where along the customer journey of awareness, consideration, and conversion we are attempting to influence. GPM provides a great single metric to measure our effectiveness monetizing ecommerce “foot traffic”. It also allows us to check if a change we are making in one stage of the funnel is inadvertently impacting another stage, e.g., increasing the adoption of price discounts inadvertently impacting the product selection sellers choose to list on the platform.
In ecommerce the capital required to develop and market a new brand are lower than ever before. Through content-driven ecommerce these digitally native brands are able to drive virtual foot traffic by tapping into the vibrant ecosystem of creators who are willing to monetize their viewership. However, the commerce side of content-driven ecommerce doesn’t “just happen”. Retailers and brands now have the opportunity to invest in learning how to develop the different types of content that can attract customers to their “virtual storefronts”, entice them to consider their offerings, and create the personal relationships that convert to sales.
