How American Girl Built a Multigenerational Business Empire with Dolls

It was 21 years ago when I got my first American Girl Doll. As any typical 10 year old does on a July summer day, I was curled up behind my bed doing some summer reading (The Secret of Nimh, in case you were wondering).

The doorbell rang, and my older brother came running up the stairs enthusiastically shouting “IT’S HERE! MARIA!”

The jump in my stomach, the shriek in my voice, the desperate scrambles to get out of my reading hovel without losing my page….it’s like it was yesterday.

My American Girl Doll had finally arrived. Her name was Molly, and we were going to be the best of friends.

Fast forward 21 years and I still have Molly. She is sitting on my bookshelf, in a casual yoga set with rhinestones in true Y2K fashion. As with the rest of the world, I organized my garage during the long months of quarantine and repackaged all of my childhood belongings. Which included lovingly labeling the multiple boxes of American Girl paraphernalia I excitedly received every birthday, Christmas, and Valentine’s Day from 5th to 9th grade.

Despite now being the wise old age of 31, I am still annoyed with my mom for not letting me go to the American Girl tea party because I had bronchitis those many years ago.

Honestly, I could go down a whole nostalgia rabbit hole, but I don’t think my editors would like that. So instead, riddle me this – how is it that a child’s toy (a doll, for that matter) has managed to remain an empire for so long?

The American Girl Empire: A Brief Overview

The American Girl company built an empire. Like we talk about all the time with the importance of a dedicated online community for social media, American Girl did that with their brand-loyal buying community. What started as a simple product offering – dolls – has turned into multiple branches of the company. I’m going to attempt to give you a “brief” overview of the empire and its branches before we delve a little deeper into various aspects of the company. 

Doll Empire

Initially, American Girl Doll offered dolls based on history. Each doll had a historically rich background, accurate accessories for their time period, and a book series per doll outlining all of the doll’s adventures. 

As the company grew and evolved, there were more opportunities for dolls to be like their human owners. That is when small customization options opened up, as well as a variety in clothing, accessories, furniture, and even pets came into play. 

Pretty standard stuff so far, but here’s where it gets interesting.

Then there was the entire doll experience for child, adult, and doll alike. Doll needs a repair? They are sent off to a special doll hospital and returned with “hospital documentation”.

Little girl wants to go to a tea party? There will be doll-sized chairs and branded tea sets.

Want to go shopping? The little girl is treated just as well as the wallet-toting parent. 

American Girl started with dolls and knew that it was their bread and butter. It was the foundation to the empire and continues to this day to be their strongest asset. 

Magazine

American Girl was already involved in print as they had the book series to pair with each historical doll. But there was an opportunity to connect further with their customers as magazines became popular with young girls. 

In 1992, the first issue of the American Girl Magazine hit the printers for a January ‘93 print date. Girls between ages 8 and 14 received a twice a month magazine that held all sorts of age-appropriate articles, advice columns, and fiction stories. Issues also included activities such as recipes and arts & crafts ideas. 

I remember reading one of the magazines on my bed at the beach. The first Harry Potter movie had just come out. American Girl interviewed Emma Watson and I got to read about how a girl my age took a chance and auditioned for a role in a movie. It was a way to show me I could do anything, all while not planting a seed of jealousy. 

The advice section discussed subjects that little girls (and boys) might have felt uncomfortable discussing directly with their parents. The magazine acted as a great opportunity to bridge the gap. Subjects such as puberty, bullying, and emotions turned into the Care and Keeping of You series. Now there is a fantastic new series called Smart Girl’s Guide that tackles even more complex subjects such as race inclusion, crushes, and middle school (why didn’t that last one exist when I was that age!). 

The magazine had its last issue released in 2019, but the spirit of the magazine continued on into different mediums. 

Events & Online Resources

As I will discuss a lot throughout the article, American Girl puts a focus on experience, whether that be in person or online. 

In person, events include elaborate tea parties with doll-sized chairs and sets to match. Today it is more of an in-store experience that might include a makeover or even doll-friendly sleepovers. But what is not included is any embarrassment of being caught with a doll. Because at American Girl, dolls are everything. 

Online, virtual reality includes museum tours or even shopping excursions from a screen. No masking required. There are games, educational videos, and even kid-friendly musical pops. In fact, American Girl now has an app so kids can enjoy all the magic of AG on the go. 

Now that you know a little more about American Girl, let’s dive into why I think the American Girl Company has become what it is today, and why it is going to stick around for another while longer. 

A Parent’s Perspective

When I was preparing to write this article, I called my mom as I wanted her perspective when buying my beloved Molly American Girl doll. For some background, we were living in Saudi Arabia where a single Barbie Doll equated to $50 US dollars in the ’90s.

I had what most would consider to be an untraditional upbringing for an American girl. However, my family did not let living almost seven thousand miles away from the United States keep us from learning about our home country. We did Scouts, had the Washington DC Monopoly game, and were Highlights Kids subscribers. But despite my parents’ attempts, they couldn’t change the fact that the culture surrounding me did not provide as many opportunities for girls as in other countries.

So when we were getting ready to move back to the States and I begged my mom for this new doll called an American Girl Doll, Mom actually considered it despite the high price tag.

Mom said that at first, she couldn’t believe how outrageous the doll cost ($150 for 1 doll and book). And remember, Barbies were in the $50-75 dollar range at the time. So she figured I could get the single doll, and disregard all the extra “things”. After all, those add-ons could quickly total to the $500-$600 range. But the more she looked at the American Girl catalog, the more she saw an opportunity.

The doll I selected was Molly McIntire, whose story was set during World War II with her father serving as a medic in the US Army Medical Corps. This piece of US history was especially interesting to Mom as she was much more willing to pay top dollar if it was an education item as well. Pair that with accessories Mom would have wanted as a kid, and American Girl made a nice little sale off Mom.

After the products came in and Mom saw the quality (we’ll get to that), she was blown away. Suddenly it wasn’t just buying me a toy, but it was buying an educational toy that could also be passed down to the next eventual generation. Meaning, my mom saw these toys as an investment rather than something to keep me entertained for a summer.

As I started to get involved in different hobbies back in the States, American Girl had just the thing to keep my Molly doll right there with me. I wanted to continue with taekwondo, but that wasn’t something girls in the US did much. But that didn’t matter, because my Molly doll got her very own set, belts and sparring pad included. When I got into horseback riding, they had stunning horses with all the appropriate accouterments. Joining band? Molly got a violin.

Founder Pleasant T. Rowland leveraged her love of American History when she wanted to create aspirational characters to inspire little girls that they could make a mark on the world. This passion, combined with high-quality educational products, captured my mother’s wallet for years to come.

To summarize, it was the combination of the following things that turned my mom from a scoffer to a loyal customer:

• Educational Tools
• Quality of the Products
• Bonding experience with my mom and friends
• Diversity and female empowerment
• The items were things that she herself would have loved to have as a child

Quality

Let’s get back to the Quality, shall we?

Remember the age-old phrase “you get what you pay for”? Typically it is muttered after a new trinket breaks about 0.2 seconds after purchase. But the same piece of advice can apply to items in a more positive light, and that is certainly the case with the American Girl empire.

AG is not what anyone could possibly call inexpensive. But it also isn’t unattainably pricey, considering they have specifically built the products to last. Personally, I appreciate a company that chooses to build its business on quality versus a quick product turnover. And it is this same quality-over-turnover value that I believe contributes to them having a lasting and brand loyal customer.

My mom became a repeat customer because she knew the toys were going to last for a very long time. In 2018, First Insight did a study on the importance of quality over price and the results were just what we know to be true – consumers are willing to pay more for a higher quality product or service.

The desks are made of real wood and metal. The horses have weight to them. In fact, the hair styling products you can buy for your dolls actually work on real human hair too (because, yes of course I put the curlers in my bangs to see what would happen).

When I think back to all the products I received over the year, I think the only lackluster product was one of the pets. It was an early product using a different type of material for the animal’s coat, and I remember it seemed a lot cheaper than the other products. But guess what – it ended up later getting removed from the line and replaced with a higher quality product. 

The violin I mentioned earlier? Yea, the bow came with resin and the strings worked. It wasn’t exactly a perfectly sounding violin, but you can’t have literally everything in the world. And my mom was still able to play Mary Had a Little Lamb on the tiny stringed instrument. 

Now at the ripe old age of 31, I can appreciate this mindset of quality over low cost. I bought a washing machine that was on the lower end of the price scale about 8 years ago. It now sounds like a plane trying to take off. As I google the cost for a replacement, I know I’m willing to spend a few hundred extra dollars to ensure that my new machine will stay in place on the spin cycle without detachable panels. 

Repeat after me: Quality over Low Cost. 

Knowing their Client

Another pillar to the American Girl way is being keenly aware of who their client is. They need to capture the hearts of a child, and the wallet of an adult. Luckily for AG, these two things have a symbiotic relationship. 

A Doll is More than Just a Doll

They know that if they want to get into the parent’s wallet, then they need to hook the child’s heart. Therefore, just about every business decision the company makes is focused on a child’s resulting joy. 

The colors are bright and fun. The dolls are treated like they are lively girls, rather than plastic and cloth. Even when a doll is customized, you can specify their “personality” through Name, Favorite Place, Favorite Things, and Pet Pal (more on this under “Custom Dolls”). 

I’ve practically sung my praises of the quality of the American Girl products and how they are built to last. BUT we also know the wear and tear a beloved toy can take when they adventure alongside their human. So American Girl not only has a doll hospital, but they make it look like a luxurious experience for the doll in order to calm a worried child’s nerves.

Girls Just Wanna Have Fun

If this article were a movie, then here is the “shopping mall montage” part that everyone loves whether they admit it or not. 

When you look up an American Girl store, it isn’t just looking for a store like you would look for a Target (not that I’m hating on Target). You are looking up an experience, and they know it. In fact, the name on their online menu bar is “Store Experience“.

Here are the menu options under their Store Experience:

• Makeover Magic: From a new ‘do to a little sparkle, our salons give your doll a look that shines – and at select stores, girls get pampered, too.
• Dining that delights: Get a taste of the excitement with girl-friendly cuisine and seats designed for dolls to join the fun.
• Celebrations that take the cake: Thrill your girl on her birthday – or any day – while we take care of everything for a party she’ll never forget.
• Care and repair beyond compare: Play on with treatment from the Doll Hospital, plus girls can enjoy make-believe medical fun.
• Make it a sleepover: Check out overnight packages from hotel partners that feature beds just for dolls.

Despite decreased visits to flagship stores, and having to close other locations all due to the pandemic, American Girl still managed to find safe ways to keep the American Girl Experience alive.

Every single business offering American Girl makes has a child’s heart in mind, knowing that if the service is good enough then the parent will pay top dollar. 

Keeping up with the times

Custom Dolls

American Girl might have started with Historical Dolls, but they have grown into incorporating dolls of the present and future. As more complex social changes occur, American Girl is able to evolve.

I remember picking Molly because she had glasses, liked to read and play outside, and had plain brown hair just like me. But now girls can easily customize a doll of their choosing. Back in 2001, the way to customize was by picking hair, eye, and skin color through a magazine catalog. 

Now girls can choose so much more. Skin tone, eye color, freckles, braces (yes, braces), hair color and texture. Apparently, there are more than 2.4 million possible combinations.

And over the years, doll customizations and accessories have only become even more inclusive. I get giddy at the thought that now little girls can order a doll that has a hearing aid. Is that not the coolest?

Inclusivity doesn’t stop with doll customizations. There are accessories for the dolls to match their humans. For instance, there is an “Asthma & Allergy” set so your doll can carry around an Epi-Pen too. There are also wheelchairs, arm crutches, and service vests for their doll’s dog.

Girl of the Year

There are also 4 “Girl of the Year” dolls dating from 2018 – 2021. Each has a distinct background like the Historical Characters, but are set in the present day illustrating that girls can make a difference.

2018: Luciana Vega

Find your mission and set your mind on achieving it

Luciana is a girl after my own heart, rocking a purple streak in her hair like she just don’t care. Want to know what makes her an even better role model? She is an aspiring astronaut ready to take humanity’s next giant step on to Mars. 

2019: Blaire Wilson

Connect to your creativity and watch relationships bloom

I like to think of Blaire Wilson as a child version of Dana Sue Sullivan from the Sweet Magnolias series. Blaire is a “chef-in-training, party planner, and chicken wrangler at her family’s farm and restaurant.” And if you think that a party planning cooking girl is too “stereotypical” for you, then keep in mind that only 24% of US Chefs are female. 

2020: Joss Kendrick

Fly high, defy limits, and discover the new you

Girls don’t have to be a tomboy or a girly-girl. They can be whoever they want to be without a label. And Joss will be right there with them, whether it is catching waves on her multicolored surfboard, or trying out for something new like cheerleading.

2021: Kira Bailey

Animals in need have a Friend indeed

Have a little one that loves animals? Then maybe give this year’s doll a look. Kira’s story starts with her spending a month at her Aunt Bailey’s Wildlife Sanctuary in Australia, helping care for Australia’s unique wildlife! Just because she is a kid doesn’t mean that she can’t still make an impact, especially when a baby wombat escapes and Kira attempts a midnight rescue!

Why American Girl Has Made it 35 Years and Counting

American Girl has a sense of purpose, and they live by it

Here is their stated purpose. It pretty much tells you any and everything you need to know about this company:

We celebrate girls. Bringing out the joy of girlhood is at the heart of everything we do. Through adventurous stories and imaginative play, we give girls the chance to discover who they are—and who they’re meant to be. No matter if she’s a toddler or entering her teen years, every girl can find inspiration to be her best, to grow a strong mind and spirit, to laugh while she learns to be resilient, confident, and kind. Most of all, we hope to open girls’ eyes to a bigger world so they can create a brighter future for us all.

American Girl website

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Perhaps I’m just a jaded individual, but I feel like vision and mission statements are often just a checkbox for companies. Something that the CEO learned about in school and knew it was a checkbox to do when setting up a company. But American Girl…they actually seem to live and breathe their mission statement.

American Girl intuitively understood the importance of an unboxing experience before YouTube even existed

Look at that branding.

It’s essentially just a star. But I’d recognize that American Girl star anywhere. It might have different colors based on the packaging, color of the hanger, etc. But it is always that double star.

Why do I remember something so plain and straightforward?

American Girl understood the power of an unboxing experience before “unboxing” was even a thing. I still have some of the original boxes and tissue paper that the clothing came in. They didn’t mail the doll clothing in a plastic sack-like when you order clothes from an online retailer. 

Each item is lovingly packaged in a tissue paper-lined box. It got to the point where I could tell what a package was based on the shape of the wrapped gift because they were so consistent with their boxes. Because what is American Girl? Quality.

They know the power of branding. They have branded color palettes. The star within a star. The font. The general look and vibe to their catalogs, photoshoots, and dolls. When I was first looking to see if they had a Spotify station, I saw the star and instantly knew that it was the real deal. They know that the brand they built back in the late eighties would stand out even now. 

American Girl understands both its audiences – the parents and the kids

We already talked about this, but remember that American Girl caters to both the child’s imagination and the parents’ pragmatism. Even upon opening their website, users have to identify if they are parents (shopping) or kids (free online play).

A few additional features that American Girl has come out with to show their value to parents is by creating safe spaces within the internet. When American Girl was growing in popularity in the early 90s, not that many kids were on the internet (compared to now).

Fast forward to 2021 and kids have their own Netflix profiles, and Spotify automatically connects to cars via Bluetooth. So AG has managed to stay relevant with a physical toy by bringing their stories to life in streaming services and music.

On the American Girl website directly, there is a section called “AG Play” that offers a variety of inspiring or educational videos, as well as games, and safe interactive play. The videos range from shows about the characters to a virtual tour of the American Girl museum. 

American Girl can also be found on two big-time streaming services. Netflix currently has “McKenna Shoots for the Stars”, but is frequently switching out their branded AG content. On Spotify, kids listen to branded American Girl music that is chock full of encouragement and child-friendly messages. 

So who is the customer? They know that a happy and safe child equates to a happy parent. 

American Girl differentiated itself from the reigning champion, Barbie

This can’t be a marketing post if we don’t talk about other major players in the industry. And what other well-marketed doll comes to mind? The one and only Barbie. After all, she is the most iconic doll that ever graced the world. And funny enough, they have more in common than you might realize.

Mattel, the owner of Barbie, acquired The American Girl company in 1998 just after they branched out for experience stores. I didn’t actually find this out until I went to research Barbie for this article and saw that they had the same parent company. But if you think about it, it makes total sense. They are both branded incredibly well, they both encourage imaginative play while also having safe online and streaming content. Additionally, they both have navigated the ever-changing social climate and how that relates to young girls’ minds.

Women should support women. So when comparing Barbie and AG, I would like to look at how their similarities have slight but impactful differences

They both are dolls. They both have accessories galore. They both have matching clothes for doll and girl alike. Both have managed to maintain a loyal customer base and they also have both grown with the constantly changing social environment. Heck, both brands even have their own knock-off versions.

But they also have some very different price points and quality and I think that is a major difference between the two. Barbie Dolls are almost always doomed to a haircut, marker, and the accidental beheading (a superglued head just isn’t the same). Also, I lost loads of their shoes like when the dryer eats just 1 sock. But American Girl dolls are less likely to fall to a similar fate. And even if they do, there is the spa-like Doll Hospital just a mailbox away.

But knowing that they are both Mattel products…it makes absolute sense. Mattel is able to reach two massive demographics – those who are able and willing to spend more on a few higher quality products, and those who either have a smaller budget or perhaps just like the smaller sized product. So one product line is not better than the other, they are just different. At the core, both Barbie and American Girl celebrate girls and empower them to be whatever they want to be. And that is all that matters.

Final Thoughts

If you haven’t caught on by now, my slant in this article is that American Girl is an empire that is not slowing down. I firmly believe that their 35 years of success will continue on for another 35 years and will solidify them as a multigenerational customer base. A pretty big statement, I know. 

And before you mention it, yes I am aware that over the last 4 years American Girl sales have been slowly dropping, with a big loss of 20% in the fourth quarter of 2019. BUT guess what I also saw. Their sales are going back up because the company got creative with direct-to-consumer opportunities and having the conglomerate Mattel acting as their engine. 

UBS analyst was quoted in a Market Watch article: “We had tagged American Girl inflecting to growth as one of the key catalysts for our Nov’20 upgrade of the stock […] Direct to consumer represented an astonishing 75% of sales for the brand.”

So yes, I feel good in stating that the American Girl empire is here to stay for a while. They provide their clients with high-quality educational products that focus on a child’s experience but also consider a parent’s shrewd purchasing eye.

There are valid ways for American Girl to remain relevant on their own, but should tough times happen the company has Mattel to help chug them along to more prosperous times. If they keep doing what they are doing, while also pivoting quickly (such as how they handled the pandemic) then I think there is a very good chance that I will be ordering accessories for my own daughter’s American Girl dolls.