Barbie-nomics: How Barbie Controlled the Market

After the hit blockbuster film directed by Greta Gerwig, Barbie has spearheaded the economy with an increase in consumption, grossing almost $1.4 billion globally. As many were excited about a new Greta Gerwig movie, thanks to the popularity of Ladybird and her adaptation of Little Women, they were willing to show love for their favorite childhood doll. The weekend of release made over $162 million in domestic sales and ranked 11th at the box office for “Top Lifetime Grosses”. However, this level of success was no easy feat. Many factors contributed to the impact of this movie. 

Margot Robbie, co-writer and lead actress, actively pitched the idea of a live-action adaptation of the world-renowned and iconic toy. Much difficulty revolved around the unrealistic beauty standards of the original doll, typically seen as a thin white blonde woman, and received substantial backlash. However, throughout the years, Mattel released Barbies in numerous professions, including but not limited to doctors, astronauts, businesswomen, and even the President. This was a way for girls to project their dreams onto something as simple as a doll. In 2018, the Barbie movie was approved and announced that Margot Robbie would star as the titular character and Greta Gerwig as director and screenwriter. 

Most notable about the movie was its marketing. Barbie was praised for its resourceful marketing department, having billboards, press tours, interviews, and constant teasers. They began promotions with character posters of their impressive cast and comparisons with an opposing movie released on the same day. This contributed to the phenomenon of “Barbenheimer” and a significant increase in sales for both movies. The simultaneous release of Barbie and Oppenheimer made many fans excited for the extreme contrast in movies, as well as the directors being Greta Gerwig and Christopher Nolan. 

Additionally, the marketing team relied heavily on promoting the movie with pink billboards and painting a bench pink. Since Barbie is heavily tied to the color pink, the production of the movie contributed to a worldwide pink paint shortage. This news spread like wildfire through social media, getting viewers excited about the incredible design production and commitment to replicating “Barbie World” and Barbie’s Dreamhouse. Alongside the dedication to the production set, the producers of Barbie and Mattel worked on brand deals, having collaborations with big names such as Xbox, GAP, Target, Beis, MOON Oral Beauty, as well as many others, and selling Barbie merchandise. The Barbie production team also turned an entire floor of a hotel into a Barbie-themed hotel by replacing furnished items with pink alternatives, including pink carpets, pink doors, and pink couches. Another massive marketing stunt was the Malibu Dreamhouse which was built in Malibu and sold as a place to stay on Airbnb. The pink house was designed with impressive features such as an outdoor pool, a dance floor, and a fully stocked closet. 

With the movie undergoing production, the movie budget was about $145 million for production and $150 million for promotion. After movie production, Mattel boosted in sales, where Barbie doll sales jumped 14%, while their competitors, such as Hasbro, have decreased shares by 20% and cut over 1,000 jobs. On the other hand, the Barbie production opened up several job opportunities for the movie as well as jobs at Mattel itself. Additionally, the AMC theaters have seen their fourth highest-grossing and busiest week during the release of the movie. AMC shares have grown 26% following the “Barbenheimer” weekend. It is predicted that Barbie, alongside the success of Oppenheimer, will boost the U.S. GDP by $3.5 billion from consumer spending. This also has encouraged spending on entertainment outside of the theaters, such as concert tickets and streaming services. 

Bank of America reports state that cardholders spending on entertainment increased 13.2% since last year and a 4.9% increase within the week of Barbie’s release. The Federal Reserve in New York claims reports that due to this the credit card debt is at an all-time high. As wages increase and the unemployment rate at 3.6%, this is causing a wage-price spiral where prices are increasing as the labor wage increases. 

However, economists believe that after the heightened popularity of the movie, there will be a slowdown in consumer spending. The strong growth in the economy could lead to an increase in inflation and require a response with monetary policy. The success and increase in spending have prevented a recession in the economy, but this was a short-lived boost.