Opinion | Foundation of success: What can retailers learn from the LEGO approach?

As global pandemics go, the onset of Coronavirus, while forcing many to navigate a treacherously rocky road to begin with, hasn’t fared too badly for the toy industry; a global business that has provided support and entertainment to families and children worldwide. Among some of the last year’s biggest successes was LEGO, who achieved a 13 per cent growth on sales over the course of 2020.

With an eye for analysis, Utku Tansel LLB, MBA, an industry analyst who has led global research programmes across the entire toys, games, and licensed consumer products spectrum, turns his attention to the Danish toy maker and how shifting focus onto new and emerging audiences has helped the art of LEGO building continue to go from strength to strength.

While the COVID-19 pandemic is forcing some retailers around the world to close, LEGO opened 134 new stores – of which 91 were in China – last year. The company plans to open a further 120 new shops in 2021, including 80 in China alone, expanding its total global store count to almost 800 in 2021.

This is part of LEGO’s business strategy towards – what it calls an ‘omnichannel network’ – operating in tandem with LEGO.com, whose online visits doubled over the last year. This ties with Mintel’s COVID-19 tracker showing that nearly half of British consumers are now doing more shopping online – a double digit increase since mid-April 2020.

LEGO’s sales in 2020 grew by a substantial 13 per cent, while operating profit rose by 19 per cent worldwide. Its retail strategy is definitely working.

Merging online and offline


In terms of new product launches, the LEGO Super Mario set from 2020, which uniquely blends physical bricks with online games, has been one of LEGO’s most successful theme launches. The product line featured an interactive LEGO Mario figure that collects coins in real life game levels created with LEGO bricks. The figure has LCD screens in its eyes, mouth and belly to display a wide range of instant reactions to movement, colour and action bricks.

Meanwhile, and collaborating with Universal Music Group, the innovative company continues with this strategy in 2021 with the LEGO Vidiyo release –  which taps into kids’ creativity through music and play. Through LEGO Vidiyo, children can direct, produce, star in, and share their own music videos, using chart-topping tracks from Universal Music’s extensive variety of global artists. Its playful music video maker experience combines physical and digital play as special effect ‘BeatBits’ and music inspired minifigures integrate and come to life through AR in a vibrant new app.

Mintel Trend Extend My Brand investigates how brands are expanding into new categories and demographics to find new business as well as intrigue consumers. Brands are advised to assess the opportunity to use their company’s established image, visibility, and strong brand following to launch new product lines – which LEGO has been utilising very successfully in recent years. They are encouraged to explore new categories and price points that may cater to an extended clientele while still aligning with the brand’s identity.

Brick by brick, LEGO, which dominates the construction category globally, has been expanding its presence in toys targeting beyond its core business. In 2020, the company entered the arts and crafts category with the introduction of LEGO DOTS – a concept which offers kids a creative canvas for self-expression. Based on multiple shapes and colourful tiles, the line featured bracelets and items for home décor.

Targeting stressed-out adults

Aiming at adults, LEGO also released its 2nd 2D tile building theme, LEGO Arts, in 2020 featuring Andy Warhol’s Marilyn Monroe, The Beatles, Marvel Studios Iron Man, and Star Wars The Sith. Mintel Traditional Toys and Games, US, May 2020 report highlights that consumers need toys and games to bring more than just fun and brands can connect with adults by appealing to their need for wellness.

With products for adults that can tout stress relief and relaxation, each LEGO Art design is accompanied by a bespoke soundtrack. These soundtracks dive deep into the inspiration behind each wall art set helping adults unwind and fully immerse themselves in the building experience. Our consumer research (US, March 2020) confirms that there is a large market for toys and games for adults, since half of consumers who have purchased toys and games in the previous 12 months have done so for an adult.


Providing a unique retail theatre experience             

LEGO stores are a great example of retail theatre with plenty of life sized models and figurines as well as play stations. Their outlets are seen as a destination in their own right by consumers. Mintel Trend Experience Is All highlights that most consumers still put a premium on the advantages of shopping in-store, which includes the ability to try products in person and to be helped by customer service associates.

This trend is not about countering online sales, but rather turning shops into enjoyable experiences that promote purchases – either in-store or remotely. Retailers are reminded that shops are windows and adverts as much as places to purchase stock and they need to extend the time people spend there as well as the frequency of their visits.

So, what’s next?

Post-pandemic (or when the restrictions are eased), LEGO should be able to continue to build on its success. As I also investigated in my West End Farewells? – Regent Street’s Hamleys has met a modern cross-roads Opinion piece in ToyNews recently, for consumers, a shopping day out will continue to be a leisure activity and it will increasingly be a choice rather than a necessity.

Overall,the retail landscape will be leaner, the battle for consumer attention will be fierce and when the economy recovers, consumers will remain value conscious. In city centres, particularly, newer and better retailers are coming in which will undoubtedly help with the footfall into the high street, moving forward.

There is a huge opportunity and good retailers will continue to do well. LEGO is in a very good position to capitalise on these.

Utku Tansel has 17 years of success in driving global thought leadership, project and content management, delivering strategic business intelligence and insight to major international companies. He can be contacted via LinkedIn

Read the Toy Fair special issue of ToyNews today for plenty of licensing updates…

The Toy Fair special issue of ToyNews is ready to read online, on your smart device or iPad – giving you look at the year ahead and the trends that will be hitting the toy industry the most.

It’s the first ToyNews of 2020, and of the decade, making this not only – with London Toy Fair right around the corner – our Toy Fair issue, but also our chance to cast our predictions for what’s going to be setting the agenda for the coming year.

And it’s packed with news of all the latest developments within toys and licensing, too; whether that’s talk of Mattel’s Masters of the Universe, the latest good news story from the licensing powerhouse that is Games Workshop and the Warhammer franchise, or what plans Formula One now has for toys and the wider licensing space.

Of course, we’ll be diving into Spring Fair once again, and stop by with pop culture licensing specialists, Fanattik and Pyramid International to get their takes on the scene.

As ever, we kick off proceedings with the usual ToyNews wealth of ever-engaging and always exclusive content thanks to our Big Interview with Mattel’s VP and country manager, Michael Hick as we explore why 2020 is going to be a major year for the global toy powerhouse – and it’s not only with thanks to the return of He-Man…

Setting the tone for how we foresee bigger movements from the retail space, and the industry as a whole, towards inclusivity and accessibility for all of its audiences, we explore topics of autism and the toy industry, as well as games and puzzles and mental health, and all those wonderful people pushing this industry and the important messages ever-forward.

Our cover star of this month’s feature-packed issue, Generation Media, talks us through its evolution over the past decade, and, as we embark on a whole new one, sets out just what might be in store for the children’s media space.

As Asmodee UK announces its partnership with Mojo Nation to check out the art and design talent with the UK university student’s scene, we explore the topic of the evolving artwork of board games and tabletop titles, and how important it is to driving the success of some of the scene’s biggest sellers.

Of course, we at ToyNews like to champion the talent of the industry’s rising stars… and it turns out, you lot do too. This year, we have been inundated with nominations for our annual 30 Under 30 – sponsored by Gameplan Europe – making the task of whittling it down to just 30 a very difficult one indeed. It’s uplifting to see this industry continue to nurture and celebrate the talent of the up and coming generation, as well as to see the parameters of this business extending wider year after year.

Then, as Hornby turns 100 this year, we sit down with the hobby and model specialist to discover just how the team will be celebrating, and find out what plans this heritage and staple of British history and culture has got planned to continue to grow its audiences well into the future.

From one Great British success story to another, ToyNews talks exclusively to Games Workshop, a thriving retail, gaming, and licensing business that continues to go from strength to strength, as well as get the inside, exclusive track on Formula One’s plans to enter the toy space this year. Both making for a fascinating read this season – if we do say so ourselves.

There’s more to come still, as ToyNews dives into this year’s toy fair offerings with show guides covering Spring Fair, Nuremberg’s Spielwarenmesse, and of course, London Toy Fair.

On top of this, no ToyNews would be complete without its run of exclusive regulars, including the agenda setting opinions from industry voices, the latest industry insights, and our expert panel of retail specialists.

Read all of this and more here.