The Building Blocks of a Business Empire

By Lucy Wright

The pervasiveness of the coronavirus pandemic means that for many, 2020 will be remembered as the year we all went digital. From remote learning to working from home, the transition to online platforms as the primary mode of production and communication has transformed the everyday lives of millions across advanced economies. 

Like many trends we have witnessed over the past year, the pandemic has served as a catalyst for the growing tendency to equip increasingly younger children with devises such as smart phones and gaming consoles. A 2018 report by YouGov finds that by age six, 85% of children have access to a tablet at home with 40% having their own personal devise. That was before the lockdown which closed physical entertainment sites, not to mention schools and sports centres. The digital dominance of children’s entertainment is made evident in a 2020 report by RoosterMoney, a pocket money app and children’s debit card provider who observe the overwhelming popularity of online games such as Fortnite, Roblox and PlayStation among children aged 4-14. 

Alongside this growing trend, the traditional toy industry has faced challenges for a number of years. The collapse of Toys R Us into administration in 2018 signalled the death of the warehouse style toy stores that became popular in the 1980s and 1990s. While smaller, more interactive toy shops were forecasted better performance outcomes, for many bricks and mortar shops already struggling to compete with those online competitors offering manic parents convenience at a competitive price, lockdown will have struck a final blow. 

Yet, with increases in sales and profit during the pandemic, Lego, the world’s largest toymaker, subverts broader industry trends. Chief executive Niels Christiansen attributes the boost in revenue to investments made in the company’s product portfolio and online presence. The brand is still committed to opening dozens of new stores in China despite the global downturn. Meanwhile, industry competitors Mattel and Hasbro have not faired as well: both reported operating losses during the coronavirus crisis. The Financial Times reports that Mattel’s sales fell 14 per cent in the first half of 2020 while Hasbro’s underlying revenues dropped by 19 per cent

Lego’s enduring success is derived from the brand’s ability to captivate both the customer and the consumer. The enchantment of children is insufficient to ensure a successful exchange if their parent’s pocket is not behind them. Electronic toys are often an easier option for parents – typically portable, compact, tidy. The nature of their multiplicity in function means that they are unlikely to be quickly discarded, unlike the toy car which is played with once or twice before something newer, better, shinier comes along. Yet, RoosterMoney shows how the number one toy for all children aged 4-14 continues to be the humble building block – Lego. Not only does it captivate children, Lego is a brand parents trust. It has an educational element, sparking creativity and kinetic development while being broadly considered as good value for money. Many parents themselves have grown up with the brand, and may become overly enthusiastic in helping their children assemble the sets. 

The brand has dramatically changed since the first interlocking wooden building cubes produced in the workshop of founder Ole Kirk Christiansen. Derived from the Danish leg godt – play well Lego retains its charm while adapting to a changing industry. Lego has expanded its portfolio to include a diverse range of products for different groups. To capture children at all stages of life, Lego introduced their larger Duplo blocks in 1969, designed for children aged 18 months to 5 years. The bricks are easier to handle and less likely to be swallowed by younger ones. In 2012, the brand released their Lego Friends range, particularly aimed towards pre-teen girls. The company has also secured collaborations with brands such as Harry Potter, Disney and Star Wars, with many of these sets selling at a relatively high price point. 

Dubbed the ‘millennial past time’, a growing trend for adults to indulge in nostalgic, childhood activities such as playing board games and completing puzzles led Lego to recognise the joy their products bring to those who are young at heart, with many products now being directly targeted to their older consumers. Such sets tend to be more complex and often more expensive too. To capture a customer in childhood and retain their custom throughout their later years not only speaks volumes to the strength of the brand, but to the quality and experience offered by their products. The popularity of adult colouring books suggests a demand for therapeutic activities geared towards busy adults. Building Lego demands intent focus and concentration; in our fast paced age of digital dominance and information overload, the attraction is obvious.  

Even before the pandemic exacerbated the retail crisis facing our high streets, Lego embraced the experience economy. The interactive nature of their stores meant that shopping for Lego was itself a form of entertainment. Many adults and children across the UK will have fond memories of visiting Legoland in Windsor, England. In 2019, the park had 2.43 million visitors, making it the second most visited theme park in the United Kingdom behind Alton Towers. Cementing the brand at the centre of childhood wonder is a powerful marketing tool that appears to have worked successfully for the Danish brand.

2020 signalled a new height in our digital age. From curating a persona on social media to the escapism offered by sites such as the Sims – Lego has kept us enchanted by the worlds they have built for us to build, offering an alternative to the digital ones where we now primarily reside. 

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