After a rollercoaster year, Danish toy giant Lego’s online sales are now on par with its in-store sales, according to Katharina Sutch, Lego Group director for Shopper and Omnichannel Activation. “This is the most interesting 18 months and we’ve seen growth in all areas of the business. Fifty per cent of the toys we sell now are online, 50 per cent in-store,” Sutch said at the FUTR Europe Summit last week. “Our teams had to react and work fast to meet this demand, but unfortunately, we
y, we can’t produce faster because there is a set amount of bricks that we can produce across the world. But I have to say we’ve been very fortunate that we’ve had a very, very strong year because much of our business went online.”
Sutch said the latest sets that Lego has launched are now over-delivered and have far exceeded their expectations in terms of sales.
Despite Lego shutting down its manufacturing sites in Mexico and China, temporarily closing some retail locations, and the rise of distribution costs, the company still reported a 13 per cent rise in revenue to US$6.99 billion, compared to the previous corresponding period.
Lego’s sales benefited from people spending more time at home during the pandemic, posting a 21 per cent jump in sales last year due to its e-commerce investments paying off, the introduction of a broader product range, and a surge of growth in the Chinese market.
Visits to the company’s site doubled from the previous years when customers gravitated towards online shopping.
“More and more families were building together during the pandemic,” Sutch explained.
During the pandemic, Lego tried different approaches like click-and-collect and curbside pickup.
“We didn’t have everything perfectly solved, we just gave things a try and shoppers were so willing to accept it because they were thankful to actually have that access during the pandemic. And for that we were grateful,” she said.
“I think we, as people and shoppers as well, have gotten a little bit okay with not having everything working out straight away but having that interaction, that service, and being super appreciative about it.”
Catering to different shopper mindsets
According to Sutch, Lego studied the global mindsets of buyers to map their purchasing journey, which helped them better target these people even while online. These different mindsets include:
1. The focused toy seeker, who is single-minded and already has a key occasion or a particular product in mind. And no matter the price, that toy seeker will pay for that;
2. The buyer who bought for a fun diversion and was instantly inspired to purchase a toy;
3. The buyer who buys the brand because that shopper wants what is hot and trending;
4. The budget shopper who has a set amount in mind. These shoppers are particularly prevalent in Asia, says Sutch;
5. There are also the impulse buyers who buy toys after looking at a price and its perceived value;
6. The big spenders who do extensive research on a wide range of products who want to spend money on a quality product.
Lego’s ongoing omnichannel challenge
According to Sutch, it is Lego’s dream to offer shoppers a seamless omnichannel experience. At present, the company is not quite there yet.
“It would be everyone’s dream as a shopper to know that if I want a specific product, I would be able to pick it up at a store or online. I always ask, ‘What do I want as a shopper?’ Ninety per cent of shoppers would probably check the website before going to a store and of course, the next stage would be if ‘I do go to a store, would it be available there?’,” she said.
“We are definitely not a hundred per cent there yet, but I think this would probably be the biggest win for companies.”