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LEGO sets get a new look, keeping toy industry going | Real Time Headlines

On March 7, 2022, a customer picked up a box of the LEGO Dots series at the LEGO A/S store in London, England.

Bloomberg | Getty Images

The toy industry is facing a second straight year of declining sales, but one factor is holding it back: colorful, interlocking plastic building blocks.

While toy companies are struggling to catch up with huge sales gains in the pandemic era, Lego is growing rapidly. Danish companies see Revenue grew 13% in the first six months of this year and continue to capture market share.

Eric Handler, managing director of Roth MKM, said: “Lego has driven all the growth in the industry this year in terms of toy sales.”

After arriving On the brink of bankruptcy in the early 2000sLego has reinvented its business and diversified its customer base, helping it boost sales even in inflationary market conditions.

Lego has posted positive growth in each of the past six years.

Its strategy includes delving deeper into licensing, catering to both adults and children, entering the world of digital gaming, partnering with studios and streamers to bring LEGO content to consumers, and establishing manufacturing bases near distribution centers to smooth the supply chain.

The latest standout among its tried-and-true product portfolio are its newly emphasized “passion point” kits, which appeal to a variety of consumers, from those obsessed with Star Wars and Harry Potter to the likes of range of consumers to car enthusiasts and animal lovers.

“Lego has been bucking the trend over the past few years,” said James Zahn, editor-in-chief of The Toy Book. “When other companies have fallen, Lego has tended to rise.”

Zahn noted that LEGO’s ability to “stay ahead of the curve” allows it to be more nimble in times of inflation (when consumers tighten their wallets) and respond to turmoil in the theatrical entertainment industry and even looming tariff increases.

“I think maybe the most important story here is that they do seem to be two or three steps ahead of everyone else,” Zahn said.

entertainment licensing

From miniatures of the Emerald City in Wicked to versions of Wednesday and Enid’s dormitory in Wednesdays starring Jenna Ortega, LEGO taps into pop culture to bring fan-favorite stories to life in brick form Bring it to life.

Licensing has long been an important strategy for toy companies. Through existing and upcoming intellectual property rights in movies and TV shows, brands like LEGO are able to tap into an already strong and engaged consumer base.

A LEGO set based on Netflix’s Wednesdays.

Lego

LEGO’s first licensing partnership was in 1999, when it teamed up with Lucasfilm to bring Star Wars sets to the public. Some of the kits are tied to the release of Star Wars: Episode I: The Phantom Menace, while others celebrate vehicles and characters from the original trilogy of films.

“Lego has embraced adults for a long time. Before we start talking about “children” They find ways to continue that in new ways,” Zahn said.

Over the past two decades, LEGO has worked with hundreds of other partners to bring Harry Potter, The Lord of the Rings, Ghostbusters, Marvel, DC, Jurassic Park and Pixar titles to life Convert to building blocks.

More recently, the company has released kits like the Sanderson sisters’ house in Hocus Pocus and even a Jaws kit featuring the iconic shark that shot down Quint’s ship.

“For the LEGO brand, (we’ve seen) tremendous growth over the years,” said Julia Golding, LEGO’s chief product and marketing officer. “We made a very thoughtful decision to unlock our potential with a lot of new audiences, double the ones we already have, and really make sure we’re very connected.”

Looking for new bricklayers

LEGO doesn’t just stop at franchise-based sets.

Zahn said the company has been working on designing different types of sets to cater to new audiences who might not otherwise buy or build Lego sets. These include cityscape sets featuring skylines from London to New York, brick-built versions of famous paintings such as Vincent van Gogh’s “Starry Night” and Leonardo da Vinci’s “Mona Lisa” and a range of plants.

Golding noted that Lego is “investing in bringing new audiences to the product portfolio” and creating more products for them.

Lego icon small plant.

James Manning – PA Images | PA Images | Getty Images

That’s why LEGO has teamed up with Formula 1 to create a range of F1-inspired sets, ranging from Duplo sets for preschoolers to collectible sets for adults. The partnership will also cover Lego’s digital platform, with the toy company participating in future F1 racing events.

Golding said previous automotive products, including McLaren LEGO sets, had performed well at retail, giving LEGO the confidence to explore the racing space more deeply.

“We always start with the audience,” she explains. “We’ve been looking at what do kids like? We’ve found that F1 is one of the number one passions among young kids and it’s growing globally, attracting a lot of new audiences, especially women and families.”

Attracting new consumers allows Lego to grow revenue and help balance weakness in the theatrical segment.

The toy industry’s current sales woes can largely be attributed to production-line disruptions in Hollywood. The global pandemic and ensuing labor strikes have reduced the number of new products in the tinsel town that could have been the basis for a breakthrough toy.

The lack of children’s movies in particular means that toy companies can’t produce as many new action figures, role-play items and other movie tie-ins.

But by 2023, Lego offers 780 products, about 50% of which are new, the same as in recent years.

Going deeper into digitalization

Meanwhile, Lego has outgrown its retail shelf space.

The company has launched several of its own theatrical features, partnered with streamers like Disney+ to bring Marvel and Star Wars content to the small screen, and even launched its own version of Epic Games’ popular Fortress Heroes game vertical game.

The expanding product portfolio keeps LEGO at the forefront of consumers’ minds, providing them with additional ways to interact with the brand and driving incremental retail purchases.

“We have to remember that children always grow up,” Goldin said. “So there’s a new generation emerging. I think in the next five years we’re going to see a lot more digitalization and interactivity being incorporated into the different experiences that we can create.”

Goldin said that with Fortress Heroes, the company’s goal was to transcend the setting and create an experience. In Fortress Heroes, a massive game, players can participate in a LEGO-based world where they can build digital LEGO buildings, battle creatures, customize online minifigures and socialize with other LEGO fans.

LEGO CEO Niels Christiansen repeat praise The importance of meeting kids, noted in previous earnings reports, is that the company is competing for their time and attention. Being associated with them and the space they already occupy has translated into sales of physical LEGO kits.

It’s a similar strategy that LEGO has used in its partnership with Disney+ on several Star Wars and Marvel animated shows, as well as the recent theatrical release of a feature-length animated documentary about Pharrell Williams, “Slice by Piece.”

The LEGO Star Wars: The Skywalker Saga game allows players to relive the epic story of the Skywalker Saga through the lens of hilarious LEGO humor.

LEGO | Warner Bros. Games | Lucasfilm

“We feel like (Piece by Piece) is really something super original,” said Jill Wilfert, LEGO’s head of global entertainment partnerships and content.

“We hope to attract a wider audience to engage with the brand,” Wilfert added. “So, we thought this would help us achieve that. When we do entertainment for our family, it’s really about doing things that help us really communicate our brand values ​​in a super entertaining and relatable way, but it’s also something that our family, People, friends can experience it together.

Wilfert said Lego is developing several theatrical projects that could make their way to the big screen in the coming years.

In the meantime, the company plans to continue releasing episodes and shorts tied to existing shows Netflix, Nickelodeon and YouTube.

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