Lego: An Example of Success during the Pandemic
LEGO Continues to Build on Its Success – by Utku Tansel LLB, MBA – Analyst
Despite the COVID-19 pandemic forcing 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 LEGO shops in 2021, including 80 in China alone expanding its total store number to 798 in 2021.
All 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 with Mintel’s COVID-19 tracker showing that 47% of British consumers are now doing more shopping online, an increase of 11 percentage points since mid-April 2020. As sales in 2020 grew by a substantial 13%, (6% growth in 2019), and operating profit rose by 19%, its retail strategy is definitely working.
In terms of new product launches, LEGO’s Super Mario set in 2020, which uniquely blends physical bricks with online games, has been a huge success. The innovative company continues with this strategy in 2021 with this month’s LEGO Vidiyo release which taps into music and play. 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 leverage their company’s established image, visibility, and strong brand following to launch new product lines. 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.
LEGO’s recent results confirm that some retailers are continuing to perform well despite the pandemic and that online and physical stores are very much complementary to one another.
As I also investigated in my “Retail and E-commerce: The Impact of COVID-19 in the UK” Opinion piece previously*, for consumers, a shopping day out will continue to be a leisure activity and it will increasingly be a choice rather than a necessity. Shopping locations are simply evolving as they always have and inevitably, there are winners and losers. Some of the retailers that have disappeared in the last year are ones that had already been struggling and the pandemic has simply accelerated the trend.
Utku has 17 years of success in driving global thought leadership, project and content management, delivering strategic business intelligence and insight to major international companies. Throughout his career, he has led many global research programs across a wide range of diverse and dynamic industries including Toys & Games, Licensed Consumer Products, Consumer Electronics, Apparel & Footwear, Homewares & Home Furnishings, and Personal Accessories & Eyewear, and he has always been a firm believer of “knowledge is power”.