Record Highs

LEGO Sales & Profit Reach Record Highs

Cementing Its Position as One of the Biggest Winners of The COVID-19 Pandemic

2021 was an extraordinary year for LEGO. Its global sales increased by 43% to hit £2.6bn ($3.5bn) in the first six months of the year while profits rose by a whopping 140% during the same period. The company announced that its sales were up by more than 10% across all markets while online sales rose by 50%. Top performing themes included LEGO Star Wars, LEGO Harry Potter and LEGO City.

The company opened more than 60 new branded stores in the first half of 2021, over 40 of which were in China. This brought the total number of LEGO retail stores to 737 as of mid-2021, with 291 of those located in China. This is part of LEGO’s business initiative towards what it calls an ‘omnichannel network’, operating in tandem with LEGO. com.

LEGO’s announcement did not come as a surprise to many in the industry as shoppers stayed at home even after lockdown continuing to spend on both for themselves as well as their kids. After the holiday season, the growth should stabilise to more sustainable levels while consumers return to pre-COVID spending habits.

In the UK, these news stories had come amidst rising concerns around stock shortages around the Christmas period caused by the ongoing driver shortage as well as higher transport costs. Previously, LEGO had addressed part of the threat by revealing that the company had secured enough shipping containers to keep up with the demand over the holiday season. By Utku Tansel

LEGO continues to build on its success with its ‘Retailtainment’ strategy

LEGO’s first ‘Retailtainment’ flagship store in Europe was recently opened in Spain’s Barcelona. The store celebrates the architectural icon Antoni Gaudí offering engaging new play and product experiences with many unique local features, including the 3D LEGO model of the Sagrada Família as well as Park Güell. The move is part of LEGO’s global store expansion strategy which debuted at its New York shop, called ‘Retailtainment Center’ in June 2021. The company’s new store format is being hailed as groundbreaking retail innovation offering unique immersive digital and physical shopper experiences.

LEGO’s ‘Retailtainment’ store concept roll out worldwide and its enviable financial results confirm that the high street is far from dead and as channels, online and physical are complementary to each other. As I investigated in my “Retail and Ecommerce: Shopping Reinvented” Opinion piece in my Total Licensing column previously, the high street is just evolving as it always has, and inevitably, there are winners and losers.

The retailers that have disappeared in recent years are the ones that had already been struggling and the pandemic just accelerated the trend. In city centres, particularly, newer and better retailers are coming in which will undoubtedly help with the footfall into the high street. Going forward, this should accelerate as life gradually goes back to full normality.

A shift in shopping habits

Consumers are starting to visit brick-andmortar locations again while continuing to embrace the convenience of online shopping. This shift in shopping habits is posing unprecedented challenges to retailers to diversify their in-store shopping experiences from what they offer online, engaging consumers in physical locations with social and playful

activities to build an in-depth brand/customer relationship.

As highlighted in Mintel Trend Experience Is All, consumers still value the advantages of shopping in-store, which include the ability to try products in person and to be helped by customer service associates that are also among the key USPs of LEGO.

It is important to note that this trend is not about countering online sales, but rather turning shops into enjoyable experiences that promote purchases—either in-store or remotely. 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.

Mintel Traditional Toys and Games, US, 2020 report showcases 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. It is clear that LEGO definitely got that right during the rather stressful (and gloomy) pandemic period and should continue to recoup the benefits in the short to medium term.

What can retailers learn from LEGO’s success?

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.

COVID-19 and confinement measures have accentuated many consumers’ cravings for experiences and entertainment. In an era where the price can often seem like the deciding factor, a return to experiences may be more welcome than ever. To combat the stay-athome-or-stay-online mentality, retailers must all pay heed. They need to extend their offer beyond mere retail and act as a venue, not just a shop. Investments in human resources need to deliver the differentiation of a ‘human touch’ and stores need to avoid ‘showrooming’ through initiatives like redeemable in-store credits and in-store exclusives.

For consumers, a shopping day out will continue to be a leisure activity and it will increasingly be a choice rather than a necessity moving forward. There is a huge opportunity and good retailers will continue to do well.

Utku Tansel LLB, MBA

www.linkedin.com/in/utku-tansel-llb-mba-98231636

Utku has 18 years of success in driving global thought leadership, project and content management, delivering strategic business intelligence and actionable insight to major international companies, retailers and financial institutions. 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. With a solid market research background, Utku regularly writes for leading industry publications including Total Licensing focusing on the most recent trends and developments. A sought-after speaker, he also presented at world-renowned industry events including Licensing International Mind Mix Executive Conference, Hong Kong Toys & Games Fair, PlayCon, World Congress of Play, and Walmart Global Toy Summit highlighting key findings from the latest global research studies.

JAPANESE AGENT FOR MOTUL

Lifestyle brand Motul has appointed Ingram as its agent for Japan. Founded in 1992 Ingram (an abbreviation of International Guidance Research And Management) has been a leading name in the Japanese licensing business for nearly three decades.

Based on its philosophy of “Connecting people through licensing,” Ingram has, for nearly 30 years, built a strong reputation, both in Japan and overseas, for developing well-known global properties in the Japanese market and bringing popular Japanese brands to the international market. An impressive client list includes major Japanese hits such as Rilakkuma, Mamegoma and Tarepanda, while, among overseas properties targeting the Japanese market, an extensive portfolio includes UCLA, Nesta, Cambridge University and a number of major lifestyle brands including Norton, Santa Fe, Route 66 and now, of course, Motul. Motul specialises in the formulation, production and global distribution of high-tech engine lubricants. For many decades it has also been a dedicated technical partner and official supplier to the finest motor racing teams and manufacturers in history. Its presence today extends to over 160 countries, and numerous event partnerships including the Dakar Rally, Le Mans and Goodwood Revival. The Motul brand is now bringing its 100-year heritage, and its associations with speed, style, adventure, performance, elegance and above all winning, to a major lifestyle branding campaign. It will be targeting a wide range of categories, ranging from apparel, stationery, houseware and apparel to backpacks, phone covers, kitchenware and of course car accessories. Ben Kato, founder and owner of Ingram, says: “We are thrilled to be working with Motul, a renowned company in motor sports, as its licensing agent in Japan. By combining Motul’s powerful brand identity with our strength in licensing and promotion, we expect to build a strong presence in Japan for Motul and a diverse range of products across many sales channels. Motul is a genuinely exciting prospect in this market, and I am looking forward enormous-

SELFIES WORKING WITH POPHEADS

Howard Robinson reports that Selfies has been excited to work with UK based 3D design studios, PopHeads and are now set to introduce an eco-3D range for craft toys, wall-art and gifting. The pop-out craft creations will launch initially in January 2022, exclusively in the UK. Part of the StackaWraps Global network, PopHeads has responded to increasing demand for craft toys, gifts and creative partnerships With the environment at the forefront of its innovations, PopHeads sourced FSC materials and sustainability minded UK manufactures to support the evolution of its latest craft toy and gifting designs. These mindful, interactive kits offer off-line activities at a time when the world is gripped by crafting-mania and the UK market is primed for a range of creative 3D collectibles. Ralph Collins head of design innovations, commented: “PopHeads has been in the incubator for a while now, and we have perfected our unique technology specifically for these fun 3D kits. We wanted to create something with maximum engagement by pairing up with exciting artists. The Howard Robinson 3D collaboration is the first to launch with the ‘Selfie’ range of cheeky creatures. Howard has a huge following globally – and iconic status in some countries – and his amazing designs are leading the way with games and collectibles”. Other new Selfie agreements include stitch kits with Art Needlepoint Co in the USA and a range of Selfie activity books with Kidsbooks Publishing in the USA and a recently completed a range of card games for Masterpieces in the US. CEA ltd have become our exclusive publisher of puzzles within in India and we are now looking to team up for games too and agreement has been reached in a new territory for wooden puzzles with Decolaser in Argentina. We have recently partnered with Zuty for paint by numbers in Europe with the first 79 designs now in production and agreed further teritory licenses with Hinkler in Australia and Paintbynumbers.Shop in the US. Diamond painting kits remain very popular and we have enlarged our offering of designs with both Diamond Painting Deutschland and Dozelf in the Netherlands.

ly to working with this property.” Managing the Motul campaign is Laurent Taieb, a licensing specialist with over 25 years’ experience. He says: “Motul is a globally recognised name that is perfectly positioned to become a popular lifestyle brand in multiple categories and markets. We are delighted to be working in the key Japanese market with Ingram, an established and respected name with a strong international reach and a powerful reputation for working with both overseas and lifestyle brands.”