LEGO, A Phoenix in the Digital Age

LEGO, A Phoenix in the Digital Age image 11LEGO 1Eighty years after LEGO hit the market, the brand still remains true to founder Ole Kirk Christansen’s promise to give children the freedom to play, dream and imagine. In an increasingly technological toy market, what is LEGO’s secret to survival? Focus on the rejuvenation and expansion of an iconic brand in the digital era.

A well-known and loved flagship brand
While the LEGO factory (LEGO from the Danish phrase “Leg Gort” or “Play Well” in English) opened in Denmark in 1932, it wasn’t until the end of the 1950s, when plastic became popular, that the famous building blocks that we know and love today came to be. Since then, 320 billion blocks have landed in the hands of over 300 million children in some 138 countries worldwide. To what can LEGO attribute its longstanding success?

LEGO’s ultimate appeal lies in its ability to stimulate imagination and to encourage the construction of anything and everything thanks to its easy-to-use, multi-purpose base material. Cities, farms, fire stations – you name it – have sparked the creativity of children, the young and the not so young, since 1958.

A true pearl of nostalgia, LEGO is essentially for children aged seven to 77 years old, with Duplo for little ones 18 months to five years of age, as well as for “kidults” (adults who are really just big kids at heart) who build architectural models and post videos of their creations on YouTube.

From a success story to first losses
LEGO, A Phoenix in the Digital Age image 2LEGO 2The company upholds that anything can be built with LEGO and that kids love it today as much as they did back in the 1960s. However, if the brand fails to innovate and relies solely on its history to maintain a loyal following and inspire children, LEGO runs the risk of seeing its clientele grow old and eventually disappear.

To maintain leadership in the toy market, the brand decided to stray from its core product – mutating its DNA if you will – by creating a clothing line, baby products, computer games, and entering into licensing agreements with Hollywood. In the 1990s, LEGO positioned itself everywhere competitors were trying to pierce the market, but this haphazard diversification confused fans and, for the first time, affected LEGO’s growth.

Renewal with growth, getting back to the heart of LEGO
Jorgen Vig Knudstorp, the current CEO of LEGO, acknowledges that the company diversified too much and too quickly, often going into areas that they had no experience.

To bring itself back from the brink, LEGO got down to basics by streamlining its offering. The brand revised its diversification so as to renew consumer expectations associated with a brand asset – fond childhood memories of the famous building block.

The subsequent effect of this strategy played an important role in LEGO’s success. In fact, in order to revamp the brand without fear of disenchanting users and short-circuiting video game competition, LEGO went digital with its iconic building block by developing affinity platforms with differentiated objectives for the target age groups:

  • Play with the past with original target users
  • Use the present to polarize children
  • Call on the future with passionate users

 

1. Play with the past to preserve the expectations of original target users.
With no age limits on creativity, LEGO is a brand that can stay with users throughout their lives. At the turn of the century, LEGO identified older target markets with different expectations than children. In order to sustain the interest of these particular consumers, LEGO developed the LEGO Factory platform in a creative partnership with AFOL (Adult Fans of LEGO). The project provided the brand with the opportunity to exploit crowdsourcing potential and to create affinity products in parallel with its licensed products.

  • LEGO Factory – To take advantage of its adult users’ creativity and intelligence, LEGO developed LEGO Factory, a free download that allows users to design and order their own toys.

2. Use the present to build brand loyalty with children in the web era.
With the evolution of media and gaming, children are bypassing traditional toys for video games and digital devices at an earlier age than ever before. In order to avoid the disintegration of this target market in the digital era, LEGO opted to take its popular block digital by developing several platforms for children:

  • LEGO Club – To extend the LEGO brick In Real Life (IRL) brand experience, the Lego Club offers a wealth of content and tools to stimulate the creativity of children aged five to 12 years.
  • My LEGO Network – Similar to a social networking site, My LEGO Network is a safe platform built especially for children where they can create their own web page and share their LEGO creations with children their own age.
  • ReBrick – ReBrick is a sharing platform designed for users 13 years and older, or Teen Fans of Lego (TFOL). Member projects are created outside of brand-implemented tools and published on independent platforms like blogs or Flickr.
  • LEGO CUUSOO – On Lego CUUSOO, it’s all about fan creativity. For new product ideas, the brand calls out to its community to create and submit designs for community feedback. If a project receives 10,000 supporters, it is reviewed by LEGO for a chance to become an official LEGO product.

3. Call on the future to innovate with passionate users.
Learning from past mistakes, everything that was not linked to the core business was resold or stopped. Having reconnected to the heart of its business and target markets, LEGO has maintained an innovative client relationship with a CRM strategy in line with consumer expectations since 2003.

Develop the brand through innovative partnerships
LEGO has learned to interact with fans and leverage online communities rather than try to control them. Product teams organize and align themselves with communities of passionate consumers, LEGO Ambassadors and Lego Universe Partners (LUP), to jointly define how the company must innovate in order to continue.

Equip retail outlets to extend the IRL brand experience
Since 2008, LEGO has been testing LEGO Digital Boxes in its 60 brand stores around the world in an effort to offer its consumers a fun means of interaction and to provoke an immediate purchase response. These interactive augmented reality kiosks allow children to visualize the content of each box in 3D.

Report on a refocused and innovative brand
Even though the first brick of the LEGO building was laid long ago and the brand enjoys strong consumer loyalty, the success enjoyed at the beginning didn’t really return until about a decade ago. Thanks to innovative strategic choices and digital positioning adapted to its targets, LEGO breathed new life into its famous brick. Above all, the recognition of mature users as levers to innovation coupled with child interaction on the web has allowed LEGO to establish itself as an innovative brand in the digital ecosystem.

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