How LEGO Reinvented Itself for the Digital Age
In the ever-evolving business landscape, where companies often rise and fall in the blink of an eye, LEGO stands as a resilient icon. Before we discuss LEGO’s digital transformation, you can take a moment to watch the dramatic reenactment of the legend of LEGO. This charming story not only adds depth to our understanding but also emphasizes the enduring spirit that has defined LEGO. Against all odds, LEGO has survived and thrived, adapting to the digital age while staying true to its core identity.
We all know LEGO as the iconic brick, a toy, but LEGO as a company has diverse revenue streams. Let’s dive into how this toy giant has navigated the waves of digital transformation while remaining true to its core values and products.
Changing Consumer Demands
LEGO’s journey through the changing consumer demands shows the importance of adaptation, innovation, and a willingness to embrace new opportunities and sometimes just kill them 💀.
While only some ventures were successful, LEGO’s ability to learn from these experiences and refocus on its core product has ensured its continued success in the toy and, we can even say, entertainment market overall.
In 1990s toy market future began trending towards blending of games and toys with technology. Toys got techy, and LEGO said, “We got this!” They tried their hand at some odd projects with varying success:
- 1994 — Darwin (LEGO’s first techie attempt, but they pulled the plug in ‘99.)
- 1997 — Lego Island (A video game where you build stuff — cool, but not such a WOW.)
- 1998 — Lego Mindstorms (Bingo! Robots + LEGO = Awesome. They nailed it.)
- They also tried new markets, like clothes, video games, and theme parks. Spoiler alert: not all were winners.
- Attempted growth into new markets — clothing lines, video games, theme parks (none overly successful).
- Almost filed for bankruptcy in 2004. Yikes!
But guess what? LEGO got back on track by refocusing on the iconic plastic block. It turns out the secret sauce to staying relevant was right there. Go, LEGO!
Avoiding Digital Overkill
So how did Lego Avoid the Digital Overkill? It’s typical for companies to jump on the digital transformation bandwagon and lose sight of what’s important and feasible for the business. LEGO has been selective in its approach to digital transformation, focusing on using technology to enhance the physical building experience rather than replacing it altogether.
LEGO has launched many digital products, but my quick research shows that they have been selective in this approach, still prioritizing physical play and creativity.
To illustrate, although they currently have 56 mobile apps in the app stores, there were no ads on Facebook Ads Library encouraging people to download or use any of their applications. You, too, can use this tool for free to see what your competitors are advertising. It is one of my favorite tools for a quick analysis like this. I looked at their ads targeting the US. All I see is e-commerce ads encouraging toy purchases online. This doesn’t necessarily mean the mobile app medium is abandoned, but it clearly identifies a priority for the business. It shows that even though they invest so much time and resources in their digital products, the block still takes priority. I am confident their ad spent on display networks like Meta is in the millions of dollars.
Because they are a company that might target underage people, it takes a very responsible and measured approach to working with social media influencers, which, let’s agree, is part of digital transformation as well.
Note: As this article loses relevance, so will this analysis because business priorities may shift, and ads will, too.
Investing in digital During 2022, we accelerated investments in our digital transformation to deliver improved digital experiences. Our digital platforms helped to strengthen connections with our consumers, shoppers and partners. The LEGO® Builder App, which provides digital building instructions for 330 sets, grew in popularity. There were 13.6 million downloads of the app, a 42 percent rise compared to last year. LEGO Life, our safe social app for children, saw 7.1 million downloads in 2022. During the year, we recorded 395 million visits to LEGO.com* which is 38 percent more than in 2021. We also provided our retail partners with enhanced access to our product range via a virtual showroom, which also reduces the need to travel, making the experience more sustainable. Within our manufacturing sites, we continue to introduce further automation and digitalisation across all technologies to support safer, more efficient production. We also further upgraded our global network infrastructure and invested in our data platforms to improve data-driven decision making. Finally, we expanded our digital team by 43 percent against 2021, to 1,300 people mainly based in our digital offices in Copenhagen, Billund, Shanghai and London.
Conclusion
LEGO’s journey through the digital age is a remarkable story of resilience, adaptability, and strategic vision. While many companies failed to withstand the pressures of digital overkill, LEGO held strong, embracing change while staying true to its core values. By experimenting with digital ventures, learning from failures, and refocusing on its iconic plastic blocks, LEGO underscores the importance of staying faithful to what makes a brand unique. The company has successfully navigated the complex landscape of digital transformation by selectively integrating technology to enhance the physical building experience rather than overshadow it. This approach, characterized by a delicate balance between innovation and tradition, has not only ensured LEGO’s survival but also solidified its position as a leader in the toy and entertainment industry. LEGO’s story is a testament to the power of embracing change while holding onto the essence of what defines a brand. It proves that in the face of digital disruption, the enduring strength of creativity and innovation will always prevail.
