Lego wants to sell more than colorful plastic building bricks. It wants to sell an experience of “playful learning.”
The family-owned private company, founded in 1932 in Denmark, currently does direct marketing in 19 countries around the world. Steve Hawco, vice president of direct marketing and e-commerce for Lego Shop at Home, talked to NEMOA members last Friday during the group’s spring conference in Cambridge, MA.
Lego comes from “Leg Godt,” Danish for “play well”. In Latin, it means “to put together.” According to the company, 300 million children have played with Lego over the years, and children spend 5 billion hours each year with Lego. There are 52 Lego bricks for every person on earth.
Hawco said the company tries to provide tools for “playful learning” — play that builds confidence and is open-ended. Of course, the problem is that telling a child a toy is educational is “the kiss of death,” he said, so the company has to balance waiting to be fun and cool to kids with letting adults know the toys are effective learning tools.
Towards that end, the company has launched ventures like The Lego Club, which debuted in 1987. The club has over one million registered members, with a target age for members of 5-14, and a median age of 9.5. Members receive a club magazine every two months, which includes building ideas and showcases models built by members.
Hawco said Lego has found that club members purchase an average of 10 Lego sets per year, three times more than the average boy. Seventy-six percent of members never throw the magazine away, and 76% show it to parents, 63% siblings, and 67% friends. And, 56% of club members play with Lego every day.
The company’s Web site Lego.com also targets both parents and children. The site gets 4.3 million visitors per month, who spend on average 20-45 minute per visit
The company has been in the catalog business since 1986. Hawco said that 44% of kids who get the catalog in their home spend 30 minute with it; 84% use it as a “wish book”, while 54% use it as a retail guide.
Seventy-three percent of direct customers use multiple channels for their Lego holiday purchases, he said, noting that, not surprisingly, average annual purchases are higher from multichannel buyers. Those who only buy Lego at retail spend $83 on average annually. Direct-only buyers spend $147; retail and those who use only one direct channel spend $251 and those who buy at Lego.com or by phone spend $266. But customers who use all three channels spend a whopping $472.
One interesting problem for Lego has been how to translate the detailed retail packages into catalog spreads. Hawco said the company used focus groups online to test catalog spreads. One e-mail request to shoppers for opinions on Harry Potter set yielded a 35% participation within 24 hours.
Of course, the results weren’t exactly conclusive. Adults liked a plain white backdrop where they could clearly see the playsets, while kids preferred a more highly designed illustrated background that had a more “Hogwarts” feel to it.
Lego ended up doing a variety of backdrops to try and satisfy both audiences. Online in the Lego store, since most buyers there are adults, a clearer layout is used, along with a 360-spin feature allowing users to see the sets from every view.
The company also goes to consumer for help on product design. In 1997, shortly before the release of a Lego “robot design system” called Mindstorm, hackers broke into the system and made changes that actually improved the program’s design. While the company initially was dismayed the hackers had posted the revamped program online for anyone to see, it quickly realized that customers had a lot to contribute.
Contests are now regularly run eliciting customers to help design playsets , or to help choose which sets might be created and released. A “Star Wars” Death Star set, slated to debut later this year, is one example of a consumer chosen set.
The company is also planning to take that one step further later this year with LegoFactory.com, where users will be able to create models online and they buy the bricks to actually make the creation themselves.
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