A look at Lego’s digital revival

During this tumultuous time, the company learned an important lesson that depending too much on other companies would only lead to disaster. The time had come for them to build a new legacy brick by brick.

By 2016, Lego had turned things around and was ready for the next phase of its evolution: its digital transformation. Although Lego did not consider itself a “digital” company at the time, it had already invested in a number of digital technologies. For example, in the past 10 years, Lego has successfully introduced a new multifunctional system business platform and launched a number of popular digital products.

Additionally, Lego’s management team had already begun considering its digital omnichannel retail ecosystem, a network of brick-and-mortar stores, e-commerce sites, and numerous partner entities. Instead of viewing its brick-and-mortar assets as traditional assets, where they would be judged by sales, Lego views its retail properties as the experiential component of its brand. Thus, its retail outlets, online stores and other digital offerings are fully integrated to create a unique and immersive omnichannel experience.

“The whole Lego ecosystem is actually, I think, just getting started. So it’s not just about building an e-commerce store or an online store. It’s really of this whole digital ecosystem and creating this future. And it’s a long-term journey, it’s a 10-year journey… And we’re only a few years away,” explained the CEO of Lego, Niels B. Christiansen, to reporters in September 2021.

However, it wasn’t until after the COVID-19 lockdown that Lego’s digital strategy really started to take off. As the pandemic pushed children into indoor and independent play activities, Lego sales deteriorated despite store closures. According to reports, compared to the previous year, the company’s revenue increased by 7% to 15.7 billion Danish kroner (2.46 billion dollars) from January to June 2020.

And the growth didn’t stop there. The following year, from January to June 2021revenue increased 46% to DKK23bn (£2.7bn) as consumer sales increased 36%

At the end of 2021, Lego announced that it would be capitalize on growth and enter the next phase of their digital transformation by investing in digital platforms, products and ways of working. This includes the opening of “digital talent hubs” in Shanghai, Copenhagen, Billund and London.

As Julia Goldin, Chief Product & Marketing Officer, said in a recent Lego article, “Investments in the Innovation Campus will create a truly inspiring workspace for those working in product development and technological innovation and this represents a tremendous opportunity for us as a company and an investment in our people and our brand.

Lego’s trajectory serves as a powerful reminder that it’s never too late to reinvent yourself, you can pull yourself away from the brink of disaster. However, before an organization can truly reap the rewards of a digital-first business model, it must first turn inward and transform from within.

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