Lego is the number one toy firm in the UK this year so far, but faces stiff competition from Mattel and Hasbro.
UK and Ireland VP and GM Drew Brazer tells Dominic Sacco just about Lego's solid plan for double-digit growth, the runaway success of the new Lego Friends brand and living on the same street as a rival toy company boss…
We're not going to describe Drew Brazer as the man who saved Lego, partly because he stresses to us that isn’t true.
But he did join Lego’s North American operation as VP of sales in 2003 – a time when the group wasn't at its strongest – and is undoubtedly one of those who helped play a part in its revival following its loss-making years and subsequent supply chain restructure.
Today Lego is back on track, having delivered five consecutive years of growth. And Brazer – who moved to England in May 2011 to head up the UK – wants a sixth.
“Our goal is to deliver sustainable double-digit growth and build our market share year in, year out, and we are on track for that,” he explains to ToyNews.
“There were a lot of things that weren’t right with our company around eight or nine years ago. And we worked very hard over the last eight years to improve our business model so we can deliver that consistent growth.
“Right now we are the number one toy company in the UK year-to-date with a 9.1 per cent market share, ahead of Mattel and Hasbro, but we know they will continue to work hard and it will be very competitive for the rest of the year.”
And as if he doesn’t need reminding about his rivals further, Brazer coincidentally lives just a few doors away from Mattel’s UK general manager Geoff Walker – a constant reminder of the competition.
Licence to thrill
Lego stands apart from its rivals with its unique licensed brick-building products, from Harry Potter to Star Wars and [Marvel/DC] Super Heroes to Lord of the Rings. And Ninjago has proved that its internal properties can prosper too.
Plus, the Lego Minifigure was the top-selling toy of 2011, and the new girl-friendly Lego Friends line has smashed internal sales estimates this year, giving Lego a nice-to-have headache.
Brazer names Lego Friends (above) as a particular highlights from the firm's portfolio this year...
“Lego Friends has probably sold at least twice as much [as we anticipated],” adds Brazer.
“It’s exceeded all of our expectations. We launched it on Boxing Day last year and right now it’s hard for us to keep up with the demand, which is a high-class problem. It’s been way more successful than we could have anticipated. Lego Friends will be with us for years and decades to come.”
Brazer says Lego’s strategy is to find the perfect balance between licensed product and its own internal IPs. “When we look at licences, we ask, which ones have the right target audience? And which can express Lego in the best possible way? We look for properties that are not tied to one movie. In my mind Star Wars is more than a movie property. It’s part of our culture. When you look at Lord of the Rings, you see a property that will probably have years of relevance ahead of us.
“Back in 2003 we lived and died by the next Star Wars movie. And we were so dependent on movie IPs we knew we had to create more stability in our business. And that’s when we got pretty serious about addressing City and developing our own homegrown properties like Ninjago.
“That has done very well too. We’ve exceeded last year’s sales by around 30 per cent. And City is our number one property – and the number two toy property in the UK. So for us to have our own IP competing with movie properties is pretty good. You can expect many of those same properties to drive our business next year.”
Duplo and digital
One product Lego is working especially hard at developing right now is its pre-school Duplo line.
It is using the Disney Princess licence and its own Read and Build range to grow the brand. The latter lets parents read a book with their kids and build a story-related piece of Duplo along the way.
Brazer comments: “We’re much stronger with older boys than the pre-school kids and we think it’s strategically important for us to get people involved with Lego at ages two, three and four.
“There’s opportunity for us to improve there, and I think you’ll see our marketing and product development efforts improve quite a bit in the Duplo range.
“We are looking at price value and making sure we have a compelling, good value-for-money Duplo offer.
“Disney Princess is a great licence for Duplo. And Read and Build is a good example of using innovation to engage children with Lego at an early age,” Brazer continues.
Lego is a highly marketable product, and the brand enjoys TV ads, outdoor campaigns and print promotions, much like other companies.
However, it is also very strong online. And that’s another way of grabbing the attention of younger kids. There are over one million fan-generated Lego videos on YouTube, and the brand has exploded in the world of video games, too.
“Our product comes alive in a digital format,” says Brazer. “When you look at these computer generated short films of Star Wars or Ninjago, I think the humour of Lego really comes through.
“Boys are also engaged with Lego video games. The games create tremendous interest for them to go out and buy the physical product. And just because Lego Universe didn’t work out as a commercial success, doesn’t mean we won’t continue to look for opportunities in that space.”
The successful video games are just one example of why Lego is the envy of many a toy firm.
Its iconic brick toy works well with licences and creative possibilities are almost limitless.
So it’s no surprise to see more rival construction toys on the market today, not to mention blind bag-style pocket money products, which compete with the top-selling range of £1.99 Lego Minifigure packs.
Brazer says Lego has one thing those other companies don’t.
“I think our most valuable asset is our brand,” he says. “It’s very special. The love affair between our brand and the consumer is unlike anything I’ve ever seen. We’ve got a lot of unique touch points that other toy companies don't have. We have the Lego club magazine which has 390,000 subscribers, Legoland Windsor and Manchester’s Legoland Discovery Centre. We have probably the best product developers in the world in Billund, Denmark.
“But we realise that the pocket money business has grown a lot in toys. There are new products and competitors coming out all the time. For us to continue to be relevant, we have to innovate.
“All we try to do with our Minifigures is come out with new characters that are interesting. So far it’s enabled us to be number one. I don’t know if that will always be the case, but it is a substantial part of our business and we think it’s great.”
You can pick apart the reasons for Lego’s ongoing success and market domination, but ultimately it comes down to that simple brick design that has resonated so well with consumers and stood the test of time.
“It’s innovation and we never want to become complacent,” says Brazer. “I think again eight or nine years ago you could say maybe we were a little complacent, and we ran into trouble. That lesson is still in the back of our minds.
"We can’t rest on our laurels and we can’t be complacent.”
Check back on ToyNews' website this week for more stories from Drew Brazer's interview.
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