From Playtime to Primetime: How LEGO’s Adult Strategy is Reshaping the Toy Industry
The other day, I went into a LEGO store to check out if they had the latest NASA Space Shuttle Discovery set. I have to admit that I was a bit embarrassed to be there, surrounded by kids and their parents. But as I looked around, I realized that I wasn’t the only adult in the store. In fact, there were quite a few grown-ups browsing the shelves, carefully examining the intricate sets and discussing the latest releases with the store staff. This got me thinking: who is LEGO really targeting these days?
It turns out that LEGO has been quietly shifting its focus from children to adults in recent years, and the results have been nothing short of remarkable. The company’s revenue has doubled over the past decade, reaching nearly $10 billion in 2023. Despite a declining toy market, LEGO managed to grow its consumer sales by 4% in 2023, outperforming competitors like Hasbro and Mattel. So, what’s the secret behind LEGO’s success with adult consumers?
Before delving into LEGO’s adult-focused strategy, it’s essential to understand the business rationale behind this shift. One of the key drivers of LEGO’s profitability in recent years has been its adult-oriented product lines. In 2020, LEGO officially launched its adult-focused collection, a decision that has paid off handsomely. The adult collection has expanded to 142 sets in just four years, accounting for approximately 15% of total sets available in the U.S. market. This figure indicates a significant shift in LEGO’s product portfolio, with a growing emphasis on adult consumers. But why are adult-oriented sets so profitable for LEGO?
Some adult collectors are willing to spend a small fortune on LEGO sets, with prices ranging from $850 for a Star Wars Millennium Falcon to $1,000 for a Titanic replica. In fact, I have to admit that the NASA Space Shuttle Discovery set I was eyeing was priced at $200, which in retrospect seems like a bargain compared to some other sets on offer. These high-priced sets are not just a novelty; they represent a significant revenue stream for LEGO, contributing to the company’s impressive growth in recent years. In some respects, LEGO has never been more profitable, thanks in large part to its adult-focused strategy.
LEGO’s chief of product and marketing, Julia Goldin, summed up the company’s rationale for targeting adults succinctly
“We decided to focus on adults because we realized that we had a much bigger opportunity than we were tapping into.”
This statement encapsulates the essence of LEGO’s adult strategy, which has proven to be a game-changer for the company. By shifting its focus from children to adults, LEGO has unlocked a new market segment that is both lucrative and sustainable, setting the stage for continued growth in the years to come.
So, why was I, a grown man, willing to spend a couple of hundred dollars on a LEGO set that is ostensibly designed for children? Well, the short answer is that the set includes a Hubble Space Telescope model, which I find super cool (emphasis on the “super”). But the longer answer is that LEGO has mastered the art of appealing to adult consumers through a combination of innovative marketing strategies and product design choices.
One of the key factors driving LEGO’s success with adult consumers is the complexity and sophistication of its adult-oriented sets. From architectural series to limited edition collector’s sets, LEGO has created a range of products that cater to the discerning tastes of grown-up fans. These sets are not just toys; they are works of art, meticulously designed to challenge and inspire adult builders. The Harry Potter’s Gringotts building, the Lord of the Rings town set, and the Star Wars Millennium Falcon are just a few examples of high-priced sets that have captured the imagination of adult LEGO enthusiasts.
In addition to product design, LEGO has leveraged a feeling that is near and dear to the hearts of many young adults: nostalgia. By partnering with movie franchises and TV shows popular with adults, LEGO has tapped into a rich vein of pop culture references that resonate with grown-up fans. From The Ghostbusters to Friends, LEGO has recreated iconic scenes and characters from beloved childhood favorites, creating a sense of connection and familiarity that is hard to resist. These tie-ins have proven to be a winning formula for LEGO, driving sales and engagement among adult consumers.
But LEGO’s success with adult consumers goes beyond product design and nostalgia; it also extends to its digital marketing and community-building efforts. By launching social media campaigns targeting adult demographics and creating online communities for Adult Fans of LEGO (or AFOLs, as they are affectionately known), LEGO has fostered a sense of belonging and camaraderie among adult fans. These efforts have not only increased brand loyalty but also tapped into the powerful sense of belonging that comes from being part of a community of like-minded individuals in an increasingly fractured world.
It’s important to mention that LEGO’s pivot towards adult consumers has not come without its challenges. One of the key concerns for the company is how to maintain its core child audience while expanding its adult offerings. LEGO has always been synonymous with playtime and creativity for children. Unlike many other companies, which seem willing to abandon their traditional customer base in pursuit of a quick buck, LEGO has been careful to strike a balance between catering to adults and children.
The core of their masterful strategy lies in creating products that appeal to both adults and children, fostering a sense of cross-generational appeal that is unique in the toy industry. By designing products that encourage adult-child bonding through LEGO, the company has managed to bridge the gap between different age groups, creating a shared experience that is both fun and educational. This approach has not only strengthened LEGO’s brand image but also ensured its long-term sustainability in an increasingly competitive market. Just imagine, a father and son building a LEGO set together, creating memories that will last a lifetime. That’s the power of LEGO’s cross-generational appeal.
LEGO’s newfound success with adult consumers has not gone unnoticed by its competitors. Other toy companies have taken note of LEGO’s adult-focused strategy and are following suit, targeting adult consumers with sophisticated and complex sets that rival LEGO’s offerings. This shift in the industry landscape has forced retailers to adapt their strategies to accommodate adult toy consumers, creating new opportunities and challenges for companies across the board.
As the “kidult” segment continues to grow, reaching a market value of €4.6 billion across key European markets, LEGO’s influence on the toy industry is likely to increase in the years to come. The company’s long-term sustainability will depend on its ability to navigate the changing market dynamics and maintain its competitive edge in an increasingly crowded marketplace. After all, one has to wonder: how many Star Wars Millennium Falcons can one person make space for in their living room? (Asking for a friend.)
For now, though, LEGO seems to be on the right track, with its consumer sales growing steadily year after year, outperforming competitors and solidifying its position as a market leader. The future looks bright for the Danish company (an economy running on LEGO bricks and advanced pharmaceuticals, who would have thought?), and as long as it continues to innovate and adapt to changing consumer preferences, LEGO is likely to remain a force to be reckoned with in the toy industry.
In conclusion, I wasn’t able to find the NASA Space Shuttle Discovery set at the LEGO store that day, although I’ll leave it up to you to decide whether that was a blessing in disguise or a missed opportunity. What I did find, however, was a company that has successfully reinvented itself by targeting adult consumers, tapping into a lucrative market segment that shows no signs of slowing down. LEGO’s strategic shift towards adults has not only paid off in terms of profitability but has also reshaped the toy industry, setting a new standard for innovation and creativity in the process.
As I left the store empty-handed, I couldn’t help but feel a sense of admiration for a company founded almost a century ago that continues to captivate the hearts and minds of children and adults alike. During my research for this article, I discovered that the name LEGO is derived from the Danish words “leg godt,” which means “play well.” And play well they certainly have, not just in daycares around the globe, but as a cultural icon and industry leader to be reckoned with.
