No kidding: Lego sees strong growth from adult consumers

For a brand that is best known for delighting children with its range of building blocks, the pandemic has allowed Lego to tap burgeoning demand from adults. In the past 12 months alone, for example, sales to its adult audience more than doubled in Hong Kong, Taiwan and Macau, Troy Taylor, general manager of Lego Hong Kong, Taiwan and Macau, told Campaign Asia-Pacific.

“I think that's because we've launched a heap of items that touch on people's passion points,” he said. “We launched a large-scale Lamborghini that you can build, and we also know that a lot of our audience loves playing and building with flowers and being creative and artistic through the botanical range.” By launching these different products, Lego can tap into an adult business, which it probably didn't realise was so large.

Lego's botanical collection

As Lego has widened its focus from its core audience of children, Taylor, a two-decade veteran at the company, says the brand has been compelled to tweak its marketing strategy to keep pace. "Typically, our target audience is children, so when you're marketing to them, there are a lot of laws and regulations around how you do this,” he explained. Prior to the pandemic, Lego used to do shopping mall activations, and worked with retail partners to bring the brand to life.

That couldn't happen last year. Instead, the brand found it could quite easily target adults, because it could directly reach out to them via social media, so it shifted its focus from brand activation to more direct targeting of consumers. In Hong Kong, by the time the pandemic rolled in, the brand was already used to dealing with its locked in adult audience, thanks to months of social unrest that roiled the market.

“We already had experience with target-marketing the local audience and tailoring our marketing communications to meet the demands of the adult audience bored with being confined at home,” Taylor said. Passions in these markets are markedly different from those in the west, where a lot of the Disney and Warner Brothers franchises are quite popular. In a market like Hong Kong, it's probably more large vehicles and botanicals, he said. In addition, while Lego purchases in the west tend to be focused on children, older consumers in his three focus markets tend to buy products for themselves and spend significantly more, per capita, than their western peers.

To make products more readily available, Taylor has chosen to expand Lego's retail footprint away from key shopping areas and into the suburbs—closer to its consumers. For example, in Hong Kong, it opened a store in Tuen Mun, to address a large catchment in the region, and in Taiwan too it steered away from the capital for a new shop. 

Even as Taylor focuses on building out this new adult audience in his markets, he is also conscious of changing market currents that could impact Lego’s fortunes. For one, Lego must compete for the attention of its core kid audience not only with other toys, but also with a range of competing tech platforms that they are easily distracted by.

Rather than try to compete with these platforms and screens, Lego has opted to co-opt these attention-rivals into its strategy. As an example, Lego launched a Super Mario item for kids used to playing the game on the Nintendo console to keep them engaged. “Nintendo has a great, digital experience and we can offer a great physical one to complement them,” he explained. In terms of digitalisation, it's the whole package, not replacing the physical product itself. It's how Lego enhances that physical experience using all the digital methods and means that it has at its disposal, and that's something the company is investing heavily in.

An example of this is the Disney train station, where you can download an app to engage with the train and make the train move. In addition, the Lego Technic products allow children to build complete sets with motors, and then make that set move around by using a smartphone too. “We probably have 100 to 120 items within our portfolio that actually have some sort of digital engagement built into it,” Taylor said.

With increasingly aware audiences, across children and adults, Lego has also had to work hard to make sure its products meet increasingly stringent DEI norms. “We're trying to be a bit more inclusive with what we message in our marketing,” Taylor said. This means the Lego City range, for example, has started to include children with physical disabilities and some Lego Friends sets have a gender-neutral tone with same-sex dads.

Consider some other nuggets: over half of Harry Potter sets are bought and played with by girls, even as a siginificant number of boys pick up Disney princesses, "We don't put any gender-specific messaging on any of our sets," Taylor explained. " It's really up to the child to gravitate towards what they like best." 

From a sustainability standpoint, too, Lego is starting to change its packaging to make sure it's more environmentally friendly. In 2030, the brand wants to completely eliminate ABS plastic in its products. Currently, 2% of Lego's elements are made using sustainable material, such as plastic derived from sugarcane, and the next decade should see it rapidly increase its investment in this area, he said.

A big part of the challenge for Taylor is handling a series of markets with significant nuances. While Hong Kong may be among its most advanced, with strong consumer interest-from children and adults,  Taiwan remains as yet an emerging opportunity. “If you look at children, [from age] 1 to 12, we have the highest active consumer base in the world, even higher than Australia or Japan, which is quite unique because we don’t have a large Children’s population in Hong Kong,” he claimed. On the contrary, markets such as Taiwan is a big opportunity because Lego is still growing substantially there.