A Lego-lover’s guide to preparing for the AI age
video games, films and TV shows that turned into hits. In 2019 Lego launched a new five-year transformation drive aimed at adapting to a world of direct-to-consumer sales, online versus big-box retailing, and digital play in the screen age. The timing was inspired.
It started shortly before the world went into lockdown as a result of the covid-19 pandemic, when having a digital strategy became a matter of life and death. It quickly produced results. Although it is hard to strip out the exact contribution of digitisation, since 2018 Lego’s sales have almost doubled, to more than $9bn, outpacing those of Mattel and Hasbro, its main rivals.
In 2022 visits to its online portal rose by 38%. It has teamed up with Epic, a video-gaming firm, to explore the metaverse. Yet the journey is still a hard one.
The difficulties include moving from a system where success is measured by sales store-by-store to one judged by how good the company is at selling online across the globe, how it is ranked on Google and Amazon, and how effective its software is. The McKinsey authors emphasise such challenges on the first page. In a recent McKinsey survey, they say, about 90% of companies had some kind of digital strategy, but they captured less than a third of the revenue gains they had anticipated.
Moreover, the success rate is more uneven within industries than it is between them. The best retailer may be more digitally productive than an average high-tech firm, and the worst retailer may be as bad as the worst government entity. To make a success of it requires learning the second lesson: what McKinsey calls having a top-down strategy and a road map (or in Lego terms, a clear instruction manual).
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