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In lugnet.general, James Simpson writes:
> A world without TLC frightens me. And it frightens me that the company may
> be in trouble. Not grave trouble. Not yet. But maybe in a few years.
> IMO, the new catalog indicates a slight shift in the right direction, but
> not by much. Megabloks is coming on strong, and Lego needs to respond with
> a call to arms. I find myself looking at the Megablok sets and wishing that
> they were Lego. I'll remain loyal to the sets, but to paraphrase an earlier
> poster, kids just being introduced to the brick have no reason to.
I believe that LEGO can maintain its lead by continuing to design high-quality
building sets which appeal to progressively larger market segments, but that
the ultimate winner will not be the one who designs and sells the best sets.
The leader in the plastic automatic binding brick market will be the company
who can sell the most bricks to the most people for the most money the most
often.
I believe that five to ten years from now, pre-packaged sets designed by
internal design teams will account for but a small percentage of the market
leader's profits -- the rest coming from bulk element sales with phenominally
low overhead compared to pre-packaged retail sets.
The leader's customers will be able to choose exactly what they want to buy --
brick for brick -- 100% online. The ERP to make this work is easier said than
done, but someone will do it. The leader's website will give customers a
truly outstanding positive experience, which they will remember and tell their
friends and peers online. When a customer receives an order, it will include
personally-tailored incentives to return online to buy more soon. Incentives
may include gift certificates, coupons, parts-subscription discounts, and
pointers to areas online with related building ideas -- anything to keep the
enthusiasm up -- and it will vary from person to person, and the one who
learns what motivates each person to buy more will profit the most.
I believe that LEGO will ultimately prevail if and only if it can create a
world-class presence online and sell raw bricks efficiently. LEGO has begun
to scratch the surface with so-called "Bulk Paks." These is a great step in
the right direction and a good sign that LEGO "gets it." There are still an
infinite number of other things they could/should be doing, but it makes sense
for them to pick the low-hanging fruit first. And kudos once again to Brad
Justus at LEGO for all the hard work he has done internally over the past
year.
If I were Ritvik Holdings Inc., what would worry me more than anything else
right now, however, would be the MEGA BLOKS(R) brand. It's a terrible name,
and what's worse, there are BABY MEGA BLOCKS, MAXI MEGA BLOKS, MINI MEGA
BLOKS, and MICRO MEGA BLOKS. (Can you guess which one competes head-to-head
with LEGO(R) SYSTEM(TM) sized bricks?) On the other hand, the co-branding
of SESAME STREET(R), TELETUBBIES(R), and NASCAR(R) with MEGA BLOKS(R) helps
obscure that awful MEGA BLOKS(R) name, so they're not totally asleep at the
wheel.
What would you do if LEGO were YOUR toy company? What would it BE LIKE to
be a customer? What would you do DIFFERENTLY from what they do now?
I asked this question a while back -- here's the thread --
http://news.lugnet.com/dear-lego/?n=736
Jump in and share your thoughts! Let LEGO know how you feel!!!
--Todd
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