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At events past, Brad Justus, Senior Vice President, LEGO Direct has
graciously given attendees unprecedented access to information related to
the LEGO hobby. He has presented new and surprising product announcements,
and has accepted live questions from the attendees.
In an effort to maximize our Q&A time at BricksWest 2003, Ahui Herrera and
Larry Pieniazek have taken the time to prepare polished transcripts from
previous events for attendees to re-visit. It is hoped that by reviewing the
questions that have been previously put to Brad, we can avoid much needless
repetition of old questions, and perhaps drive some new discussion.
If you are attending the Keynote Address at BricksWest 2003, please take a
moment to review these transcripts, and give some thought to what new
burning questions you just can't wait to pose to Brad on Saturday night.
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Brad Justus, Sr. VP Of Lego Direct , Q&A @ Brickswest 2002
Transcript of Q&A Session provided by A&M Productions, Ahui Herrera
(jedi_agh@yahoo.com)
Note that LEGO refers to the company, Lego Direct refers to the LEGO
Business Unit, Shop@Home & Website, Lego refers to the physical brick.
(Questions with b, c, d, etcÖ are follow-on questions by the same person)
Q1: Color Mosaics?
A1: Color Mosaics, Not yet. (Laugh by crowd)
Q2: Lego direct has done a lot of good things in the last couple of years.
Is there any one thing that stands out that you are particular proud of?
A2: The Blacksmithís Shop. Mostly because, this is a personal belief as well
as business unit belief, what we are about is not how good are designers
are. I mean we have really good designers, but LEGO is not about how good
our designers can be and what we can put in a box and to show you this is
Hogwartís castle, this is what it looks like and here is how you built it.
Rather what can we put in your hands because you all have castles in your
heads. So how do we make that happen? So I really feel that out job, in LEGO
but particularly in Lego Direct, is to help you all realize as best we can
the castles in your heads. So bringing something like the blacksmithís shop
to life and say look we think that there is a lot of great creativity in the
community and to be able to take that and make it a LEGO set and put it back
out in front of the community. I think for me itís something we are all very
proud of.
Q3: For those of us that are not completely briefed in can you tell us what
is Lego Direct as oppose to the rest of LEGO? How do you fit in? What is
your mission?
A3: We are part of the rest of LEGO. Lego Direct is a business unit of the
company; itís the newest major unit of the company. Itís about 2 years old.
We had our official first birthday at the end of January. That is when we
had our business plan approved a couple of years ago. Our mission is quite
simply, as I have always put it in one line, to make the consumer part of
the company. We got a corporate mission to be the strongest brand among
families with children by the year 2005. There are countries in the world
where we are already that brand. In Germany we are a bigger brand than
Disney. There are other markets, like the US, where we are a very, very
strong brand but we have some work to do. Ultimately if we want to be that
brand, we donít get to wake up on January 1, 2006 and pat ourselves on the
back as say ìHey we did itî. We are not the decision makers there. You all
are, you, the kids, and the families are the ones who are going to decide
that LEGO is the brand that you want us to be. So Lego Direct was put
together to engage in dialog with consumers, to listen, to try to act as
best we can on what you think we should be doing. Keep in mind itís also a
business, so we are making business decisions. But Lego Direct was put
together to operate a lot of the direct to consumer activities. So we
operate the website, the catalog, Shop@Home, all the consumer service
centers globally, the LEGO club, a lot of community activities. We are now
responsible for the First LEGO League and some other activities as well.
Itís really most of the major direct to consumer community related
activities that are going on within the company. I am one of the 12 people
on the executive committee. There are essentially 12 people who run the
company. So we are very well integrated with whatever else is going on.
Q4: For me the promise of LEGO Direct when you made the announcement two
years ago was access to basic bricks at bulk prices. The reality has been
that a few more items have been added in on the Shop@Home catalog in what
use to be the individual packs. If you take a 1,200 brick tub and buy that
from a store or Lego Direct you spend 5 to 10 times more than the per unit
price and you donít even get all the bricks. What about those of us who are
looking to buy a 1,000 2x4 whites at a 1,000 2x4 price?
A4: What is a 1,000 2x4 price? I mean, donít be mislead by whatís in a 3033
(brick tube).
Q4b: Those were sold at retail store for a few years.
A4b: Right, do you know why they are sold at retail? They are sold at
retails, because retails want foot traffic. Itís items that are very low
prices that bring people in.
Q4c: Yeah, they were typically sold at low prices of $15 to $10 on sale.
A4c: That is done to generate foot traffic. They are not done to generate
profit. Itemís like that are very attractive to retailers because LEGO is a
very know brand name and it brings people into the store. They are not
necessary the best things we (LEGO) can do as a business, either for our
retailers or ourselves. The times that the buckets and the tubs are most
popular is black Friday, the day after thanksgiving when retailers want to
get as many people into their store as possible and they are looking at
providing incentives to the people to come in. Those buckets are incentives.
On a year round basis tubs areÖ I see a lot of people trying to estimate
what the price per piece would be. The price per
piece is not as low as what it is in a 3033, this is for bulk but not as
high as what you would necessary need if you were trying to part out a set.
Q4d: The smallest piece in a 3033 is a 1x1. You canít even buy 1,200 1x1s
for the price of a 3033.
A4d: Right but we are running a business too. Ultimately, we have to prove
that the items we are running can make a profit.
Q4e: But you are not the retailer, you are the wholesaler.
A4e: Yes but we also run our own fulfillment centers, there is inventory
carrying cost, processing cost, itís notÖ what we are looking for is not the
retail margin in selling direct itís the relationship with the market. In
other words, the establishment of a direct relationship with the consumers.
Do I wish we had a whole lot more in bulk right now? Yes I do. When you
start selling products, itís very easy to start high and bring the price
done. Itís very hard to go the other way. So we started the bulk program
with a certain number of selected items and we are expanding the items
constantly. A couple of months ago we introduced that if you buy multiple
bags you get a step discount. We are going to
see how that works. We are then going to go back and look at the numbers and
see if there is some more we want to do. A lot of what we are doing is
something the company has never done before. What we find, constantly, is
that no company has ever done this before. Every time we put out a new
product Iím always asked to predict what our numbers are going to be like
and I canít predict that. I donít have any baselines.
Q4f: Decades past you could buy what they called service packs at retails,
perhaps this is new in the US but for the company itís not.
A4f: Yes you are right but 80 to 90 percent of those lost money. The reason
they existed was because they created foot traffic for the retailerís in
Europe where itís a much more independent toy market. Those retailers had a
relationship with their consumers and they wanted to be able to service them
in the best way possible. Most of those items just sat at retail there was
no turn over. We are running a business and we have to operate like that. I
know people would like pitchforks. But pitchforks are a relatively limited
market (Crowd laughs) on a mass scale. That is not to say that we will never
do it. I get a lot of letters that say, ìI would like 100 pitchforks, and
therefore I think this would be a good product. But 100 pitchforks donít
justify hauling out the mold and doing a run. We are constantly looking at
what are the items we should be bring out and how should we be doing it. We
opted to bring out as many basic bricks as we can in as many colors as we
can. We are always looking on expanding with more elements and more colors.
On top of that we will layer on new pricing formulaís that will help to
bring down prices for those people that are looking to buy many, many bricks.
Q5: How often to do expect to release something like the blacksmith.
A5: You mean MOC (My Own Creation) Sets? Or special sets?
Q5b: You are looking for that type of thing outside from the creators at
LEGO. How often do you plan on finding sets like those?
A5b: I suspect that we will do it only a few times a year, maybe 3 or 4
times a year at most (MOC sets). We want to be pretty selective. This is not
to say that there are not creative creations out there. I see creations
everyday. We look at websites, we go to club shows, and shows like this.
There are lots and lots of really terrific creations out there that we could
make into sets. At the same time we have to balance it against what theme is
the set in, price pointÖ I would love to do a MECHA set but at the same time
I think a
lot of them cross the line into what LEGO would see appropriate for a LEGO
issued set in terms of the weaponry and a lot of the other things. (Crowd
laughs)
Q6: We wonít work together anyway. We want to be seen as something that we
created, that we started. Itís a vision thing.
A6: There is a market for it though.
Q6b: You are right but that leads you into the violent theme. I personally
try not to make violent MECHA. It looks spooky and crazy but I donít load
them us with lasers and big guns because itís just not what I do.
A6b: You are right, you are never going to see us do something with lasers
and guns. I hope that we see MOCs at least 2 ñ 3 times a year. When we
brought in Danís set, it was already a set that was designed and done; we
had our designerís look at it. We made a couple of changes, pretty minimal
in the name of build-ability and not just to change it. We ran it past Dan
and he was all behind it. We also look at layouts and say ìThat is pretty
coolî but there if a difference between what looks really cool and what
makes a good set. You also have to look at whatís a good building
experience, what it going to look like when itís done, right number of
pieces, price points, and lots of other boring
stuff.
Q7: Can you tell use anything on where Mindstorms is going and whether or
not you have any information on speech recognition. Is this something you
guys are working on?
A7: I cannot comment on that. (Crowd laughs)
Q8: How about black technic beams? Why canít we get black technic beams off
of Shop@Home?
A8: I donít know.
Q9: Are we going to see something in the Legends line in the terms of
classic space and if that conflicts with your Star Wars license at all?
A9: No it does not conflict with the license. I would say itís entirely
possible that you will see something. We have not ruled out anything in
Legends. The question is what do we have out in terms of lines. We are not
trying to compete with out lines at retail but rather complement them. So by
coming out with the first Lego set that was a castle set at the time when we
did not have a castle theme. Yeah Harry Potter is a castle theme but it is
also a license. Itís going back to classic castle and not anything that you
fit into there (Harry Potter). Then we came out with the Metro Linear at a
time since itís been a couple of years since the last train release at
retail. In fact Lego Direct is probably the biggest train retailer for the
company. So we can do whatever we want there. It would be unlike that you
see a classic space legend this year because itís 2002 and Star Wars comes
out in
3 months. We are not going to try and go up against that. But we have not
ruled out doing it.
Q10: Are we going to see more Ice Planet? Is Ice Planet 2002 coming?
A10: No
Q11: Are you going to drop Mindstroms?
A11: No, absolutely not.
Q12: Is there any products from Shop@Home that will be at retailers?
A12: Some of them are already there. The sculptors, the dragon, the statue
of liberty, the mini-fig, Toys R Us has picked some of those up. FAO Shwarts
has also picked them up. You will see a lot more out this year, the camel
will be one of them. In Europe some of the independent retailers will also
pick them up.
Q13: What about the train sets?
A13: Very doubtful, itís possible we can put it together. What you have to
realize about those trains is that they donít exist as a set. When you want
a large blue engine with tender that is not a physical product in a box but
four different components. It gets assembled in our distribution centers.
They pull the components that come in the box. That is also how we are able
to do it at a relatively low favorable price. We donít have to worry about
inventory management on how many black ones do we need, etc. In order to do
it at retail we need to do inventory management. Iím not ruling for that.
Q14: Are road base plates being discontinued? The catalog says limited
quantities.
A14: That means we donít have a whole lot of them. I donít know if they will
be discontinued.
Q15: The LEGO trains have been growing in popularity within organization in
the last 2 ñ 3 years. What do you think are the next steps for both you and
us (LEGO train community).
A15: We have been taking a lot of steps ourselves. We got trans.com now
backing us up and a LEGO section on lego.com. There are many articles there
and you guys have been contributing to that. That has been raising awareness
and I think itís really helping a lot. I think itís also the clubs getting
out there and making people aware that yes LEGO makes trains. You guys keep
showing us off and we will continue to make more trains. I
think we are getting a really good response from it. The company has always
believed we have a place in trains. Historically itís been the impression
that the train market is in Germany. I think we have proved that yes there
is a train market in Germany but also in the US. We are going to keep
working the official angle www.trains.com is going to have a promotion
called ìThe Worldís Greatest Hobbyî. Should we go to the NMRA show? I donít
know. We have talked about trying to do a national LEGO train show, but I
think that at this point in time we should try to get visibility within the
hobby itself. If we play our cards right, from where we are right now we are
the ënew lionelí. Back in the 50s that is how kids got into trains. You got
a lionel set and then you graduated and
got other sets. Our opportunity is to get kids involved with trains through
Lego and hopefully they donít have to graduate. (Crowd laughs)
Q16: You have seen how effective Lego layouts are at train shows. Have you
though about getting some of the train sets to the vendors at the shows.
A16: Yes, but itís an inventory issue. We donít distribute to the
independent hobbyist. Itís not to say we will never do that but our
distribution centers are not set up that way. We are set up to server the
Targets, Wal-marts, etc. Itís a high volume palette system. In Lego Direct
we have a pick-n-choose type of system that may be suitable for what you are
saying. But there are a lot of logistics that need to be reviewed. We rather
right now, if you want trains go to the nearest imagination center or call
shop@home.
Q17: Have you though about allowing smaller independent train retails to
sell just Lego trains in their shops? Perhaps with a couple of town sets?
Although you donít have any town sets but that is another issue. (Crowd laughs)
A17: (Mr. Justus shows a box that was hidden in his suitcase. The box is a
new Lego LEGEND Town set) First of all, this looks like a town set to me.
(Cheers from the crowd). We will work with retailers but we want them to
take a representative assortment of our products. We donít allow people to
sub-divide the assortment because we get into the issues of cherry picking
and that is not the way we do business. There is also the issue of how do
you service that with sales? You only have so many people and
they have to cover so many stores. It makes it difficult. We are doing
everything we can right now to build the best direct-to-consumer business
and worry about business-to-business later.
Q18: Can Lego Direct help the technic lines?
A18: I donít know that they need our help. Itís an issue for the product
development group and itís one that they are working on.
Q19: We all know that Lego Direct has picked up the banner for trains andÖ
A19: (Mr. Justus interrupts) We are not going to do 8-wide John. (Crowd Laughs)
Q19b: What do you mean you are not going to? What is the tank car then?
Trains are picking up in popularity. What is it going to take for Billund,
Denmark (This is the LEGO HQ) to update points, curves, that kind of thing
that takes some real investment?
A19b: We are working on that. Were do you think product development comes
from? We do our product development in Belinet.
Q19c: But all the new trains sets are actually not new products. You are
just recombining and using new color on bricks. It seems like without Lego
Direct the last train set from Belinet would have been a couple of years
ago, if at all.
A19c: The people who develop retail trains are the same as our. They all use
the same resources. Itís the same group of people but we are working to
different specifications. We are also aware that in the Direct market we are
able to target the market more specially whereas when you develop a product
for retail you have to aim a lot broader. There are differences there but we
are working on the track geometry issues.
Q19d: So a 400 to 500 category are thoseÖ you are in the 10000s for trains
now will we see more in the 400 to 500s categories?
A19d: The numbers are just a mater of tracking. Yes these (legends) are in
the 10,000s but who is to say that these (Legend Lego CafÈ) canít be at
retail. The stuff that we are developing, that we have direct control of we
are going to maintain our exclusively, period. Itís not just a matter what
we say cannot be sold at retail but does retail want it. There are some
items like the Star Wars Blockade Runner is a bog box and it is $200. You
donít see a lot of $200 toys out there. They are not racing off the shelves.
We are
very aware of who buys from us and who are audience is.
Q20: Is there any development going on at LEGO about Mindstorms and trains?
Or is that a no comment question?
A20: I think itís a good idea. (Crowd laughs)
Q21: What would get LEGOs attention on ëhere is a credible Lego groupî to
help create a relationship.
A21: We are trying to come up with a set of criteria thatís says How long
have they been around, how often do they display, results of what has been
displayed, are you doing new things, response from the community, who could
be the best ambassador for the brandÖ.
[Tape 1 on digital camcorder ended sorry had to switch tapes]
Q22: Ö.Lego direct is targeted towards an older audience, how does this
affect the rest of LEGO.
A22: I donít agree that Lego Direct is geared towards an older audience. Yes
we are doing call them collectable but we are doing more complex models,
more challenging models. We think of them as inspirational models they are
not primary aimed at an adult audience. What they are aimed at is Lego
enthusiast which are looking for challenges not available at a retail store.
These are complements that we have at retail. We know that people who buy
directly from LEGO are people who are proactively expressing an interest and
love for the brand. We, off course, want to encourage that. These people are
not satisfied with building whatís on the shelf at Wal-Mart they want
something more. We are trying to provide that something more to them. Itís
not just the adults. Adult fans, you are small in number, but have more
spending power than kids. But the fact is that when we do something like
this (Legend CafÈ) itís targeted toward the younger audience. Probably the
most that we have targeted toward the collectors and older audience is the
star wars sculptors. Not because itís a Legoís collector market but because
there is a Star War collectorís market. But the greatest number of people
who get the Lego series are kids. These are kids, however, who want more
than just building the Star War or Harry Potter sets. We are targeting a
complement audience to retail. We are
building brand loyalty.
Q23: The Darth Maul and Yoda models that were given out as prizes before the
current sculptors were made as sets are much more detailed than what we have
now. Who designed those and oppose to what we have? Do you talk to those
model makers for input?
A23: The Yoda model that is out now is more complex than the one done for
shows & events. For the Darth Maul you have to keep in mind that we are
targeting a certain price point. To create the one done for shows & events
with the hood over his head would have cost $400 dollars! We know that there
is a point at which consumers will not buy. There is a difference between
what makes a cool looking sculptor and what makes a set we are able to sell.
We have to keep in mind the price points, number of pieces, how build-able
and playable is it. There are certain things you do for shows & events that
you would not do for retail sets. This is not to say that we donít use shows
& event models. The statue of livery was created by shows & events for us.
What you see at shows & events does not always make a great build-able model.
Q24: During X-mass you would go to store and the Harry Potter sets were
gone. Did you not anticipate such a demand for them or did you just hold
them back?
A24: It was more popular than what we expected. For Harry Potter we did a
late production run in the season that for any other line we had done. It
was just very, very popular and somewhat unusually that the biggest set in
the theme was the one everyone wanted. Usually the mid-price point items are
the more popular sets. We just couldnít make them fast enough. You must
remember that we had a lot of popular items this past year this is great but
puts a strain on what you are going to produce since you canít do all
of it at one time.
Q25: You had several airline promos and some Japanese as well. Will you be
doing more of those promos?
A25: We are always looking at these options and trying to get the
manufacturing team to produce more. Every now and then we may find in a
warehouse with some left over items. That is what happened in Europe last
years with the accessory packs. You could only get them there because it was
a rare find. For the most part, our new products like the Legend CafÈ will
be available in all our markets. Promotion sets are different. We
may have contracts that donít allow us to sell the sets outside of the
promotional market.
Q26: Are you going to invest in the website to change the interface for
trying to buy bulk bricks. Itís very hard to see list after list of bulk
bricks trying to find the one you want.
A26: I agree we are constantly looking at the site and seeing how we can
improve it. Itís an extremely deep complex site and not easy to make changes.
Q26b: I know itís not an easy change, because Iíve had to do it before. It
is something really important for Lego Direct to invest their time to do.
A26b: We are looking at what is the best way to sell bulk bricks online.
This is not a lightly access site. Lego.com gets 12-15 million visits a
month with more than 3 million new users. The average session per user is
more than 48 minutes for November 2001. People are coming in and spending a
lot of time. When you are out their pumping that much bandwidth you plan
changes very carefully. We never make major changes in the 4th quarter. We
just donít go there. We do planning in 4Th and 1st quarter and do
implementation in 2nd and 3rd quarter so we are ready for the next 4th quarter.
Q27: On the 48 minutes that people spend on your site it might be waiting
for .asp pages to load. They take forever to load.
A27: Check you ISP. We tests the ISPs, we do down specs of them and 99 out
of 100 itís not us. Itís the local ISPs.
Q28: Will the Mindstorm get more outputs and the external jack again? Also
for the Mindstorm/Train development are they seriously looking at fully
compatible DCC systems?
A28: I never said we are looking at Mindstorms for trains. I think
Mindstorms and trains are great. Are we doing something specifically on it
right no, NO. We are looking at ways to do it. More important right now is
getting a lot more out there, more models, rolling stock, point geometry,
and buildings that go with it.
Q29: What is the story about why the power jack was taken off the RCX?
A29: I donít know, Iím not the person to ask about that. That happens in the
deep dark bowels of product development.
Q30: Are there any sculptor sets that are being discontinued? What are
service packs?
A30: I donít know about service packs. We had discontinued the statue of
liberty and then it started selling so we are going to produce more. The
dinosaur and min-fig will be discontinuedÖ Discontinue means we are just not
manufacturing it anymore. We will still have it in our sales assortment but
not making it. From my point of view nothing is ever really gone. We can
bring it back if there is a market for it. Everyone though the
guarded inn was gone.
Q31: So is there a chance for a mono-rail?
A31: No (Crowd Laughs)
Q32: Now that Enfield is no longer molding bricks how does that affect your
product development.
A32: It doesnít. Enfield only molded a limited number of basic bricks. We
were doing product development in Billund anyways. The fact that we
consolidate molding is suppose to give us lower cost.
Q33: You said you wonít do MECHA because of the lasers and guns. Some of
your products do have guns, however. Can you make a distinction for us?
A33: I said SOME MECHA. When you look at the MECHA I have seen that have the
weapons they are extremely explicit. There is a difference between a little
blaster and someone holding a cannon (Mr. Justus stretches out his arms).
Where we draw the line isÖ Conflict in a historical context is considered
acceptable. Danís Tanks (Brickmania) are great, but we are not going to be
doing that. As we move closer into the 20th century
we get into the gray area.
Q34: A club is talking about doing an ancient Greek line. Will people
talking about stuff like this ever make LEGO not do it.
A34: No, again we never rule anything outÖ except the monorail (Crowd
Laughs). Believe me, I would love to do the monorail again. I have a ton of
monorail stuff but a lot of the equipment is destroyed.
Q35: Outside of the MOC and Legends line do we have to wait until Harry
Potter finishes to return to the castle line?
A35: Harry Potter is castle. I donít think we will do a major retail theme
of castle while we are doing Harry Potter.
Q36: The destruction of the monorail models is a mater of company policy or an
accident?
A36: We destroy molds that are no longer of any value to us. What I am told
about the monorail is that even the schematics are not available to us they
were destroyed as well. Also the monorail was a unique item and even the
supplier who created the motors is no longer in business and we donít have
any of that equipment and donít have the details. In order for us to do the
monorail we would have to start from scratch. That in terms of
product development is the most expensive thing to do for us.
Q37: You took Danís Blacksmith shop as a product of your own. For those of
use who would love to be blessed like that is there anything you can tell us
that you are looking for.
A37: Built great stuff. I donít want people out there trying to great
something and thinking I hope LEGO makes this into a set. That is not what I
want. That is not want we want to see. We want you guys to create what you
want to create to make yourselves happy. If it so happens that there is
something that makes you happy and makes us happy and makes a great set so
much the better. We are going to make MOCs in the MOC program that may not
even be a MOC out there. We may ask someone who is really
good at building ships, planes, houses, etc. to build us a MOC. There are
different ways to go about the MOC program. In terms of what you should
build to get our attention, do the things that make you happy. Donít do the
things that you think we make us happy. At the end of the day you are going
to be frustrated that we donít pick it and that is not what we are out to
do. Everyone already is a set designer. You guys would not be here if
you werenít. Yes we have many designers at Billund, but at Lego Direct we
think that we got hundreds or thousands of million designers. But not all
those designs have to be made into sets. There are many ways to show off
your design. We are not going to be doing dozen and dozen of theses a year.
What is more important to us is that you do the things you like to do.
Q38: To what extents to you think sets in terms of having parents and
children playing together.
A38: A lot. I have two little boys. Part of my criteria is not do I want to
put this together by myself but do I want to sit down with my guys and put
together a set. Is it something that they are going to like and have fun
with. That is something that is really important.
(Mr. Justus brings out the LEGEND Pizza Shop and the Santa Fe Super Chief
Train Engine. The Crowd is cheering and going wildÖ)
VP: This (Train engine) is not out of the MOC program; It was designed by
our own designers. Itís the same designer who did my-own-train series. We
went to Santa Fe and said we want to do an F7, a super chief. What do we
have to do. They were more than happy. They want to sell it in their own
gift shop now.
(Crowd starts making lots of comments)
VP: We are looking at making an accessory pack because the B-unit actually
has 3 port windows that will allow you to change the Super Chief (10020)
into a B Unit.
(Crowd yells 8-wide)
VP: Not in my life-time. John, just to make you happy. I was talking to
Kjeld Kirk Kristiansen (CEO) about a month ago and I was showing him all the
stuff we are going to put out and he was going nuts about the super chief
and he told me, ìYou know if you do it in 8-wide you can do more detail.î
(Crowd laughs and claps)
VP: But it wonít fit into anything else we do so lets not go there.
Q39: How limited (on train engine) is limited?
A39: Itís a series of 10,000. We run out of the numbered ones at 10,000 and
then we will we see how that goes.
Q40: What if you motorize it, how do you get the gray side-plates for the motor?
A40: The set comes with the gray side plates for the motor.
Q41: For ordering you get a random number?
A41: Yes
Q42: You alluded to track geometry and other items like that. But can you
tell us about your personal priorities for trains?
A42: #1 - Different curved radius
Q43: What about the unusual switch tracks that nobody else has?
A43: We are looking into various things. This is one area where we will have
to create new molds. In all the product development that we have done (Lego
Direct) from the statue of liberty to the Santa Fe we have done no new
molds. Everything that we produced is something that is commonly available.
VP: This is coming out in May and all I have is box art right now. This is
not a MOC.
[Shows off the Red Baron Bi-wing airplane similar in size to current British
bi-wing plane]
Crowd: Does it come with snoopy?
VP: No there some licenses we will just not do.
-----****End of File***--------
_____
Brad Justus, Sr. VP Of Lego Direct , Q&A @ BricksFest ô2002
Transcript of Q&A Session by Larry Pieniazek (lpieniazek@mercator.com)
Q1: Lego direct has been running how long? Still moving forward?
A1: 2000 was a startup year, 2001 first full year, things are going very well
Q2: Will we see a 3033 replacement?
A2: Not other than the Creator tubs
Q3: Why was the 3033 axed?
A3: product decision... Creator is the free building product line and there
are transitions, 3033 was a long-lived product!
Q4: Why has the product cycle gotten shorter?
A4: We think kids interests have gotten shorter and want new stuff more
frequently... things DO cycle back
Q5: Canadian retail pricing and S@H pricing has been problematic... why
is retail less than S@H
A5: We set the MSRP, if retailers discount, that is their decision, we keep
S@H at MSRP as a policy decision
Q6: the ATSF... how did it do? Can we expect similar things?
A6: I never comment specifically but we were very pleased with the ATSF
performance... yes you can expect similar things going forward.... remember
we are experimenting in the direct channel... some products we know will do
well. Others we arenít quite sure. Lego Mosaic was a huge experiment, not a
groundswell of demand... but people did respond well. It also gave us a
chance to experiment with mass customization. The ATSF was the fastest
selling new intro from LD so far
Q7: How did the MOC line do?
A7: Very well and yes there are more coming (no specific announcement)
Q8: European service packs... can we get them?
A8: those are out of production things that were being worked down from
existing inventory. It did not make sense to move old inventory to the US
just to move it. We ARE looking at new service packs but of our 300 we have
had active at one time (lately?) only 40 or so went well.
Q9: How do you decide what packs to use?
A9: standard market research techniques... the My Opinions area is very
useful as are historical sales info
Q10: the BSB won recently... there was apparently some concern about how
that BSB won.. can you describe the process?
A10: The BSB won the "if you had to pick one, which would you pick" question
hands down... other criteria were asked to help us do research (what would
you do with it, would you display it, etc etc.)
Q11: so what makes a legend?
A11: best in class, first in a theme... surprisingly the yellow castle came in
last out of 5 in the voting.... we know everyone can build a fair yellow
castle from "tubs in your living room" (which got a laugh)... all 5 were
legends by our definition... but we wanted to understand why and what?
Q12: the mechanics of the polling site... there are some concerns that there
are multiple answers that delete votes because they are similar... any plans
to change My Opinions mechanics?
A12: we are getting better at moderating. That's key. There IS method to
how the representative answers that are presented ... it's partly random and
partly does filter out bogus choices. We are a leading user with the vendor
(which has patents on the system). We are happy with the info we are
getting, and the answers DO correlate well with answers we get from other
mechanisms (focus groups, targeted paper surveys etc)... but are from a much
wider audience (10s of thousands of people are responding to My Opinions)
and thus are likely to be more accurate
Q13: Talk of direct LEGO sponsorship??? Will L consider getting
involved in other more established cons that are geek related but not
necessarily directly LEGO related?
A12: We talk about it, but we are more excited about supporting DIRECT
fans... it is better for building the brand than either us creating an event
(KidVention for example, successful but perhaps too long and consumes a lot
of internal planning resources) or being on the periphery of a non LEGO
event... we would rather support your grassroots self organized events and
get 3-5 events for what effort would get one LEGO (and thus not as
authentic) event. Hijacking user events is not appropriate though. BrickFest
is not just YOUR event nor is it ALL LEGO... it's collective and a good balance
Q14: Given that you will not comment on specifics, can you give us
any roadmaps to future development or changes that might effect us? Business
as usual or new directions?
A14: yes. We can't comment but we ARE chartered with experimentation and new
directions so we are continuing to experiment.
Q15: The Star Wars celebration II was in Indy it was a big fan
directed convention and was a big success. Lego had a very impressive
presence, as related by non LEGO fans who were "BLOWN AWAY" as the hit of
the show. Is there any more that we can expect from sort of not directly
LEGO but still related
A15: you can expect us to do more, yes.... we have a license so of course we
would... We will do Bionicle at comic shows, we will do things at Harry
Potter shows if one comes about, etc. We do those things because it builds
excitement. Building that Yoda and etc. was a high cost/resource effort for
us to do. Hence (tying back) we rather support YOU guys where we can. That's
why the questionnaire asks about efforts. We support train shows not because
trains should be supported over other liens but because train shows attract
kids and build excitement about the brand (everyone booed when Larry P said
"as you should" in response to train being the best brand :-) )
Q16: We all love classics, I personally would like to like to see
more legends and classics... could you consider producing variants of old
sets rather than copies? (sets in other colors for example)
A16: Yes, we are considering that very seriously.
Q17: Are Cypress Trees discontinued? Or is that a rumor?
A17: Yes, unfortunately. We used all the shots in the molds, there are none
left...
Q18: Harry Potter, how long does the license run?
A18: not sure, can't comment:
Q19: Can we get better discounts on MASSIVE quantities say club projects?
A19: We have a concern that we don't want to see everything on BrickLink or
eBay... something like that needs to enable a LUG or LTC to make a better
display to get better exposure for LEGO.. not to put pieces in people's
hands so that they can go turn them.
Q20: I was inspired by idea books... now there are none. Any plans
for new idea books?
A20: It is under discussion...
Q21: There are a lot of promos out of the country.. can LD get
promos?
A21: it's possible but there are legal due to how the promo are organized...
many times things can only be sold in the country by the corporation
partner. We sometimes can get them if the corporation does not want them....
we are constrained but optimistic about getting stuff... for example MAYBE
(no promises) we can get the shell sets from last year. you will NEVER see
same time availability
Q22: How well did the MOC Blacksmith shop and the ATSF do with KIDS
(not us)
A22: If a product is doing well, it is doing well with kids. Adults cannot
make a product by themselves. the ATSF will be our years best seller we
think and that is due to kids
Q23: Any chance of new train cars this year
A23: Maybe
Q24: Any chance of a return of minifig sized Paradisa style stuff?
A24: Not very likely, nothing is ever entirely dead but it would be tough.
Q25: there are 10% girls here.... why is that? Only boys like LEGO. My
theory is the way that sets are marketed and presented. Trucks don't hold
girls as well as shop models and town and castle sets (If marketed the
right way).. play value is the thing... airliners are cool. The way that
stuff is marketed to girls is wrong.
A25: Good input.
Q26: I work at Dawsonville. I get a lot of parents asking for "LEGO
for girls" and I have to refer them to Belville and Scala.... they get
disappointed and want minifig style sized stuff.
A25: Yes, we know that.
Q27: Given the success of sets that are 4 walled, artickualted, high
detail (MOC, ATSF etc, sets with 4 walls), will that info be conveyed for
the rest of LEGO.
A27: there is a reason that Jack Stone exists. It IS very popular with 3 and 4
year olds. NOT every product is for everyone. Some LD products are finding
their way to retail. But don't expect everything to move in the LD
direction. Adults are different from the rest of the market. Star Wars and HP
are not particularly juniorisd... you are not using the big POOPs as much.
They are at a higher age level target though.
Q28: So is what you are saying is that you just look at profit not
how to stimulate kids?
A28: It is NOT about profit. 3 and 4 year olds are not able to play with older
age level sets... we needed to come up with ways for younger (less
dextrous) kids to build. Either you build too long with Duplo or you leave
Duplo too early and get frustrated with trying to build system. Jack Stone
is a transitional theme. It is NOT an abandonment of older ranges.
Q29: MOT and ATSF did well in LD... will we see retail availability
of trains again?
A29: MOT WILL be seen in retailers again... TRU maybe. But track, (which we
realize people want to buy) is hard to get retailers to carry... we struggle
with that problem
Q30: More on the set for target and TRU? Will it go to brand retain
A30: different packaging
Q31: Will there be a new 1000 piece set?
A31: No idea about them
Q32: if an LTC does a good show, do you get feedback? We point them at
the catalog, about the lego.com site
A32: depending on size we send catalogs, we send out postcards.
Q33: Can we ask how we did?
A33: no, we don't release that sort of specific feedback.
Q34: Can you do transparent pieces in bulk:
A34: maybe... we never rule out anything. Except Pitchforks! (big laugh from
crowd)
Q35: White plates?
A35: maybe... 30 or 40 new bulk packs are coming out in 4Q... yes some old
ones will go away due to production volumes
Q36: Will you expand to small hobby stores
A36: not my place, retail distribution is a sales company function not LD.
We have made changes to allow phone in order and assistance... they can now
pay by CC the same way that consumers do, piggy backed off the S@H... there
has been attention paid to this issue
Q37: Is MS being replaced by Spybotics?
A37: no. MS is not going away
Q38 Is the technic beam dead?
A38: no. It is NOT dead.
Q39: How do you measure retail success, take rate or sales rate?
A39: both... we want retailers to reorder of course so they need to be able
to sell, if we channel stuff that's not good enough... retailers need to sell
to consumers
Q40: Can you tell us what theme the next MOC will be from?
A40: Yes, I could, but not right now.
Q41: The park model shops have a tremendous selection of bulk parts
which sometimes dribble out in the park stores... any chance of a club/bulk
oriented availability? Not necessarily massively public?
A41: not really because we don't know what the model shop inventory is nor
do we want to sell it off out from under them because they then could not
make their models!!!
Q42: Lots of new parts/colors in sets.. but in many sets have only one or
two of a part or color... will we see more?
A42: if you've seen a color you probably will see more
Q43: Will we see classic technic sets instead of funky panels?
A43: Technic is not dead
Q44: Maersk promo sets? Any hope for those?
A44: License issues always cause problems.... in other colors also are hard
because of the limit on how many different things we can do
Q45: Any chance of 1x4x6 3 pane windows being added in bulk
A45: No comment on specific bulk assortment plans.
Q46: Any info on LEGO retail expanding into new markets or brand
extension into apparel
A46: No comment, have not released specifics.
Q47: CAN you comment on what is coming out?
A47: Be patient.
Q48: Any comment on what is coming for SW?
A48: We want to do more and will
Q49: Build some ships shaped like letters!
A49: It's been done!
Q50: Mace and Windu?
A50: they are nice. What was the question? No comment on minifigs
Q51: Military?
A51: Lego don't do military!
Q52: Tee shirts? That was mentioned on LUGNET long ago?
A52: we are still looking into that. It is actively being worked.
Q53: Are there sites that LEGO *does* support or endorse sites?
A53: we never endorse. We do supply material to certain sites under arrangements
Q54: Can you clarify?
A54: we will not provide any "official seal" but there are sites that clearly
do provide broad services and we do want to help them without showing favorites.
Q55: Are there any industrial uses for LEGO? (fastening systems??)
A55:It is not an area that we target. We are aware that some industries use
LEGO for prototyping. We are not a business to business industrial supplier
Q56: When LD started it was an experiment
A56A: NO!
Q57 ok but have the failures nad successes been surprising to you personally
or anything that was not inline (Is KKK happy?)
A57: the expectation was that we would take all the parts that have contact
with individual consumers on a named basis together into one org. LD is a
way of interacting and connecting with individual consumers, making the
consumer a part of the company.... feeding input into the product
development process. Those aspects were experiments. Successful yes. We did
not set expectations in advance... we did not know how people would respond
to "something that someone NON LEGO designed)... We are pleasantly surprised
at how S@H (and the web) has been able to grow internationally even in a
difficult climate. We launched the web at the same time that TRU gave in via
amazon and etoys folded up yet we have done well?
Q58: Will you offer stock options to consumers?
A58: no.
Q59: Can we get a break on straight track?
A59: not sure... the packs were thought to address this
Q60: Any time soon for 1/2 and 1/4 track sections
A60: we are looking at other geometries, it's NOT easy to reengineer.
Q61: Any progress on "design your own MOC"?
A61: yes. but it's going to be limited.. not ANY part in any color... Jake:
it is a very very big project
Q62: Color mosaics? even if only 16 colors?
A62: we have considered it but if it comes down to parts for a new mosaic
vs. legend... we choose legend.
Q63: What does LEGO think of us fanatics? I told my parents I was
going to BrickFest.... a gathering of friends to play with LEGO, my friends
think I am nutty. When they see other creations, they say it's cool but
maybe not get why we do it. What IS the company perception... contrast with
Matchbox or Barbie which haven't had this groundswell of interest. Matchbox
collectors just display their collection.
A63: Direct was not created strictly to interface with the adult community.
But you can tell the company attitude based on what LD does... we are
pleased, we are grateful for the support. We see things like Time magazine
saying "trendwatch, adults are playing with LEGO" but our mission is focused
on kids... bring out the kid in adults yes, bu families with kids are our
focused. we don't discount on adults to adults... but we will support
organizations that get us exposure with families with kids first. "the
tipping point" is a book about how trends get started. (also see Crossing
the Chasm) There are innovators, early adopters, early and late majorities,
and laggards. There is a leap from when things are niche and when that
thing becomes mainstream. ... the adult community can help make that leap
but is NOT an immediate economic value. The role is more to get kids and
families excited. That adult activity enables kids to stay with LEGO
longer... instead of getting shamed out of playing at earlier ages.
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