The digital acceleration of the pandemic had already left some retailers questioning the effectiveness of their store estates in their channel mix. Will footfall return? Can stores run profitably? Is bricks-and-mortar relevant in shoppers’ increasingly digital buying journeys? Add to this the explosion in digital sales channels – not least the rise and rise of social commerce, new online marketplace formats and the vast, but so far untapped or merely surface-scratched, opportunity of the Metaverse – as a prompt for even more head scratching about the future role of the store in retail.
But far from the Irish Exit many predicted, the store isn’t slipping away quietly.
Quite the opposite, in fact, if the latest peak trading figures are anything to go by. The store’s resurgence was evidenced in many retailers’ recent 2022 Christmas trading results. Fashion retailer White Stuff reported store sales jumped 25% year on year in December, while Seasalt said store sales in the five weeks to 31 December 2022 were up +24% in-store, but down -2% online. And, with Sensormatic research showing the store will top consumers’ main shopping channel in 2023 for 71% of UK shoppers, bricks-and-mortar is by no means ready to leave the building.
Famed for its brand-immersive stores that put ‘retail-tainment’ and experience at the heart of its store offer, LEGO is a firm believer in the flagship role of the store in its omnichannel strategy, as Martin Urrutia, Global Head of Retail Experience at The LEGO told audiences at NRF’s Retail’s Big Show over in New York this week.
Transcending beyond bricks-and-mortar
Speaking on the Twilio Feature stages session, he described how for LEGO retailing in-store transcends beyond the bricks-and-mortar of the store itself – it is not just a transactional hub, but it is its own customer communication and engagement channel. It’s where guests come to immerse themselves in the brand, to hang out and to socialise and get to know and interact with the product. Brand story telling remains paramount in store, and LEGO sees the store as the mechanism to “take people into different places” and deliver a journey of imagination and discovery. Far from stepping back from the store, in 2023 LEGO will build on its existing retail footprint.
Martin described the store as an opportunity for LEGO to engage with it customers and gain their feedback which influences the future of their store offerings and products that they sell as part of their forthcoming collections, sets and products/services.
LEGO doesn’t differentiate between its on- and off-line sales channels, but rather looks to blend the physical and digital buying journeys – but only when it makes sense to do so. Martin acknowledged that they see that the two channels need to be executed differently, but “the common denominator centres around building LEGO experiences.” In many cases, LEGO felt digital-only experiences didn’t make sense for its brand, but when digital was layered over IRL store, it did added extra value to customers and made their shopping visit with LEGO even more memorable.
“People won’t remember that they bought from us by – or interacted with – a mobile device in-store, but they will remember that time they came into a LEGO store and they were a ninja for a second,” Urrutia said, which is why encouraging imagination and letting children play in their store spaces is so important in LEGO’s customer engagement journey and physical retail remains “the lighthouse of the brand.”
“If we want people to come and engage with our brand in the store, we need to think how they want to spend their time with us, from family time and mom’s coming in with strollers and their children for playdates to LEGO lates, which are sessions for adults that tap into their ‘passion points’ and offer experiential and social gatherings in the evening that turn the store into a community and social space.”
Building a flagship ecommerce experience
Of course, like many brands, LEGO saw an acceleration to digital over the course of the pandemic, which meant it had to evolve its online presence further – but the key to creating compelling online experiences for the toy brand was to ensure that the brand experience was consistent with the immersive brand-led in-store environment.
And that meant not just through the design – unifying colours, navigation and shopping journeys – but also keeping the same mindset and personality on lego.com as it could deliver in its stores. “We need to create a ecommerce flagship experience,” Martin added, taking the best of in-store and building it online. It added services including livestreaming and store associates demonstrating products or set builds into its digital shopping journeys to translate the personal interaction available in-store translated in its ecommerce world.
Without innovation, stores can become ‘legacy’ too
Often, we talk about legacy in terms of old or out-dated technology that has run its course, and no longer fits the new needs of the business. Martin warns that, without innovation and keeping things ‘fresh’ in-store, bricks-and-mortar can just as quickly become legacy if retailers aren’t willing to adapt and evolve their offer to keep shoppers engaged and providing them with a reason to visit.
LEGO’s strategy for avoiding cruise control in-store is one of constant evolution, in which it builds in ‘retail-tainment’ – experiential and immersive in-store experiences, services and activities, to keep finding new ways to emotionally connect with shoppers and engage with their passion points. For example, as mindfulness and wellness came to the fore in customers’ psyches during the pandemic, LEGO offered workshop sessions within the store that allowed customers to interact and play with the products in the store and focus on mindful activities.
In a bid to continually shake up the store’s status quo, LEGO also runs its BrickLab – an innovation hub that looks at tech across its physical and digital store estates and continually trials and tests ways to improve the customer journey.
Let customers shape the products and experiences of the future
It also religiously builds customer feedback not only into shopping journeys and the buying experiences it offers, but also through to the product itself.
Store associates are a key customer listening tool in capturing customer feedback and new ideas that their customers tell them about in-store.
Digitally, it has also set up ideas.lego.com, an online community hub which allows customers to create new products or sets that they would like to see in the future. Those gaining 10,000 votes or more will go to a LEGO Committee who will discuss whether they will then produce the ideas or products moving forwards, meaning that both the customers and the in-house product team at LEGO are creating the future ranges together collaboratively. And this has prompted some of their best-selling recent ranges, including the LEGO Yellow Submarine and its Sesame Street collection.
Making an iconic plastic brick-brand more sustainable
And, as a brand that’s product centres around manufacturing plastic bricks, you’d be forgiven for thinking that sustainability isn’t part of LEGO’s play. But, to the contrary, LEGO isn’t shying away from building sustainability into its business.
By 2032, LEGO will mark its 100-year anniversary and it has already set itself several sustainability milestones as it heads towards its centenary. Small steps it has already implemented include using greener energy resources within its manufacturing base, as well as swapping out plastic packaging to paper bags to house the product within its boxes of LEGO sets.
However, bigger step-changes are afoot, and last year LEGO created its 1st LEGO brick created out of recycled materials but that still meets the rigorous safety and product quality controls for the brands bricks that need to withstand years of play.
LEGO is also looking towards circular retail – as a brand that already enjoys a long ‘play-life’, with many of its customers keeping their childhood LEGO sets and passing them down to their children and grandchildren, last year LEGO donated 300kilos of used LEGO bricks to be reused, and spells a further opportunity to look at news ways to further lengthen the product lifespan through re-sale and reuse in the future.
As part of its wider ESG commitments, LEGO is also ensuring their products reflect better representation across gender and abilities. It now ensures traditionally ‘male-oriented’ LEGO sets, such as their scientists or astronaut ranges have female representation in their LEGO characters, as well as bringing more diversity across its LEGO characters, so children from background or of any ability can see themselves in these roles during play and imagine what and where they want to be when they grow up.