Thursday, May 19, 2011

How can Lego Drive Online Sales

Recently, my girlfriend asked me how can Lego drive traffic to their online stores and convert them into sales. Here is my response:

Lego provides products for both youths and adult enthusiasts and as a result of many years of building a loyal fan base through creating well-positioned and relevant products, Lego’s have become iconic within American culture. However, their fan base rarely visits the Lego website and purchases are usually made through other online retailers like Amazon or through brick and mortar stores, despite Lego offering exclusive products on their site. The company is therefore not able to capitalize on revenue and cost savings they would receive if customers bought directly through Lego’s website.

Unique to other product based websites, Lego has built a website with features such as games, product customization and an internal network. Though there is no social integration with Facebook or Twitter right now, the website is set up to be its own online community.

Company Analysis
The end goal for Lego is to drive profits. Whether that is through cost reduction or increased sales, they must find ways to achieve higher profit margins. By selling products from their web store they will increase profit margins by selling at MSRP and reducing supply chain costs. Lego’s comprehensive site features are meant to drive traffic to their site by bringing their offline community online. This should also increase sales made directly from the Lego web store.

According to, the typical visitors are female, ages 35-44, and with children and an average social gamer is a 43 year old female. Though not perfect information it is still an indicator that the site would benefit from gamification. Lego must use their customer analytics to better understand their visitor base and create a gamification strategy that align their user base to their goals through creating rewards that attract users and encourage web store sales.

Ways to Gamify
Social Integration – The first thing I noticed upon entering the site is that it isn’t socially integrated, which forces their social community to work independently from their website. Lego needs to leverage its already existing online community and create that link form social platforms like Facebook and Twitter to By becoming socially integrated, Lego will create a viral loop and traffic to the site will increase. Lego can start with social sharing and eventually move up the value chain towards social context as they build their social infrastructure.

Leaderboards – Lego has a whole host of social games that are exclusive to their website. Yet there is no visible form of competition. Providing a leader board for these games will invoke a level of competition among the community and will encourage users to come back often to play these games. This effect is similar to what social games experience on Facebook. Monthly leader board winners can be given Lego credit to drive sales to their store.

Badges - Lego’s site is built with a lot of features that users may not be aware of. The site can use badges to raise awareness to these features and reward ideal behavior. The badges should award the use of all their features and build a focus around the web store. For example, create a badge to award creating and publishing a Lego robot that can be purchased from the web store. It should also be encouraged to share this accomplishment through various social media channels.

Lego has become a household name in current American culture. They have effectively built their brand and created a loyal following. They have also built an online platform that helps bring the offline Lego experience to their website. However, users of the website may not be aware of the extensive offerings on the Lego site. Given their strong existing offline community and their platform, Lego should consider using Gamification techniques to help transition their offline community to an online community and thus increase traffic to their web store and increase profit margins.

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