Lego and the lure of the Direct to Consumer channel

Posted by Thomas Andersson on

Direct to Consumer

As the retail industry has changed, more and more brand owners have decided to reach out directly to consumers instead of relying on a network of distributors, wholesale partners and retailers.

The advantages for brand owners can be hugely attractive. In particular the increased margins and the ability to control your brand.

Lego is the latest in a long line of brand owners which have pivoted from a wholesale model to an own-operated-store (OOS) revenue model. (source: FT.com)

D2C vary by retail sector

Fashion brands have been some of the more prolific brnad owners to pivot into the D2C channel. For interested readers, Moncler is a very good example of how to pivot into D2C from an established wholesale set-up as a way to maximise IPO outcome.

However, while fashion brands have mainly sought to capture retailer's margin, in Lego's case the reason for pivoting into D2C is more a case of survival.

The collapse of ToysRus was highly detrimental to the wider toy industry, especially for brands with a range of impulse buy products. Fewer and fewer retail outlets means fewer eyeballs on your products.

In addition, Lego has experienced huge competitive pressures as their brick patent lapsed.

To ensure the brand stands out it requires a presence on the high street.

The next huge task for Lego is to ensure their plastic bricks are made with sustainable materials.


Share this post



← Older Post Newer Post →

Related Posts

A Review of IMHX, NEC Birmingham, UK, 2019
IMHX, 24 Sep, 2019 NEC, Birmingham, United Kingdom STIQs verdict (of 5 possible): Event link: IMHX First of all ...
Read More
A Review of FT Future of Retail conference by Financial Times Live, 2019
FT Future of Retail Conference, 18 Sep, 2019 Royal Garden Hotel, West London, United Kingdom STIQs verdict (of 5 po...
Read More
Farfetch vs Boohoo: Two fashion retailers compared
Farfetch vs Boohoo Two pureplay online retailers (ok, Farfetch owns a few subsidiaries with physical stores and are ...
Read More