LEGO Group sees 50% jump in eCommerce sales as digital investment reaps rewards

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The LEGO Group's investment in physical and digital retail channels have reaped the company rewards in the first half of this year. While the company did not offer specific statistics, it said that eCommerce sales across its proprietary as well as partners' platforms grew 50% compared with the same period last year.

During the first half of the year, the Group reported an overall 46% revenue increase to about US$36 billion compared with the same period last year. Consumer sales grew 36%, outpacing the toy industry and driving market share growth globally and in all major markets.

At the same time, LEGO's operating profit also jumped 104% to about US$12 billion compared with the same period last year, despite significant investments in major long-term initiatives such as a new retail store format, eCommerce capabilities, an enterprise-wide digital transformation, as well as efforts to make productions and operations more sustainable. Operating profit was also offset by increased freight and raw material costs.

In the first half of 2021, LEGO rolled out a new retail store format which will be introduced to around 60 stores during the second half of this year. The format was unveiled during the opening of the flagship store in New York City in June this year and is designed to create immersive, playful and memorable brand moments.

On the retail front, it continued to expand its global retail footprint opening more than 60 new LEGO branded stores in the first half of 2021, more than 40 in China. This brings the total number of LEGO retail stores as of 30 June to 737, with 291 of those located in China.

Meanwhile, market groups delivered double-digit consumer sales growth driven by execution and a diverse portfolio. Top-performing themes included LEGO City, LEGO Star Wars, LEGO Harry Potter, LEGO Creator Expert, and LEGO Technic.

The Group plans to accelerate investments during the second half of 2021 in a multi-year, enterprise-wide digital transformation. New digital platforms, products and ways of working will support a long-term ambition to digitally enable the LEGO brand to create experiences for consumers, partners and employees. Digital talent hubs were opened in Shanghai and Copenhagen in addition to its headquarters in Billund and hub in London to support this effort.

At the same time, the company has also made progress against its ambition to create more sustainable products. In June, it unveiled a prototype brick from recycled single-use PET bottles. It also completed a successful trial of paper bags designed to replace single-use plastic in boxes and will begin phasing in the new paper packaging from early 2022. This ensures the Group remains on track to make all packaging 100% sustainable by 2025.

lego paper bags 1

Group CEO Niels B. Christiansen explained that digitalisation and sustainability will have an especially critical play in creating a sustainable future for the business and advancing its mission to have a positive impact on children. According to him, its year-on-year growth benefited from fewer COVID-19-related restrictions compared with 2020 as its factories operated uninterrupted and the majority of retail stores reopened.

"We also saw the benefits of multi-year investments in eCommerce, product innovation and a global supply chain network. Our strong financial performance now allows us to accelerate strategic investments in sustainability and digitalisation," he added.

Moving forward, the company expects top-line growth to stabilise to more sustainable levels in the longer term as consumers return to pre-pandemic spending patterns. Christiansen said that this trend, combined with its plans to accelerate reinvestments into the future of the business, is expected to result in more normalised profit levels moving forward.

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