Home Business Lego is about more than just kids’ toys—its adult collectors are proving lucrative for the Danish company’s $9.7 billion sales

Lego is about more than just kids’ toys—its adult collectors are proving lucrative for the Danish company’s $9.7 billion sales

0
Lego is about more than just kids’ toys—its adult collectors are proving lucrative for the Danish company’s $9.7 billion sales

[ad_1]

Now, adults are just as enthusiastic collectors of the Danish company’s colorful brick sets—and Lego is banking on them to grow. 

The trend started when Lego-loving kids took their fascination into adulthood, and continued to buy the brand’s elaborate collections. 

“We decided to focus on adults because we realized that we had a much bigger opportunity than we were tapping into,” Julia Goldin, Lego’s chief product and marketing officer, told the Wall Street Journal.

In 2020, Lego launched its adult-focussed category which boasts big (and more expensive) sets. Think Harry Potter’s Gringotts building, $700 Titanic replicas, and a $500 set of a town from The Lord of the Rings

Adults, who otherwise felt embarrassed to buy Lego for themselves have since gravitated towards the brand with its new “18+” labeling, Lego said. 

In about four years, Lego’s collection for grown-ups has expanded to 142 sets—roughly 15% of the total sets available in the U.S. It’s unclear how many of Lego’s consumers are adults.

Indeed, adult collectors have become critical to the growth of the toy industry, which faces the threat of inflation and higher interest rates curbing people’s discretionary spending. The “kidult” segment, for those aged 12 and above, has outpaced the children’s category within toys, according to data intelligence group Circana

Between 2019 and 2022, kidults’ contribution to the toy segment by sales has flourished from 23.4% to 28%. Their market for toys is now valued at €4.6 billion ($4.9 billion) across the U.K., France, Germany, Italy and Spain.  

“The kidults market has been outpacing the kids core part of the industry for a very long time,” said Circana’s global toys industry analyst Frédérique Tutt in a May report. “I believe there are still plenty of growth opportunities that brands, license owners and retailers can capture to grow this market much further.”

This opportunity bodes well for Lego, which already has a strong adult fan base as the dynamics of the toy industry skew more towards older players who likely have higher purchasing power.   

The Denmark-based Lego’s adult collectors seemed to have helped it outperform the broader toy industry in 2023. 

Lego’s revenues grew 2% last year, against an industry that shrunk 7%, notching $9.7 billion. While that’s the slowest sales growth the company has witnessed in seven years, it also points to how Lego was able to buck a trend that its other rivals struggled with. 

But Lego believes its kids are just as important, even if the scales of the toy industry may be tipping in favor of the “kidults.”

“Kids and learning through play will always be our focus and our ambition is to bring LEGO play to more children. Adults are important because they introduce children to LEGO building and they enjoy building together,” a Lego spokesperson told Fortune.

Lego’s adult-collector market could help the company even through 2024 as economic pressures continue to weigh on shopper’s purchasing decisions. Maybe it’s just a question of finding the right Lego Icons for them.

[ad_2]

Source link