Lego plans to continue building its retail portfolio because it believes selling directly to consumers increases customer loyalty, the world-leading toy brand revealed in a session on multichannel retailing at the World Retail Congress 2009.
Matt Harker, vice-president of Lego Brand Retail America, said that selling directly to consumers not only increased customer loyalty, but also enabled it to increase branding and create unique consumer experiences in stores, as well as drive demand towards Lego’s commercial objectives. The Danish company has opened 15 of its own stores to date and is planning further openings.
He said there had been some anxiety among retailers that stock Lego that it would reduce their share of sales, but in fact he said by developing its own retail offer, sales have grown through all channels. Those customers who have a relationship with Lego through various channels, which include a club for fans of the brand and a magazine, spend much more, he said.
The company has created a seamless retail business where direct sales are counted as one entity whether through stores or the web, and staff are incentivised accordingly so that the channels are not in competiton. The stores are designed to be at the centre of their community, with events for schools and adult fans, for example, taking inspiration from Apple’s stores.
In the same session, McDonald’s UK operations director Richard Forte explained how McDonald’s UK had bounced back from its worst ever year in 2005, and highlighted the key role increasing the proportion of franchise restaurants had played in its recovery, which has experienced 12 consecutive quarters of growth.
He said the hands on approach of franchisees almost always has an immediate positive effect. “Franchising makes us, and keeps us, locally relevant. When a franchisee takes on a store we see an increase in guest count and a dramatic improvement in customer service,” Forte explained.n