'Tis the season... for thrifty shopping

Written by Jordan Schwarz on Nov 05, 2010 in - 0 Comments

It's November, and the holiday shopping season is nearly upon us. So, I'd like to take a momentary diversion from the world of LEGO trains to editorialize on the subject of holiday shopping... for LEGO sets, of course.

I came across an interesting article on Dealnews theorizing that this year, with the continuing economic downturn, retailers are doing their best to push toys selling for under $50. Moreover, the article suggested that toy manufacturers are trying to offer multiple, small items that work well together as opposed to big, expensive, all-inclusive toys.

These observations might apply to the toy market in general, but I think that the LEGO Group may be an exception. In the past few years, LEGO has taken strides to reduce their overhead costs associated with maintaining inventory, and one solution has been to create... you guessed it... larger, all-inclusive sets rather than multiple small sets with the same theme. (Trainheads: consider how TLG used to offer individual railcars, MoW vehicles, and structures but now tends to bundle multiple items into a single set.)

As a result of this - and other factors - the average price point for LEGO sets has crept up over the years. Growing up in the 1980s, I can remember how a $25 LEGO set seemed expensive, and a $100 set was virtually unheard of. Granted, inflation has adjusted prices upwards since those days. However, recall also the many small sets that used to be seen in the LEGO catalog. For example, the Town theme had dozens of small sets such as vehicles with perhaps 50 or 100 pieces. The modern inventory strategy adopted in the mid-2000s greatly reduced these offerings of small sets. Sets under the "magic" price point of $50 are no longer so common, and the sub-$50 sets  tend to be somewhat more limited in terms of play value.

An article published last year in LEGO Life (the LEGO Group's news magazine written for its employees) suggested that even in the down economy, LEGO toys were selling well, because parents watching their finances were selecting toys with a reputation for quality and long-term enjoyment - that is to say, LEGO toys. And, in years past, I recall seeing cleaned-out LEGO aisles at major retailers during the holidays. I expect that similar logic will again prevail this holiday season, and LEGO will likely enjoy a strong retail season. It will be interesting to see how the "magic" $50 price threshold affects sales of LEGO products.

Share your comments on the Railblog. Do you think LEGO products defy the magic $50 price threshold?

 

-Jordan

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