2B Benefits to the organization and wider partners of new initiative. This is the “Why?”
Why does Lego need Lego Learn?
To inform the development of the new initiative, the Digital Innovation Tool and Digital Transformation Impact framework were used to see if Lego Learn effectively solves strategic challenges and adds value to the organization and partners.
Digital Transformation Impact
The Digital Transformation Impact framework below gives a brief overview of the impact that Lego Learn will have on the organization. The initiative will significantly enhance human intelligence, which is important to engaging customers, which is a weak point revealed in the earlier Digital Evaluation Tool. The initiative also results in a strategic re-direction as a result of the educational focus, which is important to sustaining an advantage in the video game focused competitive landscape, and realigning with key brand values.
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Digital Innovation Tool
The insights from this framework reveal that Lego Learn primarily enhances customer engagement and products/services. These enhancements help Lego fill the white space in the Competitor's Analysis that shows opportunities in data analytics and educational toys. They also help solve the strategic challenges that include changing consumer trends and lack of engagement in the customer journey.
Why a subscription model?
As identified in Consumer Trends, subscription services are growing in popularity as consumers expect more convenience from companies. Though Lego offers delivery services, they have yet to offer repeated deliveries. Enabling customers to return their Lego sets to receive Lego credits reduces prices for consumers, and manufacturing costs for Lego and helps to further their mission of transitioning to a circular economy.
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​​For companies, a subscription model also enables them to generate guaranteed revenue as compared to a one-time charge model. Other benefits include increasing brand loyalty and strengthening customer relationships.
Why an educational focus?
Expanding Lego’s educational offerings leverages the projected growth in the educational toy sector as identified in Consumer Trends. It also addresses a key strategic challenge of staying close to Lego’s brand values. The educational topics in global awareness and STEAM furthers Lego’s mission of developing vital skills for a child’s future and prepares them for our increasingly globalised world. By working with Area9 Lyceum, Lego can take advantage of Area9 Lyceum’s expertise in personalised learning to elevate their educational focused Lego sets. Area9 Lyceum’s previous partnerships with higher education programs have shown promising results such as 10% improvement in exam scores and 90% more time for instructors to spend on active learning than administrative work (Area9, 2021). This partnership would help Area9 to expand their customer base and introduce their product through a new sales channel. Area9 has not partnered with an educational toy company. Entering a new market would challenge Area9 Lyceum to come up with a new learning system related to play and potentially increase their product offerings.
Why personalisation?
The advanced AI technology and resulting customization of the subscription will drive customer engagement and loyalty, which ultimately leads to a higher customer lifetime value (Arora & Ensslen, 2021). The data insights from this product will also allow Lego to improve other products, like a la carte brick sets and digital games. The partnership with Area9 expedites the launch of the AI personalisation feature, which is important because AI can cost millions of dollars and a lot of time to develop (​​Knight, 2021). Being able to access Lego’s valuable customer data for research would also benefit Area9, as they are active in education research. Most importantly, the customization model prevents ‘choice overload’ when parents choose Lego products (Tugend, 2010).
Why a digital app?
As identified in Consumer Trends, children are increasingly using devices and a key strategic challenge is for Lego to cater to these digital habits. Additional research shows that introducing iPads in classrooms positively affects the development of children's literacy, numeracy and communication skills (Nursery World, 2017). Thus, incorporating a digital app with Lego Learn will promote kids learning and further Lego's education mission.
References
Area9, 2021. Case studies – personalized learning at scale. Area9 Lyceum. Available at: https://area9lyceum.com/experience-adaptive/case-studies/ [Accessed March 7, 2022].
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Arora, N. and Ensslen, D. (2021) The value of getting personalization right--or wrong--is multiplying, McKinsey & Company. McKinsey & Company. Available at: https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying [Accessed: March 5, 2022].
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Knight, W. (2021) Ai's Smarts now come with a big price tag, Wired. Conde Nast. Available at: https://www.wired.com/story/ai-smarts-big-price-tag/ [Accessed: March 5, 2022].
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NurseryWorld, 2017. Study finds iPads benefit children's learning. Nursery World. Available at: https://www.nurseryworld.co.uk/news/article/study-finds-ipads-benefit-children-s-learning [Accessed March 1, 2022].
Tugend, A. (2010) Too many choices: A problem that can paralyze, The New York Times. The New York Times. Available at: https://www.nytimes.com/2010/02/27/your-money/27shortcuts.html [Accessed: March 5, 2022].
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Wharfe, C., 2021. Lego considering subscription service to sell retired sets. Brick Fanatics. Available at: https://www.brickfanatics.com/lego-subscription-service-retired-sets/ [Accessed March 2, 2022].