Lego's new business model: Pleygo
December 12, 2013
LEGO has always fascinated me. In a previous post (LEGO CUUSOO – the WHAT’S NEXT for business in a non-linear world) I explored its journey from being a linear manufacturer of simple children’s products to building a more innovative and resilient business.
Det beste er ikke for godt which translates to Not even the best is good enough, was the motto of the founder of LEGO – that commitment to quality provided for many profitable years. Lego grew, and was loved by a global audience, it certainly was much loved by me. But suddenly, and unthinkably, Lego was hemorrhaging cash after several years of increasingly heavy losses. By January 2004 LEGO had a deficit of Dkr1.4bn (£144m). And its debts amounted to more than Dkr5bn. There was even speculation that the Kristiansen family would be forced to sell, or large parts of it, to an all-American, plastic-fantastic interloper such as Mattel. All Denmark mourned.
Since then the company has gone through something of a Renaissance.
LEGO is launching LEGO The Movie next year and they have also been exploring the idea of building a service / rental style model called Pleygo is like a Netlix-like rental service that allows families to swap Lego sets instead of purchasing new ones and creating more plastic waste in the process. The Lego swap service enables kids to try out and play with lots of different sets.
Each membership plan lets users play with one set at a time and they can be returned any time, with unlimited exchanges per month. For $15/month, you can play with small to medium sets usually up to 400 pieces. For $25/month, you can play with larger sets up to 800 pieces, and for $39/month, you can play with sets up to 5400 pieces.
Lego The Movie