Demand outstripping supply (at least in North America)

datsunrobbie · September 2016

Pricing is an art. There are a lot of people who will jump at buying an item for $19.99 that would not buy for $20.00, despite the fact that the prices are practically identical, because it is no longer "under" $20. A lot of people will use the min/max price cutoffs when shopping on websites, and see a serious drop in the number of items available at their chosen cutoff compared to searches in prior years. They are not interested in why there are fewer sets in their price range, they are just annoyed that there are fewer sets in that price range and will explore alternatives that ARE in their price range.

That's why, in the US, a great many items are priced at $xx.99. An insignificant rise in the actual price is seen as drastic when it crosses certain thresholds.

Aanchir · September 2016

TigerMoth said:

Aanchir said:

But now that I've pointed out sticker prices in the US have in fact not risen in the past year...
What I said was that the impression here was that prices there have risen. Actually, that's a second-hand impression - it comes from reading posts from Americans grumbling that they think prices have risen and that they no longer benefit from discounts.

ryjay said:

What people need to understand is pricing on a toy is based a lot on perception
There you go - impression; perception.
Now I believe, based on my perception, all Star Wars sets have increased in price this year by as much as 10%....I've stopped buying.
@Aanchir - You can get out your tables of data and prove what you like, but it's largely irrelevant if the customers believe something different - because it's their opinions that matter.

Aanchir said:

still you haven't explained why LEGO could maintain sales growth in the United States for over a decade of steadily rising sticker prices, only for that growth to stop in a year of no meaningful increases in sticker price.

I don't need to. You only think I do because you're trying to apply logic to the situation. When it comes to people, logic is trumped by opinions, impressions and perception.

But the perception that prices are rising is not remotely new. That's been the widespread perception for at least a decade, and some years it's actually been backed up by reality, and yet it hasn't stopped the American market from experiencing reliable year-to-year sales growth. So that perception fails to account for what changed between last year and this year.

Furthermore, if consumers' perception is that this year's LEGO Star Wars prices are 10% higher than last year's when the reality is that they're actually nearly 9.6% LOWER ($43.13 on average last year, $38.95 on average this year), how is the LEGO Group expected to respond to that? Cutting prices even more would only work if the perception of the prices reflects the reality of them, which in this case it clearly doesn't.

SumoLego · September 2016

There must be something wrong with the company if they are reducing prices.

Wah-wah-wah.

Aanchir · September 2016

SumoLego said:

There must be something wrong with the company if they are reducing prices.

Wah-wah-wah.

I figured they just didn't expect the Star Wars spin-offs like Rogue One to generate as much hype as main Star Wars movies like The Force Awakens.

TigerMoth · September 2016

Aanchir said:

But the perception that prices are rising is not remotely new. That's been the widespread perception for at least a decade, and some years it's actually been backed up by reality, and yet it hasn't stopped the American market from experiencing reliable year-to-year sales growth. So that perception fails to account for what changed between last year and this year.

My perception is that Americans have been complaining significantly more about pricing, probably because they have also perceived the prices have risen. That is new.

Go to a brand store. I pick a brand store because it's probably about the only place that has the same format there as here. Look in the window. You will probably find the most expensive sets. What's in that window give people a perception of how expensive the product is - something that has risen over the years - particularly if you ignore Star Wars sets. Therefore "(all) LEGO sets have risen in price". You want to prove it's not true? Fine, but that's not the perception. (Few themes are universally popular. However, most people can appreciate why some are expensive, even if they themselves aren't interested. Star Wars tends to generate more polarised opinion.)

You want to average prices; I've quoted maximums. You can't say that either is the "right" one to use for how people feel about the subject, because it's down to the individual. Perhaps the price of the Winter Village set or of the advent calendars is significant in determining how people are going to view the product as a whole for the next couple of years, after which, number 3 son will be the age of number 2 daughter and the scenario different.

The problem is that those non-rising "rising" prices eventually go through a barrier, as @datsunrobbie says. In the UK, the Eiffel Tower was £149.99, the Taj Mahal was £199.99; Tower Bridge was the outrageous price of £204.99. That £5 difference was more significant than the £50. Now somebody will go away and calculate the price per piece (which probably makes things worse), but that £5 difference presses a different button to simple price rises. The American button is probably in a different place with different sets, depending on the magic of the numbers concerned.

You can't expect perception to account for anything or to be accountable to anything because it's irrational.

how is the LEGO Group expected to respond to that?

By using a little something called market research. Hey! More Bricksetters than usual are griping about price and saying they're less inclined to buy. The statistics show they are clearly wrong, but why do they feel that way? There are people that get paid lots of money to answer questions like that.

SumoLego · September 2016

Aanchir said:

SumoLego said:

There must be something wrong with the company if they are reducing prices.

Wah-wah-wah.

I figured they just didn't expect the Star Wars spin-offs like Rogue One to generate as much hype as main Star Wars movies like The Force Awakens.

I was being facetious.

dougts · September 2016

I'll add my 2 cents to the perception argument. it doesn't matter what the price per piece or price per gram tell us - only us tiny group of AFOLs knows, understands, or cares about these numbers. but what does matter is what does it appear like I am getting for my money. I chose 2011-2012 as a comparison because I think that was right around the time people started noticing and vocalizing an increasingly poor value/money ratio here in the US. So, some comparisons:

---------------
in 2012 CITY, $40 gets you this:
http://brickset.com/sets/4438-1/Robbers-Hideout
in 2016 CITY, $40 gets you one of these:
http://brickset.com/sets/60108-1/Fire-Response-Unit
http://brickset.com/sets/60111-1/Fire-Utility-Truck

in 2012 CITY, $60 buys you:
http://brickset.com/sets/4429-1/Helicopter-Rescue
But in 2015 CITY, you would have to spend an extra $10 to get this:
http://brickset.com/sets/60068-1/Crooks-Hideout

2012 CITY, $80 gets you
http://brickset.com/sets/4440-1/Forest-Police-Station
Back in 2015/16 CITY, again it's an extra $10 for one of these:
http://brickset.com/sets/60069-1/Swamp-Police-Station
http://brickset.com/sets/60132-1/Service-Station

in 2013, for $120:
http://brickset.com/sets/60026-1/Town-Square
A comparable set in 2016 CITY costs you a whopping $190!!!
http://brickset.com/sets/60097-1/City-Square
----------------
Marvel:
2012 $30: http://brickset.com/sets/6873-1/Spider-Man-s-Doc-Ock-Ambush
2016 $30: http://brickset.com/sets/76048-1/Iron-Skull-Sub-Attack

2012 $50: http://brickset.com/sets/6868-1/Hulk-s-Helicarrier-Breakout
2016 $50: http://brickset.com/sets/76041-1/The-Hydra-Fortress-Smash

2012 $70: http://brickset.com/sets/6869-1/Quinjet-Aerial-Battle
2016 $80: http://brickset.com/sets/76032-1/The-Avengers-Quinjet-City-Chase
------------------
DC Superheroes:
2012 $50: http://brickset.com/sets/6864-1/Batmobile-and-the-Two-Face-Chase
2015 $50: http://brickset.com/sets/76026-1/Gorilla-Grodd-Goes-Bananas

2012 $70: http://brickset.com/sets/6860-1/The-Batcave
2015 $70: http://brickset.com/sets/76028-1/Darkseid-Invasion
------------------
Creator:
Lighthouse lovers could buy #5770 for $40 in 2011. #31051 costs them $60 in 2016
2012 Treehouse #31010 for $30 compared to 2016 treehouse #31053 for $35
2013 cottage #31009 for $25. 2015 beach hut #31035 for $30
2014 #31025 for $40 compared to 2015 #31038 for $50 - just 1 year apart!
------------------
Star Wars:
2012 X-Wing #9493: $60
2016 X-Wings #75149: $80

$50 2012: #9495 Y-Wing
$50 2016: #75083 AT-DP
------------------

inflation is basically a cumulative 4% from 2012 to 2016, so that doesn't come close to accounting for the apparent loss in value. Also, keep in mind that wage increases in the US for most people have not kept up with price increases, as such real purchasing power has flatlined or gone down for many people - and that is a much more important figure when it comes to non-essential purchases.

Aanchir · September 2016

TigerMoth said:

Aanchir said:

But the perception that prices are rising is not remotely new. That's been the widespread perception for at least a decade, and some years it's actually been backed up by reality, and yet it hasn't stopped the American market from experiencing reliable year-to-year sales growth. So that perception fails to account for what changed between last year and this year.

My perception is that Americans have been complaining significantly more about pricing, probably because they have also perceived the prices have risen. That is new.

You want to average prices; I've quoted maximums. You can't say that either is the "right" one to use for how people feel about the subject, because it's down to the individual. Perhaps the price of the Winter Village set or of the advent calendars is significant in determining how people are going to view the product as a whole for the next couple of years, after which, number 3 son will be the age of number 2 daughter and the scenario different.

The problem is that those non-rising "rising" prices eventually go through a barrier, as @datsunrobbie says. In the UK, the Eiffel Tower was £149.99, the Taj Mahal was £199.99; Tower Bridge was the outrageous price of £204.99. That £5 difference was more significant than the £50. Now somebody will go away and calculate the price per piece (which probably makes things worse), but that £5 difference presses a different button to simple price rises. The American button is probably in a different place with different sets, depending on the magic of the numbers concerned.

You can't expect perception to account for anything or to be accountable to anything because it's irrational.

how is the LEGO Group expected to respond to that?

By using a little something called market research. Hey! More Bricksetters than usual are griping about price and saying they're less inclined to buy. The statistics show they are clearly wrong, but why do they feel that way? There are people that get paid lots of money to answer questions like that.

As somebody who actually lives in the US, I can tell you that from my experience, complaints about LEGO prices are no more or less common than ever this year. LEGO has always been expensive, and there have always been innumerable people who believe it's TOO expensive, and who naively imagine that it used to be cheaper. Widely-shared posts like What Happened With LEGO? from 2013 and Does It Feel Like LEGO Bricks Just Keep Getting More Expensive? from 2011 attest to how widespread and long-standing this perception has been.

I was wondering if you'd ever bring maximum prices up. I haven't mentioned them so far because I didn't know if you'd consider them relevant. But surprise, surprise! Those have gone down since last year as well — and even more consistently across the top-selling themes! Last year's biggest and, incidentally, best-selling non-D2C Star Wars set was the Millennium Falcon ($150), this year the biggest is Captain Rex's AT-TE ($120). Last year's biggest and, again, best-selling Friends set was the Heartlake Grand Hotel ($130), this year the biggest is the Amusement Park Roller Coaster ($100). Last year's biggest City set was the City Square ($190), this year's is the Volcano Heavy-Lift Helicopter ($150).

Last year's biggest and — wouldn't you know it! — best-selling non-D2C Ninjago set was the Final Flight of Destiny's Bounty ($120), while this year's biggest is the TRU-exclusive Samurai X Cave Chaos (also $120), followed by the general retail Ultra Stealth Raider ($100). The only of last year's top five themes with a higher maximum price this year than last is Duplo, with last year's $60 Forest and Large Creative Box surpassed by this year's $100, TRU-exclusive "Around the World" set (however, the next largest set, the Creative Construction Basket, is still just $60).

And your comment about general opinions being influenced by UCS or D2C sets they see in the window of the LEGO store? Not sure if you've been to the United States, but the reality is that most US buyers have never been to a LEGO store, let alone shopped at one. There are just 82 LEGO stores in the United States, compared to 864 Toys 'R' Us stores, 1,795 Targets, and 5,229 Walmarts. Do you really believe that the perception of LEGO prices for the entire country is based on what sets 82 stores display in their windows? No matter how many times you try and change the conditions to prove your point, the reality of the matter stands firmly against it.

Perception can indeed be irrational, but YOU'RE the one who claims perception somehow neatly explains this year's stalled sales growth in the United States, while dismissing much more tangible factors like supply shortages and marketing budgets as "spin" or "a fiction". You've been unable to provide so much as a shred of evidence supporting your argument — just a nebulous sense that Americans are grumbling more about prices this year than in any of the past eleven years, and an even more nebulous sense of what exactly they're grumbling about.

I don't know why you're assuming LEGO doesn't do market research to figure out how high or low they should price their products. But even if they didn't and they were to start this year, I guarantee you Bricksetters wouldn't be the sample they focus their research efforts on.

dougts · September 2016

^ you realize "best-selling set" in LEGO terms is raw dollars, and not units right? that gives the high price point sets a big leg-up in that race, and honestly isn't all that revealing in this debate. After all, if it takes 2 x-wing sales to match (slightly better) the total of 1 MF sale, then LEGO would have to sell twice as many X-wings than MFs to be the "top selling set" (in the theme).

perhaps the top end prices went down this year because those sets didn't reach sales goals, and perhaps consumers complained more than usual about the high prices? one year is not a trend, it is a single data point.

we all know City Square was a badly overpriced set. There are a number or badly overpriced City sets this year too (60132 and 60111 probably the most egregious). Perhaps LEGO is hoping that they can get more people to buy overpriced mid-range sets than were buying overprices high-range sets.

dougts · September 2016

^ i would also guess that LEGO calculates "best selling sets" using the MSRP, and not the actual sales price (they almost certainly don't have complete or accurate data from all their third party retailers for that), which means set like the City Square, which was sold on significant discounts regularly, are probably getting "overcounted" in that calculation.

dougts · September 2016

Aanchir said:
As somebody who actually lives in the US, I can tell you that from my experience, complaints about LEGO prices are no more or less common than ever this year. LEGO has always been expensive, and there have always been innumerable people who believe it's TOO expensive, and who naively imagine that it used to be cheaper. Widely-shared posts like You've been unable to provide so much as a shred of evidence supporting your argument — just a nebulous sense that Americans are grumbling more about prices this year than in any of the past eleven years, and an even more nebulous sense of what exactly they're grumbling about.

I also live in the US, and in my experience, complaints about LEGO prices in fact ARE up in the past 2-3 years compared to 2008-2013. But all we have are anecdotes, so i guess it's my impression against yours. Also, to be fair, you haven't exactly "proven" anything either. This is all just opinion, and we - including you - are all guilty of cherry-picking our evidence to meet our own narrative.

dougts · September 2016

Aanchir said:
As somebody who actually lives in the US, I can tell you that from my experience, complaints about LEGO prices are no more or less common than ever this year. LEGO has always been expensive, and there have always been innumerable people who believe it's TOO expensive, and who naively imagine that it used to be cheaper. Widely-shared posts like You've been unable to provide so much as a shred of evidence supporting your argument — just a nebulous sense that Americans are grumbling more about prices this year than in any of the past eleven years, and an even more nebulous sense of what exactly they're grumbling about.

I also live in the US, and in my experience, complaints about LEGO prices in fact ARE up in the past 2-3 years compared to 2008-2013. But all we have are anecdotes, so i guess it's my impression against yours. Also, to be fair, you haven't exactly "proven" anything either. This is all just opinion, and we - including you - are all guilty of cherry-picking our evidence to meet our own narrative.

77ncaachamps · September 2016

As Lego consumers, we're now used to the pricing strategy: don't buy at first unless 1) it's a hot item or 2) you really cannot resist.

Because a couple of months from now, there will be 20% sales at TRU, 15-25% discounts on Amazon, or, if you're really patient, 40-50% sales.

Lego and its retailers have conditioned us in this way.
If this affects their bottom line, then they need to rethink their pricing strategy.

SIDE NOTE: Reading this posts makes me wonder where the saturation point for Lego sets, parts, etc. (new and used) really lies. I know it's not static but we have to be pretty close to it (about 75%?), I think.

TigerMoth · September 2016

Aanchir said:

LEGO has always been expensive, and there have always been innumerable people who believe it's TOO expensive, and who naively imagine that it used to be cheaper. Widely-shared posts like What Happened With LEGO? from 2013 and Does It Feel Like LEGO Bricks Just Keep Getting More Expensive? from 2011 attest to how widespread and long-standing this perception has been.

Sure. But do you think that anybody ever reverses that opinion? I doubt it - they believe their point of view is true, and continue to do so. However, there will be people who adopt that view, so the numbers increase and they become more significant.

I was wondering if you'd ever bring maximum prices up. I haven't mentioned them so far because I didn't know if you'd consider them relevant. But surprise, surprise!

Surprise, surprise what? They are relevant, although I don't know how relevant. I simply used them as a different example of how you could cut the cake. I also mentioned Christmas sets. You then come back with another example. You can do this almost forever, but the point remains that you can't prove anything about people's perception by quoting raw numbers.

Not sure if you've been to the United States, but the reality is that most US buyers have never been to a LEGO store, let alone shopped at one.

Now you're being perverse. I've already said that I used the example of brand stores because that was the only point commonality between the two countries - when I worked in the US, it wasn't anywhere on my list of priorities to visit toy shops and to study how they compared to those in different countries.

Most people everywhere don't even know brand stores exist. However, what I said applies to any stores that use product promotion rather than being just box-shifters. It applies to advertising and even the catalogues, where the sets that are at the front of the "shop window" of a child's eyes are the most impressive, and most expensive.

No matter how many times you try and change the conditions to prove your point, the reality of the matter stands firmly against it.

I'm not trying to change the conditions, just countering what you say using your own methods. You're trying to use facts to try to disprove something that's only loosely connected to those facts; a different angle on those facts does the opposite.

dismissing much more tangible factors like supply shortages and marketing budgets as "spin" or "a fiction".

For a kick-off, they not tangible; they're pure hearsay - which is essentially where we came in. I've been through way who some those arguments simply don't make sense. The presentation of the results contained many insincerities and seemed to be designed to not say things.

just a nebulous sense that Americans are grumbling more about prices this year than in any of the past eleven years, and an even more nebulous sense of what exactly they're grumbling about.

Nebulous? When people come along and say that their perception is as I've mentioned and others also don't believe what we're supposed to believe?

I don't know why you're assuming LEGO doesn't do market research to figure out how high or low they should price their products.

I'm not - you asked a question; I gave you the answer - market research. I made no comment about whether that was being undertaken.

I guarantee you Bricksetters wouldn't be the sample they focus their research efforts on.

Probably not - and it would be rather difficult anyway. However, I wouldn't guarantee anything - they would target any negativity they had the resources and will to cover in the order they thought would be most beneficial.

TigerMoth · September 2016

77ncaachamps said:

Reading this posts makes me wonder where the saturation point for Lego sets, parts, etc. (new and used) really lies. I know it's not static but we have to be pretty close to it (about 75%?), I think.

TLG has 85-90% of the US market in construction toys. At that level, the actual saturation point is a bit moot. If you want to think in wider terms, it all gets a bit hazy.

AustinPowers · September 2016

Plus, if anyone from the US would like to complain about Lego being expensive, simply come over here to Europe (or, even better, Australia) and compare the prices to the ones you have complained about at home.

As soon as you get back to the US, you won't believe how happy you will be with the prices you have to pay - because most of them are much cheaper, especially if you like Star Wars or Superheros stuff.

Go figure.

77ncaachamps · September 2016

AustinPowers said:

Plus, if anyone from the US would like to complain about Lego being expensive, simply come over here to Europe (or, even better, Australia) and compare the prices to the ones you have complained about at home.
As soon as you get back to the US, you won't believe how happy you will be with the prices you have to pay - because most of them are much cheaper, especially if you like Star Wars or Superheros stuff.
Go figure.

Funny. I was in England this summer.

Sure the US$ was stronger then (still is, relatively speaking) but the Disney minifigs were cheaper than they were here in the U.S.

Sets though were slightly higher than their US counterparts at the Lego store in Paris (Les Halles).

CCC · September 2016

Plus it is usually easy to get discounts here (UK) on non exclusive sets. If it is not 20% off, forget it. 30-33% is more usual and 40-50% if you are lucky.

TigerMoth · September 2016

AustinPowers said:

Plus, if anyone from the US would like to complain about Lego being expensive, simply come over here to Europe (or, even better, Australia) and compare the prices to the ones you have complained about at home.

For Europe, that's no longer true. As I said earlier it used to be option to consider personal imports from the US, although European duties then made it marginal. It's no longer even worth considering because that particular playing field has been levelled - and you still have to pay import duties.

Europeans think prices are expensive, but Americans are ahead of the game on that one (and wish they weren't) because their prices used to lag ours. Putting that all together probably means European prices are cheaper, but the perception is that they're not, and it's that what counts.

MAGNINOMINISUMBRA · September 2016

As an Australian it amuses me greatly to listen to you overseas folks bitching about pricing - case in point - the new DS over here is 799 AUD (600 USD, 450 GBP)! A lot of people don't seem to realise that when you get market saturation at the level that TLG has, price increases are driven entirely by what the market will continue to support. It's a lot more difficult (in fact nigh on impossible) to translate that into marketing spin though - they can't exactly come out and say that price increases are entirely driven by the fact that they are the clear market leader and people will continue to cop price increases accordingly. TLG seem to be well aware of the fact the are a luxury brand (with an enviable level of market saturation)and act accordingly...

dougts · September 2016

CCC said:

Plus it is usually easy to get discounts here (UK) on non exclusive sets. If it is not 20% off, forget it. 30-33% is more usual and 40-50% if you are lucky.

at 30%-25% off in UK, and adjusted for VAT, you are getting LEGO cheaper than many of us in the US. I can get almost anything for up 10%-20% off, but anything north of that is selective sales on selective items. 30% off or more is a complete pipedream for me, unless it's a mass online sale with a lot of inventory.

Fauch · September 2016

I looked at s@h US a few times and there are always dozens of discounted sets. in France they can often be counted on one hand and they tend to be stuff like key rings. now on the other hand, amazon has better deals, I can gain 20 - 25% on many sets.

ACWWGal2011 · September 2016

"Not sure if you've been to the United States, but the reality is that most US buyers have never been to a LEGO store, let alone shopped at one."

I've been to one but the trips are rare since lego is to lazy to get a store to Louisiana so our "local" store is Houston, tx. My last runs were July 1st and 2nd while on vacation and b4 that was March 24, 2012

binaryeye · September 2016

Fauch said:

I looked at s@h US a few times and there are always dozens of discounted sets.

How many of those were in stock?

S@H is likely the last place you'll find good discounts on LEGO in the US. When they do discount, it's 10% to 20% off on generally unpopular sets. There are occasional limited-stock "clearances" of poor-selling sets (e.g. Chima, Galaxy Squad) at 30% off and the rare clearance of cheap seasonal sets at 50% off.

Yes, there's the always-trotted-out $100 UCS B-wing as proof that the US gets all the good deals. But in reality, that sale happened in the middle of the night and lasted all of 20 minutes.

Also, this is much easier to navigate than LEGO's site.

ChrisJThunder · September 2016

Supply of Lego also seems to be regionally based - cities and locations with more Lego fans take up more of the supply while smaller fanbase locations have more sets to choose from because no one in that area really buys Lego much. I'm in the middle of nowhere, Montana right now and my local Target and WalMart have a great Lego selection. There's a diverse array of sets and I think it's probably because my roommate and I are the only ones on campus buying Lego :P But take a larger city with a larger dedicated Lego fanbase, and I'm sure the results are different.

Recce · September 2016

Both US and EU had it good when it comes to lego prices.

The old 10188 DS already selling in SG for S$900 back then (more than US$650), I can't imagine the price of this new updated set...

AustinPowers · September 2016

Fauch said:

I looked at s@h US a few times and there are always dozens of discounted sets. in France they can often be counted on one hand and they tend to be stuff like key rings. now on the other hand, amazon has better deals, I can gain 20 - 25% on many sets.

Quite right about Lego S@H sales and deals. Just checked again, US: 76 offers (63 in stock), Germany: 14 (6 in stock). Of course, on both sides of the pond the majority of sales and deals currently are keychaines, but even so, the relation of ten to one is telling, especially as often there are regular sets on sale on the US S@H site, whereas over here regular sets on sale are a rare occurence.

Bumblepants · September 2016

AustinPowers said:

Quite right about Lego S@H sales and deals. Just checked again, US: 76 offers (63 in stock), Germany: 14 (6 in stock). Of course, on both sides of the pond the majority of sales and deals currently are keychaines, but even so, the relation of ten to one is telling, especially as often there are regular sets on sale on the US S@H site, whereas over here regular sets on sale are a rare occurence.

Not sure how you see 63 in stock. It is almost entirely out of stock Bionicle and Mixels that dried up ages ago. There have been some decent deals on S@H US over the last year but currently not much at all.

Demand outstripping supply (at least in North America)

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