The launch for 10307 Eiffel Tower was a pretty chaotic and confusing affair, with the price changing twice in the span of several hours.
To help understand this very strange sequence of events, please join me as I recap what happened, and look at what’s happening in the toy/retail industry and why this may ultimately be a sign that LEGO fans are finally baulking at price increases and overly expensive sets.
Update: Head to my review of 10307 Eiffel Tower for an in-depth look at this incredible set, and see what I thought of it. Spoiler warning: this is a truly awe-inspiring set.
If you’re a subscriber and was notified when I first unveiled LEGO’s tallest ever set, you may have noticed that when I first posted, the American, Canadian and UK price was US$629.99 / CAD$799.99 / £554.99 respectively.
For reference, these are the locked in current pricing to avoid further confusion.
- 10307 Eiffel Tower [US] – US$629.99
- 10307 Eiffel Tower [AUS] – AU$999.99
- 10307 Eiffel Tower [UK] – £554.99
- 10307 Eiffel Tower [EU] – €629.99
- 10307 Eiffel Tower [CA] – CAD$799.99
When the official product page went live on LEGO.com, I then noticed that the prices quoted had changed from the prices we were provided in the press release (sent to those in the LEGO Ambassador Network), and quickly updated the post to reflect the new prices – US$679.99 / CAD$849.99.
For context, this sometimes happens, and because there have been price increases this year, and this has occurred before where pricing information provided by LEGO can sometimes be outdated. I did find it odd that this only impacted the North American prices, and the UK, EU and Australian prices were unaffected.
I was slightly annoyed as I had recorded an Instagram reel, which I had to re-record and publish to reflect the “new” pricing – you can find the Reel on my Instagram where I quote the new US$679.99 price.
Unfortunately, the video of the reveal at Fan Media Days 2022 I uploaded to Youtube had the “old” US$629.99 text edited into it, and I couldn’t change it as it had been published.
I didn’t think too much of it and went to bed as it was pretty late in Australia, and when I woke up the next morning, I was greeted by several comments and emails (thanks for everyone for getting in touch!), letting me know that the price was wrong, and it was US$629.99.
This was me at about 7AM.
I then logged on to my computer, and double checked, and lo and behold, the prices had switched back to the original ones supplied to us initially – US$629.99 / CAD$799.99.
Why did this happen?
I’m not exactly sure what happened here, and it’s time to put on your standard issue tinfoil hat, so I’m going to speculate heavily here.
There could be one of two reasons why something like this occurs.
Genuine Human Error
The most simplest reason I can think of is that the E-Commerce team made an error with the pricing when loading it up to the system.
I work in e-commerce and this happen every now and then, and with so much happening this week with Black Friday / Cyber Monday and VIP Weekend sales, this is THE busiest time in the world if you work in e-commerce, with so much to do, and many, many changes being made on the site mistakes can happen, and I’ve had this happen to me and my teams many, many times.
LEGO flip-flopped on the price, landing on the most affordable option
Personally, I think that this was a backflip by LEGO going into the most crucial sales period for the toy industry, and wanting to ensure that the LEGO Eiffel Tower, one of their big flagship releases of the year sells as well as it could.
With the recent price increases, you might notice that last year’s big set, 10294 Titanic was priced at similar brackets, launching at US$629.99 before being bumped up to US$679.99 during the last round of price increases – I don’t think it’s a coincidence that those 2 numbers are identical.
I’m speculating that the LEGO Eiffel Tower was indeed earmarked to launch at the US$679.99, after taking price increases and general inflation into consideration, but internal discussions caused LEGO to bring the price back down to a more acceptable level.
I think in the span of a few hour, senior executives and leaders were locked in discussions on pricing, and as we’re 2 weeks into November (and halfway into Q4 – the most important quarter for the toy industry), the run rates and forecast of how the remaining 6 weeks were not looking good.
A call was then probably made to knock it back down to the original pre-increase price of US$629.99 for the US, which is LEGO’s biggest and most important market. I can understand why the Australian and European pricing was static – in Australia, the psychological AU$1000 mark is hard to crack, and the European pricing did seem pretty acceptable given exchange/freight rates which are more favourable to LEGO.
The Business and Market Context
For context, the toy industry, especially in the US has not been performing too well, with listed toy giants Mattel and Hasbro getting pummelled in the stock market following disappointing earnings and a gloomy outlook of Q4/Christmas holiday shopping season.
Mattel has shed about 15% of its value, after announcing that it would lower its full-year profit forecast, suggesting high inflation will take a toll on the holiday shopping season, and Hasbro has also suffered, after missing their earnings expectations for Q3, which is not a great forward looking indicator for Q4.
The retail and consumer discretionary sector, especially in the US and Europe has been grappling with challenges such as inflation, and consumers pulling back spending on non-essentials, and with many speculation that we’ll enter a recession in 2023, I bet these discussions have been the number one priority for LEGO’s leadership and commercial teams to solve.
If you listened to our recent Extra Pieces podcast, I did allude to this when discussing LEGO’s financial results, and outlook for the upcoming holiday season. The relevant part of the discussion is at about the 15 minute mark.
LEGO is also sitting on a LOT of inventory (as seen in their recent H1 2022 financial results), which has probably swelled in anticipation of Q4 and the Christmas shopping period, and LEGO is actively looking at ways to ensure product keeps moving off the shelves.
I also think that the impetus for this has come from LEGO’s recent batch of very expensive releases that have not been too well received by consumers: 76210 Hulkbuster (US$549.99), 21337 Table Football (US$249.99), 76405 Hogwarts Express (US$499.99) and 76215 Black Panther (US$349.99)
I have anecdotally confirmed from multiple sources, that these sets are not selling particularly well at LEGO Stores, and as a LEGO Affiliate that drives a not-insignificant amount of volume, I also have data that corroborates this as well.
Notice a pattern?
It could be a combination of a few things, inflation and cost of living pressures causing LEGO fans to cut their LEGO spending, but what I think is the true story is that these incredibly pricey sets are not being received well by fans who want a premium experience for a premium price – something that the most recent batch of expensive sets do not seem to deliver.
With so many underperforming big ticket sets (with the latest being 76210 Hulkbuster), I genuinely think a call was made by Leadership and Commercial teams to revert the pricing of 10307 Eiffel Tower back to the pre-price increase level to increase its chance of success, and sell as well as the Titanic did when it first launched.
Remember, the price increases were instituted to combat the effect of inflation, and higher input prices (cost of goods, freight, and general cost of business going up), all to ultimately preserve LEGO’s (admittedly) high margins on their products.
When push comes to shove, and when there’s too much inventory on the books heading into the holiday season, sacrificing margin becomes a much more compelling case.
Well, that’s my theory at least. Thanks for indulging in my tinfoil toy economics, and for all I know, it could’ve been a genuine typo and error online from someone copy-pasting the Titanic’s price, but when you look at the broader picture, it’s undeniable that the toy industry, and LEGO is facing challenging headwinds and is doing everything it can to secure a successful Q4.
Ultimately, I think this is a win for North American consumers, who now get to access the 10307 Eiffel Tower for US$629.99 instead of US$679.99!
Plus, with VIP Weekend and Black Friday coming up, and a bevy of offers, GWPs and hopefully further sales, LEGO fans will hopefully be able to score some great deals that will lessen the pain of this incredibly enjoyable, but also increasingly expensive hobby.
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