Double VIP points.

Free Gift with Purchase over $AU120

Free Shipping on purchases of $AU200.

This is what I was hearing from the shop.LEGO.com banner ads as October 2016 got underway. Should these statements affect whether or not I go to the online LEGO store? I sat down to work out a solution to this conundrum, and who knows, it might just influence my behaviour in the future…

[Editors note: the principles of calculating the best value time to purchase from shop.LEGO.com, or your local LEGO store are consistant, however individual thresholds for shipping and the value of special offers vary between markets. You should always make your own decisions regarding your own money.  The LEGO Group is sure to release something else that you wish to buy in the future, so don’t worry if you can’t spend all of your money at once. Now read on…]

The shop.LEGO.com promotion for October, if ordering from Australia, was the London bus set (40220).  Initially revealed around the same time of the ‘Big Ben’ Creator set, it instantly appealed to me.  Decidedly smaller than minifigure scale, it reminded me almost instantly of the sets available in my childhood.  In those days, many ‘LEGOLand’ vehicles were 4 studs wide, whether they were a go-cart, family car, a fire truck, and earthmover or a semi-trailer. This is a set that I was terribly keen to get my hands on.

And it got me thinking: What should encourage me to make a purchase from shop.LEGO.com, when many of my local major retailers regularly offer 20% purchase price?

LEGO’s retail promotional techniques

LEGO does not routinely apply a global discount strategy in its own retail stores as a mechanism to drive sales.  Sales come up from time to time in the online store, but they tend to be offered on lines that are soon to retire. That said, discounts may be occasionally present for special promotions, such as on LEGO Star Wars Products, typically around the weekends closest to May the Fourth. This lack of routine discount is a technique employed by many companies, who do not wish to cheapen the public’s perception of their luxury brand.

They do use incentives, however.  Examples include:

• Bonus gift with purchase over $n: Individual values of n may vary depending on the relative value of your currency.  Typically this may be a small polybag with a set related to a popular theme, or a larger set such as the creator fountain, the London bus offered this month, or the new ‘Build a day’ set offered in November as an alternative to the ongoing Advent Calendars.
• Bonus gift with a related purchase: LEGO will frequently offer polybags related to a given theme.  This year, we have seen it done with LEGO Star Wars,  LEGO Friends and DUPLO, amongst others.
• LEGO VIP membership and points: Points accumulate with the majority of purchases made at the online as well as in Bricks and Mortar stores around the world, and can be redeemed for a rebate on future purchases.  VIP members are also offered early access to some direct to consumer products: examples this year would include the ‘Classic TV Batman’ Batcave, as well as the Assault on Hoth ‘UCS’ set.  There are occasions when bonus points are available, either on specific sets, or on the entire range.  I will discuss the value of these points later.
• Free delivery.  Now, where ever in the world you live, you can get free delivery on your LEGO order.  So long as you reach a minimum spend.  In Australia, this amount is currently $AU200 (Currently exchange rate $US153; €137; £122) So, in order to avoid a $35 delivery fee, we need to spend a little more on LEGO than we may normally wish on’ impulse sets’  We need to be committed to our purchase. Certainly more committed than others may be in other parts of the world, however this is still a great improvement on 8 years ago. (note: we have stepped shipping charges in Australia – up to $24.99 price – $25 shipping.  Up to $99.99 –

  

   

  $30 shipping. From $100 to $199.99- $35 shipping).  Compare this with the United States, where shipping is free for orders over $35, with shipping fees of $4.59-$6.95 for lesser priced orders.  This is, in part, the price we pay for ordering from a country from the opposite side of the world to the factory.

• Surprises: recently a buzz started around some of the
  AFOL Facebook groups to of something a little different: a thank you note for shopping with us, as well as an extra poly bag

  

  – some found spiderman, others a creator parrot.  Occasionally you may find a poster or a sticker sheet.

Let’s work through an example

When I shop from the LEGO Online Store, I always aim to qualify for free shipping.  Now  achieving this in Australia requires a greater financial commitment than other markets, so you may wish to put an order together with a friend if you want.  But it is worthwhile to get the shipping covered.

With this in mind, I have an ongoing list of “sets I want to get, but I don’t need today.” I have a number of sets on this list, including the Creator  Volkswagen Beetle (10252; $AU 149.99) because at the time it was yet to hit our stores, although it is now trickling into our local retail channels. I have also been looking keenly at the LEGO Dimensions Midway Arcade Level Pack (71235, $AU49.95) – yes, this is relatively old (well.. released in March), but unlike other LEGO Dimensions Level Packs, it didn’t last on our local shelves long enough to hit the 50% off clearance bins. But more about this another time.

Really, I wish to use shop.LEGO.com so that I can take advantage of the ‘bonus gift purchases’ and other promotional material. The London bus offered in October 2016 is one of those things I really, really like the look of: it triggers my ‘desire to buy through the Online LEGO Store.

There’s my justification: Two sets, not readily available on our local shelves. Of course, those two sets together don’t quite come to two hundred dollars.  The total came to one hundred and ninety nine dollars  and ninety four cents ($AU199.94).  Shipping was still not included in the price, and so, with the shipping fee included, the total came to $234.98.

Curse that $200 minimum spend to get to free shipping. Additional purchases  were required.  Pick-a-brick to the rescue.  Of course, I can never quite buy just one brick. I’m sure they will come in useful one day soon (I have a plan, really I do).  So I bought around $8.10 worth of pieces on Pick-a-Brick. So purchasing an extra eight dollars worth of LEGO dropped down the price, and ironically resulted in two separate shipments coming to my house, as Pick a Brick orders are rarely shipped with regular shop.LEGO.com orders.

So, does this represent value for money…?

Well lets not finish here. After placing my order at the eleventh hour (2 hours left of double points), it has arrived two weeks later. As I looked through the box I find a card: Thank you for being a customer: here is a free gift.  And as I looked through my box, I found a polybag. I’m a sucker for polybags.  I am a also sucker for brick built creatures. This was a polybag containing a parrot:  30472.  A small, cute set.  And then a sticker sheet. I am not normally a fan of sticker sheets, however this one is advertising the new flagship LEGO Store opening in Leicester Square on November 17th 2016.  And it includes alternative destination stickers and bus side advertisements to use with the London bus.  Now I have to make a choice as to where my bus is going. Lets discuss that next time.

So lets look at this purchase.

• Creator Volkswagen 10252: $149.98
• LEGO Dimensions Midway Arcade Level Pack 71235 $49.98
• Pick a brick: $8.10
•                         $208.06

Bonuses

• 40220 London Bus: estimated value (based on current eBay and Bricklink prices ) ~$20-40
• 30472 Parrot  (again, based on eBay and Bricklink prices) ~$5-10
•          $35 – 50

Value of Purchase: Approximately $240 –  260

Now, let’s remember that these ‘free gifts’ only have real value if you were going to buy them separately, or if you wish to sell them.  Certainly the London Bus is a set I wanted. I would happily have spent up to $AU25 on it. On eBay it is currently priced much higher. The parrot: I am not so sure.  However, I will happily build it, or else use it as a small gift at some event in the future. Certainly I would consider it to be worth $5 – 10 (Close to $AU0.10 cents per piece, for the 43 pieces involved). For the sake of today’s example,I am going to value the parrot and bus at $40.  This may or may not be right, but its what I feel they are worth to me!

The following calculations all work on the basis of calculating the ‘added value,’ as a percentage of the purchase price.

Value add = value of gift – (cost of purchase i.e. shipping)/(price paid i.e. price + shipping)

= 40/208*100 = 19.2% added value. (Had it been $200 even, it would have been 20%)

VIP points:

I made this purchase during a ‘Double VIP points’ Period. In Australia,  $AU
1.50 spent in a lego store earns 1 VIP point.  Other currencies have a 1:1 exchange rate (Pounds, Euros, US and Canadian dollars); Danish and Norwegian kroner exchange kr 10 = 1 VIP point.
Individual currency’s mileage may vary.

So, this purchase earned me  2 x 208/1.5 = 277 VIP points.  (typically it would earn 138 points)

LEGO VIP Points Fun Fact: 

LEGO VIP points can only be used as a rebate to your purchase in multiples of 100 points, regardless of the market you reside in.

In Australia, 100 points becomes a $7.50 rebate. The implication of the Fun Fact above is that I only have 200 VIP points to convert into rebate next time I go shopping.  It turns out, had I crossed the $225 purchase value, I would have earned 300 VIP points, and qualified for an extra $7.50 rebate on future shop at home purchases. (At normal VIP point exchange, Australians need to spend $150 to earn 100 VIP points, earns $7.50 rebate, equivalent to five percent (5%)). This rebate fraction is consistent across currencies and international markets. At double VIP points, this translates to 10%.

If I add my $15 VIP point rebate to my ‘value of purchase’ above, then I have functionally received 26% extra value above the purchase price.

If I spend extra, to reach my next trigger threshold for  double VIP point rebate ($AU225 results in 300 points =$22.50 rebate with next purchase), the value peaks again at that price point, however the percentage advantage is not significant.

Remember that the VIP rebate is only worthwhile if you make another purchase from a LEGO Store in the future….  But I am pretty sure I will.

Now, depending on the market you are in, the optimal amount to spend will vary.  It is affected by the shipping charges.  I have documented the Australian fees above. In the US shipping charges are$4.95 up to a purchase of $24.99; $6.95 if up to $34.99 and free of shipping charges (to contiguous US states) if the order is over $US35.  However, the free gift often does not become available until the order exceeds $US50. So Again, your mileage may vary.

So at what point does shop at home represent value for money?

Full price is always a tough choice when making a purchase of LEGO product, especially when it is so often available for a discount price close to home.

Plotting the effects of shipping fees and VIP points, the peak benefit (for Australian – and probably New Zealand customers) typically occurs with a $AU200 spend.  This point moves to $AU225 when double VIP points are offered. The magnitude of this value is dependent on the value of the ‘free gift with purchase’ on offer at any given time. In the case of the London bus, it equated to a value add of just over 20% of the purchase price.  Purchases above this will see the value add approach 5% (or 10% with double VIP points) as you increase your spend.

When considering other markets, these values vary depending on shipping charges, as well as free gifts/threshold to receive the gift. However, VIP points work towards a 5% rebate, unless earned during a double points promotion.

What will I do now?

I typically aim to use shop.LEGO.com for a limited selection of sets:

• Direct to consumer exclusives.
• those sets that appear online long before they reach our stores. Certainly in Australia we may see three or four months between online release, and release in major retailers.  We have particularly seen this for some of the Elves  and Ninjago sets this year.
• Some sets, such as the Park Animals 31044, and the Ant-Man Final Battle 76039 have never reached our retail outlets, and purchasing them through the online LEGO Store is our only way to obtain them.

And then there is the trigger: I tend to wait for a special bonus gift that appeals to me.  Most likely it will be a boxed Creator type  set: examples this year might include the

Fountain 40221, or the London Bus 40220.  But you may be more interested in Mr Freeze (30603) or a First Order Stormtrooper.  Certainly best value add is obtained when the purchase price is close to the free shipping threshold.  However, there is often no shortage of people looking to sell their bonus gift, and if you are looking for several of these bonuses over the course of the year, it is worth considering purchasing directly from resellers at a reasonable price.

To spend over $AU200 three or four times a year is perhaps a little more than you may wish to admit to yourself, or indeed your spouse.

With an appropriate free gift, you may well find that you get that 20% value add.  Pretty close to what you may have saved by shopping locally at the big box retailer. So long as you actually wanted that gift, or have the strength of character to sell it!

So there you have it.  Remember, this is just idle speculation, and should not be considered sound financial advice.  If you choose to buy from shop.LEGO.com, you do so knowing that a large hole may well appear in you bank account.  If you time it well, you might get something nice in addition to your order that makes it seem all that little bit more worth while!

 

Play well.