Photo: Lululemon
NRF 2021: Will Lululemon ever get tired of winning?
With one record quarter after another since the start of the novel coronavirus pandemic, it’s hard (impossible) to argue about Lululemon Athletica’s success. But as Celeste Burgoyne, president of the Americas and global guest innovation at the yoga-inspired retail chain, demonstrated yesterday during a session at the virtual NRF Big Show, success isn’t simply a matter of happenstance.
“COVID has shifted the world in some ways and really has allowed us to take advantage of all the investment we’ve made in our digital ecosystem and really leaning into our omnichannel strength,” said Ms. Burgoyne about three years’ worth of investment pre-pandemic.
Emphasizing the safety of associates and customers, Ms. Burgoyne said the performance of services such as online ordering with two-hour pickup in the chain’s stores played a major role helping the chain move its on-trend merchandise during the recently concluded holiday selling season.
She also pointed to Lululemon’s “virtual waitlist” that keeps customers from having to stand outside of stores and wait 30 minutes or more before entering. The feature enables shoppers to put their name into a queue and receive a text when it is their time to enter. It was a simple, yet powerful, demonstration of Lululemon respecting their time.
Ms. Burgoyne called Lululemon’s “digital educator” program, which was developed early on during the pandemic, “a really fun innovation” that the company “really leaned into” over the holidays. Lululemon, she said, was able to book “4,000 live video appointments” with customers on Black Friday alone.
The retailer also focused on doing what it could to be more accessible to customers in the last months of 2020, which included opening 106 pop-up stores. Many of these were located close to permanent stores to “ensure that people were able to have the ease they needed to get in and get out,” said Ms. Burgoyne.
Lululemon’s $500 million acquisition of Mirror last year is also a point of differentiation for the chain to build on. Ms. Burgoyne said Lululemon was all about “bringing fitness and mindfulness to homeowners across the world.” Eighteen of the chain’s stores are displaying the Mirror device in a pilot with promising results that could lead to further integration in 2021.
Discussion Questions
DISCUSSION QUESTIONS: Do you think Lululemon is positioned for success even if consumers use less of their in-home time to exercise in the coming months and years? What innovations or services offered by Lululemon do you see as being particularly effective both now and after the threat from the pandemic passes?
Poll
BrainTrust
Jeff Sward
Founding Partner, Merchandising Metrics
David Adelman
Founder, The Adelman Group
Some brands just seem to capture the zeitgeist and Lululemon is one of those “it” brands. Despite premium pricing and some controversy, the brand has been on a tear for more than a decade. According to latest reports from the company, they are looking at footwear and say that their product pipeline is full. Lululemon has also entered the workout equipment business in its acqusition of Mirror. The way Lululemon is going, I wouldn’t be surprised to see another strong decade ahead.
During the pandemic, Lululemon’s creative “virtual waitlist” and “digital educator” services were great ways to engage with customers and increase customer loyalty. Lululemon has cultivated a loyal fan base that will continue to grow with quality merchandise, fun styles and great customer service. Personally, I think people have found that there are ways to stay in shape at home and many may not return to health clubs as in-home exercise is much more convenient and economical.
Lululemon has demonstrated its unwavering commitment to the customer. They dominate in a number of ways:
Promise, product and process. Lululemon has continually demonstrated superior execution every step of the way with ingenuity, creativity and consistency.
The idea that retailers that have had great performance during the pandemic and continue that in a straight line is fantasy. The pandemic may have taken them to a different level, but they will level off.
With regard to Lululemon, they are probably in a better position than most of the winners to maintain continued success. People will continue to exercise, if not in the home then in the gym or in the outdoors. The pandemic has generated a new fashion and new acceptance of what Lululemon has to offer. That will continue after the pandemic.
I would caution Lululemon and all retailers, if you are winner now — don’t take your wins too seriously. The downfall of most great retailers is that they found a winning formula and never changed it. People change. Trends change. Retailers must change. When things are going in the wrong direction, find a new winning formula. Don’t double down on your previous wins.
Like yesterday’s discussion around RH, this is one brand that knows who their customer is, how to stay focused on him/her, and how to innovate.
They know their customers, they learn from their customers, they offer a quality assortment and their customers remain loyal to them. They were definitely in a good position pre-pandemic and have weathered the pandemic so far by adapting to the changing needs of their customer base.
Lululemon is in a special retail space. Its customer is committed to fitness, looking the part, and paying the price. Working out from home was a great boon to the brand but I propose that most of its online clientele will remain committed to fitness and loyal to Lululemon. And then Lululemon will have all those aspirational new customers…
Lululemon is a phenom. It’s a wildly crowded space and the landscape is littered with lower-priced “dupes” and STILL they are exuberant. Lululemon is the absolute definition of LOYALTY. Loyalty is a brand’s golden ticket – when clients are wildly (blindly) loyal then micro-transgressions will be overlooked, purchasing will continue and more. Their connection to their customer is almost at the DNA level (think back to early NW Nordstrom days). Nothing will come between Lululemon and their loyalists – it has little to do with having a Mirror, not having a Mirror, having see-through pants, whatever. Lululemon currently has a psychological connection to their clients that is almost undefinable. This is a wave they will continue to enjoy for a while. (It also doesn’t hurt that they are a Wall Street darling).
Yes, Lululemon is positioned to thrive, as it has evolved into an agile, trusted wellness leader. A pre-pandemic omnichannel mindset gave Lululemon the resilience to mobilize fast in 2020.
To serve the booming health community, live video appointments offer safe, personalized service. Most retailers cancelled their 2020 pop-up plans; Lululemon relied on pop-ups to manage strong holiday demand for its comfortable, quality athleisurewear. Mirror devices extend brand reach and the service captures in-depth consumer data to apply to future brand innovations.
Lululemon knows its customers and validates their inner lifestyle wants and needs better than others. Pandemic or not, Lululemon is cutting the right path to the hearts and digital wallets of their expanding customer base.
UCD (user-centered design) is a term bandied about by any organization that wants to convince itself that it really addresses the needs of users/customers in its design thinking and business processes. UCD is an extremely effective methodology that differs from what most organizations still do: looking at company assets and making business decisions to fit them. It seems Lululemon has stepped away from the chatter and carefully and effectively implemented real examples of the practice and their success shows. It’s a great lesson for individual retailers and retail as an industry where we still see, for example, department stores trying stay relevant even though their model doesn’t fit well into today’s consumer’s needs.
A full explanation of how CX is the real driver of profitability is found here in the CX/Profitability Continuum.
Yes! Not only did they take advantage of technology to meet their customers in unique ways, but with more people staying/working from home— I expect a lot more women are ditching pantsuits for athleisure wear.
Living in Vancouver, Canada, I have witnessed the growth and success of Lululemon from its inception. Their brand is so strong today that nothing short of a major PR disaster could bring them back to earth.
Lululemon will have continued success regardless of the eventual move of customers back to the gym, no matter what exercise trends continue or develop in the future.
Lululemon started as a yogawear company but quickly became “the” iconic athleisure apparel company that everyone attempts to mimic. Rounding out their total experience by expanding into yoga and now exercise classes with the introduction of Mirror, there is no stopping them.
No matter where you are in the world today, out on the streets, in shops, restaurants, and eventually back at the gym, you will see that curvy so highly recognizable Lululemon logo worn by millions of women and men.
Lululemon has done a superb job of evolving and innovating athleisure into the lifestyle “uniform” of choice. Lululemon product is outstanding, great fabrics, modern fit and shapes, innovative design — the list is long. And to top it off, Lululemon is a true modern-day retailer offering all customers of all shapes and tastes the opportunity to look good before, during, and after COVID-19.
It’s clear that Lululemon was well-positioned well before the COVID-19 pandemic for sustainable growth. Especially with the rise of conscious consumerism, health and wellness, Lululemon has risen to the occasion and quickly became the dominant lifestyle brand. In addition, the brand has done an outstanding job of pivoting to a digital-first strategy, meeting its brand promise and leveraging both physical and digital channels to fulfill products.
Athleisure is here to stay, and with the remote work operating model not leaving anytime soon, we should expect Lululemon to continue its rapid growth and expansion into other lifestyle categories. Similar to Apple’s brand positioning, the Lululemon brand messaging extends well beyond the transaction, as it focuses on the customer experience.
To sustain any rapid growth cycle will take a full commitment to continuously improve, adapt, and innovate as a brand. Considering Lululemon’s track record, they should be able to meet that challenge.
Lululemon has been exceptional at catering to the right crowd and their products are not just for the in-house yoga master. More importantly, data suggests that of all fashion businesses, COVID-19 has impacted the Athleisure market least. All the strong players in this space will continue to succeed and the introduction of COVID-19 has only served to focus more customer attention on quality, pushing Lululemon up on the luxury curve. No single product, feature or capability is responsible, but rather Lululemon’s unyielding focus on the customer.
Who gets tired of winning? Lululemon’s pre-pandemic investments in their digital transformation set them up for pandemic success. The recent success will not stop as Lululemon will continue to serve the needs of their customers by making smart digital investments, being at the forefront of innovation, and understanding their customer’s shopping behaviors. Though many customers will return to in-person activities when they are able to, the most successful retailers will continue being successful by addressing their customer needs, regardless of the surrounding environment.