Lululemon is ready to tackle holiday crowd control

Photo: Lululemon
Sep 14, 2020
Tom Ryan

Lululemon plans to use a mix of pop-ups, queuing technology and online assistance to manage Christmas holiday crowds.

The yoga-themed retailer’s reopened stores are performing at 75 percent of last year’s volume due to capacity restrictions, with lines forming outside some spots.

“Our stores are small and designed to be an efficient use of space with high levels of traffic, which results in high productivity,” said Calvin McDonald, CEO, last week on the retailer’s second-quarter conference call. ”While these are appealing attributes, the current capacity constraints understandably limit the number of guests who can be in the store at one time.”

The stores are among the most productive across retail, with average sales per square foot of $1,657 in 2019.

The holiday traffic-control plans include:

  • Pop-ups: Lululemon will open approximately 70 “seasonal” pop-up locations this holiday, up from 51 last year. Locations include “key centers and markets where we have existing stores to help us mitigate the current capacity constraints.”
  • Virtual waitlists: The retailer will continue to use this method to notify shoppers when it’s their turn to enter the store in order to ease wait times. “This functionality has been particularly well-received,” said Mr. McDonald. “In the month of August alone, we had nearly 400,000 individual guests utilizing our virtual waitlist across nearly 280 locations where we implemented the technology.”
  • Curbside pickup: The chain will continue to complement its BOPIS service with curbside pickup to enable Lululemon’s team to “just check guests out and service them outside of the store.”
  • Digital educators: The number of “digital educators” will be expanded to complement in-store assistance. Personnel will answer customers’ questions via live chat, email, phone or text through the “Guest Education Center”. Shoppers can also set up a video chat appointment as part of the retailer’s “Live Shopping” feature.

Logistically, Lululemon is preparing for continued exponential online growth this holiday season. Online sales in the second quarter jumped 157 percent.

“Our challenge is: How do we get more into the store and transact at a quicker rate,” said Mr. McDonald.

DISCUSSION QUESTIONS: What steps being employed by Lululemon to prepare for holiday crowds will likely prove most beneficial? Is there anything you would add?

Please practice The RetailWire Golden Rule when submitting your comments.
"If the experience is anything like what I had this past week, I would say the host at the entrance of the store is a great way to expedite the shopping visits."
"I think this is all about the sum of the parts rather than calling out a most beneficial element."
"Deploying seasonal pop-up stores in key markets gives shoppers an exclusive holiday experience and increases in-store foot traffic."

Join the Discussion!

19 Comments on "Lululemon is ready to tackle holiday crowd control"

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Mark Ryski

All of these tactics are useful to minimizing the space restriction challenges and maximizing sales. But while they all have merit, it seems to me that Lululemon’s approach to virtual waitlists appears to be particularly effective based on the usage of 400,000 in the month of August. COVID-19 protocols are going to be an ongoing challenge for retailers and, like Lululemon, retailers are going to need to keep adjusting and refining their approaches as time goes on.

Stephen Rector

Lululemon has done a great job of keeping their brick and mortar locations safe and not crowded. The popup stores are a great idea to better manage higher traffic patterns. They have the product that people want and their performance will continue to outshine other specialty retailers.

Suresh Chaganti

Each of the four strategies helps in a unique way. But managing lines outside the stores will have a big impact. Case in point: we were at an outlet mall yesterday and returned without shopping after looking at long lines at nearly every store, including Old Navy.

Giving people waiting in lines an ability to do some pre-shopping and minimize time in-store would be great. Outdoor kiosks with Augmented Reality may not happen for this season, but something in that direction could be innovative.

Neil Saunders

Most retailers will need to deal with capacity constraints over the holiday period. However Lululemon’s popularity means it is more challenged than most. These steps are sensible and will allow the company to service elevated demand while keeping people safe and comfortable. The additional pop-ups are interesting: I suspect that Lululemon has secured good deals with landlords to transform vacant space into a temporary location for a very low rent. This is a model that other retailers could use. After all, it’s better for the landlord to have space occupied than loads of unattractive gaps in the mall during the holiday season.

John Hyman
9 days 6 hours ago

There certainly is enough vacant retail space to accomplish this, creating a win-win for the mall/center owners, Lululemon, and consumers.

Dave Bruno

All these programs are great ideas. Pop-ups in key locations to manage overflow crowds will certainly help. Virtual waitlists are a great adaptation of Best Buy’s appointments, and curbside is now a mission-critical offering. Others, like Bye Bye Baby, have proven the efficacy of digital educators, and if they include store associates as educators, I think that has a chance to be really effective as well. One item I do not see on the list that I would think they should begin thinking about now, however, is returns. Even before the post-holiday rush, I think it would behoove LuLulemon – and everyone – to evaluate and upgrade the returns process. I have seen very few adaptations for safety to the return process anywhere.

Adrian Weidmann

Despite the rush to online sales, Lululemon shows us the continued value and importance of the physical store. It’s hard to imagine many brands where their shoppers/customers would utilize a “virtual waitlist” to enter the store. It’s almost a guarantee that those 400,000 folks actually bought something. What is it about the in-store Lululemon experience that brings their customers back?

Shep Hyken

Any of the steps that make the customer feel safe is a key to getting customers to do business with them. The virtual waitlist (versus standing in a long line) is a great idea. Pop-up stores to help reduce in-store traffic is another great idea. And of course what all retailers are doing to amp up their delivery and curbside pickup will prove beneficial this holiday season. There are plenty of ideas out there for retailers. The goal is safety and health first followed by an excellent shopping experience.

Jeff Sward

I think this is all about the sum of the parts rather than calling out a most beneficial element. At their current level of productivity, and with the prospect of lower foot traffic during peak shopping weeks, it sounds like Lululemon has taken all the right steps. The pop-ups can compensate for traffic missed in regular locations. Virtual queuing can create the best possible experience at all stores. They really are planning and executing everything possible to meet and exceed last year’s business. How many retailers have a realistic shot at making that happen?

Laura Davis-Taylor

I totally agree with Jeff and the notion that “it’s the sum of the parts.” I’d hate to see holiday’s “safe workflow” become a copycat situation, as so often retailers do. Every retailer has some similar health safety challenges, but they are also unique brands with unique situations and expectations. There is no standard workflow or technology that’s perfect for everyone. Some protocols will be measurable and some will be more perception, and both count.

Net-net, every retailer needs a plan, and it needs to be based on two-way dialogues with shoppers, legal’s risk tolerance and what they should do based on knowing their business versus what the CDC outlines for them with a wide sweeping policy.

David Weinand

The only other suggestion I would have is to add additional associates so that they can get in-store shoppers serviced and out the door quicker – enabling more throughput.

Shelley E. Kohan

If the experience is anything like what I had this past week, I would say the host at the entrance of the store is a great way to expedite the shopping visits. When I arrived, the host at the door asked if I was looking for anything particular. I told her actually I was and she told me exactly where to find it which cut down my shopping trip. Retail shoppers really want to get in and out of the stores quickly so whatever practices retailers can implement to expedite the shopping trips are winners. As a side note, Lululemon was sold out of the short I wanted but the host told me they would alter a crop pant to the length of the short for free, charge me the price of the short (which was cheaper) and send it to my house. OK, I’m hooked now – I’m a loyal customer and will go back.

Cathy Hotka

The Apple store near me has commandeered two parking spaces on the street in front of the store and has put up tents to shelter those waiting in line. This year every retailer is going to need to address customer safety, and publicize their efforts. Shoppers: don’t wait until the last minute!

Bindu Gupta

Lululemon is taking all the right steps. The virtual waitlist option is likely be to extremely popular during the holiday season. In addition to this, they can probably incorporate AR virtual try-on technology in stores as well as online to help their customers pick the right options for them.

Gene Detroyer

It is all about capacity and throughput. How do I increase the capacity? How do I shorten the wait times? How do I make the customer more comfortable?

There is only one answer to that — increase the square footage. I am actually surprised that they are talking about just 70 popups. With the availability of retail space this coming holiday season, I would look for every Lululemon to have a nearby pop-up. In the same mall or within walking distance on the street. Then utilize virtual wait lists to direct customers to the shortest wait.

Ananda Chakravarty

All steps for Lululemon are adding value and right now, they stand out as a very unique retailer on the apparel side. I expect there will be even more experiences with mobile POS and engagement at the curbside with mechanisms to allow customers to view merchandise as they wait – for example kiosks, custom digital signage or virtual shopping in the parking lot. With added demand, retailers like Lululemon will also look for ways to move customers quickly through their stores – with in and out doorways, and department-based headcount where departments are cordoned off and have their own lines (though might not be practical for Lululemon). It will be interesting to see the innovation that retailers bring to the table.

Ricardo Belmar

All of these options have merit and will help, but I see the use of pop-ups having the greatest potential impact to manage overflow traffic. I am actually surprised the number is not significantly greater than 70. These pop-ups could be leveraged to store items for BOPIS so those customers don’t add to the capacity limits of the main store. Associating a pop-up to each store has the net effect of increasing square footage and that’ the real issue here for lululemon — not enough physical space to handle the traffic flow. Perhaps adding nearby kiosks to help customers browse would be another option.

I would ask if lululemon has considered live streaming or other video-based shopping methods to supplement their online growth and provide yet another option for customers to see the product without visiting the store.

Karen S. Herman

Good to see Lululemon is doubling down on both online and offline retail channels this holiday season. Deploying seasonal pop-up stores in key markets gives shoppers an exclusive holiday experience and increases in-store foot traffic. Most promising for me is the Digital Educators offering. As virtual personal shopping, it helps the customer with a 15 minute slot to get the answer to a question or a 30 minute slot for a guided shopping experience and option to place an order. The only thing missing for me is the return policy. I’d like to see it clearly stated as part of the offering.

Carlos Arambula

Informing consumers ahead of time is very smart. It narrows the “safe” retail shopping options consumers will have this coming holiday season.

Aside from curbside pickup which has been comfortably and effectively used by leading retailers for the last six months, the digital educators are particularly appealing. A well trained sales force can bridge online and brick & mortar sales for consumers who prefer the retail store interaction.

"If the experience is anything like what I had this past week, I would say the host at the entrance of the store is a great way to expedite the shopping visits."
"I think this is all about the sum of the parts rather than calling out a most beneficial element."
"Deploying seasonal pop-up stores in key markets gives shoppers an exclusive holiday experience and increases in-store foot traffic."

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