Source: Lululemon promotional video
Lululemon joins the footwear race with new running shoes
Lululemon, retail’s poster child for the athleisure trend, last week entered a new category, footwear, that offers both a massive opportunity and heightened risks.
In doing so, Lululemon is directly taking on athletic footwear’s giant Nike as well as other stalwarts such as Skechers, Adidas, Brooks and New Balance.
Moreover, many brands that have started with an apparel focus, such as The North Face, Columbia Sportswear and Under Armour, have faced long struggles developing complementary footwear offerings. Neither Foot Locker nor Dick’s Sporting Goods offer private label footwear, despite major pushes around in-house apparel brands.
Yet, Lululemon has shown a willingness to enter new categories with the launch of cosmetics and personal care category in 2019 and last year’s acquisition of Mirror, the at-home digital workout platform, to enter the connected fitness space.
Luluemon first announced its plans for the footwear space after testing the sale of trainers and slip-ons from Los Angeles-based performance sneaker brand Athletic Propulsion Labs (APL).
“We tested and we learned a lot on footwear and what we learned is: The guest resonates with us selling footwear,” said CEO Calvin McDonald in 2019. “We believe we’ve identified an opportunity that will be unique to us, and unique within the marketplace.”
Last week, Lululemon released four different women’s shoes, including ones for running, cross-training and post-workout. Prices range from $138 and $148. A men’s collection is in the works for 2023.
The yoga-themed chain believes it will benefit from a women’s-first approach.
Mr. McDonald said in a statement. “We are entering the footwear category the same way we built our apparel business — with products designed to solve unmet needs, made for women first.”
“This is a big deal,” NPD’s senior industry advisor and footwear analyst Matt Powell told CNN. “This is the first time a major brand is making a sneaker specifically for women. Basically what the brands sell in this space are smaller versions of men’s shoes. This is a dirty little secret of the industry. Lululemon is building a shoe from the inside out uniquely designed for women’s feet.”
- Lululemon Reveals First-Ever Footwear Collection — Made for Women First – Lululemon
- Lululemon jumps into the footwear business – CNN
- Lululemon launches into footwear as it seeks to take on industry giants like Nike, Adidas – CNBC
- Lululemon Reveals Its First-Ever Women’s-Focused Footwear Collection — and Performance Is Key – Footwear News
- Lululemon is banking on a new product: Shoes – The Boston Globe
Discussion Questions
DISCUSSION QUESTIONS: Do you see more potential benefits than risks in Lululemon’s move into the footwear category? What advantages may Lululemon have and what will be key to finding success?
Poll
Loading …BrainTrust
This appears to be a smart product line extension for Lululemon and I see far more potential benefits than risks. Lululemon has done a brilliant job of building their brand equity and remaining focused on quality product. With the countless fans they have, I have no doubt that many will be interested in whatever Lululemon is offering.
Lululemon jumped into an untapped market with athleisure and yoga wear initially — now they are jumping into a highly saturated and crowded market. I think this will be a hard path for them to win at. Of course, how you define “win” is highly subjective. They have a loyal following with a fervent love for the brand. So it’s safe to say that even if they don’t bite off a huge portion of the athletic shoe market, this launch will increase revenue.
Another avenue for brand loyalists to proclaim their allegiance. The “women’s first” narrative will provide a lot of traction and shareability via consumer promotion as well.
To enter the footwear market and compete with established giants that have already invested millions and decades in developing product is a risky undertaking. If Lululemon can develop a very good line of footwear at semi-affordable prices, it can compete. But that Lululemon can do this is not guaranteed. That they will give it a good try, is.
Lululemon has witnessed a fantastic run of growth during the pandemic. It now has more customers than ever before and those customers are spending increasing amounts of money on its products. However there are limits as to how many pairs of yoga pants people need. As such, a pivot into the multi billion dollar sneaker space is sensible. The challenge will be carving out a niche for itself in a very competitive market where big brands dominate. Lululemon has an advantage in its loyal customer base, but that doesn’t negate the need for innovation and differentiation.
Lulu has the Midas touch and whatever they do turns into gold. Footwear will be no exception. Perhaps they should pick an underserved category, like yoga, to build a following as Under Armour did with baseball and golf in their infancy. Their clientele is obsessively loyal as proven by their resurrection after the see-through fiasco several years ago. I am surprised Lululemon has not done this earlier.
They have also made a smart move in designing a sneaker specifically for women, which has not been done before. Not to mention great marketing in announcing this during women’s history month! This will work.
This is an incredible move for Lululemon and tapping into the footwear category has been a long time coming.
They have invested in the footwear category through innovation, a dedicated space in Portland (Nike’s backyard), and nabbed a few of the swoosh’s designers.
The focus on women is brilliant – and the Lululemon customer is going to be on board 100 percent. Catering to their loyal fans and closing the feedback loop by giving customers what they want is undoubtedly going to be a huge a success.
I am not a LuluLemon customer, but after reading this article I might be in the future. Sneakers designed completely for a woman’s foot are not commonplace, and there IS a difference in how they fit!
Lululemon has a strong brand presence and customer loyalty which will help them initially succeed in the footwear race but, ultimately it will depend on the quality and value of the shoes, especially when compared to the competition.
I see this as a logical evolution for the brand, but ultimately not one that will move the dial all that much. With a brand story as powerful as Lululemon’s, they should avail themselves of all the reasonable opportunities to address a greater share of spend in adjacent categories. But two issues are paramount. First, this category is incredibly crowded with not only powerful, established brands (Nike, et al) but increasingly strong disruptors (like On, et al). Getting to meaningful, profitable scale is no small task. Second, the go-to-market strategy is made more complicated given that footwear is notoriously an inventory hog, owing to all the sizes, colors, etc. Being asset light in their brick-and-mortar locations can mitigate this, but in a category where fit is essential it could end up back firing.
It appears consumer behavior and preferences for the sports footwear category is different from apparel. Footwear is unique in how it impacts comfort and performance even for casual runners. If Lululemon intends to position its footwear beyond the style aspect, it needs to compete with serious, established players.
While footwear looks like an adjacent market and natural extension, the risk is in diluting its focus. Unless Lululemon is able to come up with a true differentiator with design, R&D and positioning, the footwear market might turn out to be a tough one to crack.
It’s a niche category if they focus specifically on the yoga/athleisure element and they could excel. Lululemon fans are die hard followers, so they’ve already done the heavy lifting to get an audience in this competitive market and it’s a natural extension for the brand. The brand is also somewhat of a luxury status symbol, so many will likely jump on board simply for this, however keeping the DNA of comfort throughout will be the key to longevity.
Lululemon’s move into the footwear category is bold, yet risky. Footwear production is a more costly endeavor and requires specialized factories and equipment. Additionally, the back-of-house storing requirements based on the number of SKUs to provide a proper assortment are substantial. I am also baffled why Lullulemon did not venture into the shoe business with more of a focus on their core expertise — yoga footwear. Focusing on women’s shoes is great but the running shoe category is filed with incumbents.
Personally I’m really excited by this line extension. But to be successful, they need to differentiate their offering. Take product information for example. There are lots of elements that impact shoe fit: toe box room, high arches, narrow heel, etc. It would be amazing to see a shoe manufacturer that lets people understand these elements from the Product Details Page, and even search for shoes based on key features. Another opportunity would be allowing people to filter reviews by, people who loved this shoe also loved these other shoes. Help customers find their “shoe tribe.”
Lululemon has cultivated a terrific brand presence for themselves in fitness. I don’t however think they will have a easy time finding successes in footwear. This is a crowded market with lots of really sharp competition. By the way, I’m quite certain Nike, Adidas, Sketchers and host of other brands would take some issue with the statement that Lululemon is the first company to make an athletic shoe specifically for women. As I said, this is a crowded field and it will be difficult for Lululemon to differentiate themselves.
Footwear isn’t an easy category, BUT — name one other brand of significance that has launched a line of footwear just for women! Combine that bit of long overdue brilliance with their deep customer base and loyalty and you have a winner.
Nothing is guaranteed in life or retail, but this should be a win for Lululemon. (then again, who thought Target would fail so badly in Canada?)
It is an expected line extension for them and I am sure that their followers have been asking and waiting for this for a while. Smart move.
Assuming Lululemon can sprinkle their magic pixie dust on shoes as they have with their line of athleisure-wear, they’ll carve a highly successful and profitable footwear category for themselves. I’ve yet to come across anyone who says anything remotely negative about Lululemon products. So, based on this completely unscientific poll, the women’s shoe line up will rock!
Can they sell footwear? No doubt. Can they make desirable footwear? There’s the hard part.
If this were any other brand, I’d say an expansion probably won’t be profitable and would just be an opportunity to say they do more. However when Lululemon does something, it does it right, and it does it with a deep knowledge of the customer. I think this will go really well for the brand.
As long as Lululemon doesn’t try to be a performance shoe, they will do just fine. If they truly want to market their “running shoe” as a performance sneaker, they will lose massively. The big guys not only spend gazillions on marketing, they spend millions on the research of their performance shoes.
On the other side, the fashion sneaker business is booming. Go to the shoe department in Saks and Bloomingdales and you will find 80 percent of the displayed product is sneakers. And pricing in the hundreds of dollars is the norm.
Sounds like a winning move to me. Smart, logical, focused. Four styles won’t take much of a bite out of the market from the existing powerhouses, but it’s enough to say, “We’ve been listening and studying our customers needs, and we think we are now offering some unique solutions for women.” Nothing wrong with smart, logical, patient growth.
Tough business to extend into for any company and for Lululemon, the target base to start is their loyal customers. I think there is only so much leisurewear pants and tops the company can sell, especially when people return to work, so shoes is a natural extension. How much success they can have outside of their core customers remains to be seen.
While many of the popular athletic retailers have struggled to watch their own footwear brands, none of them have the fanatic following and strong brand loyalty of Lululemon. Assuming that the products are high-quality and consistent with the brand look and feel, I would anticipate that the company will have success with this offering as well. Think SoulCycle more than Dick’s in terms of customer engagement and passion.
While the categories are closely aligned, they are still separate categories. While the Lulu guest may be open to shoes at their Lululemon store, it will be interesting to see if they will “put their money where their mouth is.” Many will be interested in the shoes, but will they be able to compete with Nike, Adidas, etc.?
Expanding into the footwear category could be a fantastic opportunity if Lululemon has gathered the resources to understand the science of creating amazing footwear. If they have not, the strategy may be counterproductive, and they may lose their existing strong customer base.
Offering more products/services in order to increase profits tarnishes the brand’s image. Brand extensions are effective when brands continue to serve customers with the same aim that led to their success in the first place.