Retail Customer Experience: Three Examples of Radical Differentiation at Lululemon
Through a special arrangement, presented here for discussion is a summary of a current article from Retail Customer Experience, a daily news portal devoted to helping retailers differentiate the shopping experience.
Earlier this year, a Wall Street Journal article discussed the "secret sauce"
to Lululemon's strategy, which has propelled it to become a $1 billion retailer in less than 15 years. It's clear Lululemon practices what designer Marty Neumeier preaches in his book, Zag: The #1 Strategy of High-Performance Brands.
Mr. Neumeier explains, "Differentiation, the art of standing out from the competition, is not front-page news. What is front-page news, in a world of extreme clutter, is that you need more than differentiation. You need radical differentiation... When everybody zigs, zag."
Here are three ways Lululemon zags:
1. It doesn't do formal market research or customer relationship management.
"Instead," the WSJ piece reports, "[CEO Christine Day] spends hours each week in Lulu stores observing how customers shop, listening to their complaints, and then using the feedback to tweak product and stores."
It also trains its employees to be customer advocates. Sales people eavesdrop on customers as they fold clothes near the fitting rooms, so they can overhear complaints and pass them along. And customers themselves are invited to give input to the company by writing suggestions on a chalkboard that are sent back to headquarters.
Of course, research and CRM are valuable tools for most companies but sometimes there is no better way to understand your customers than to simply listen.
2. It uses scarcity instead of discounts to generate demand.
The WSJ reports, "The goal is to sell gear at full price and to condition customers to buy when they see an item rather than wait. 'Our guest knows that there's a limited supply, and it creates these fanatical shoppers,' says Ms. Day."
The WSJ reports that the chain sells 95 percent of its gear at full price and it never puts its core items on sale. Scarcity is a much more sustainable and brand-building approach to stimulating purchase conversion.
3. It doesn't offer top-notch customer service.
The piece quotes Ms. Day as saying, "We aren't Nordstrom. We aren't your personal shopper." Lululemon's return policy is "very strict": no products accepted after 14 days, and all must be unwashed and unworn, with original tags.
This is not to say that the company isn't friendly or doesn't care about its customers. A quick spin through its blog, tweets, and Facebook page and visits to its stores prove otherwise. But it's clear Lululemon is not trying to be something it isn't.