Is resale a better fit for lululemon than other apparel brands?

Discussion
Source: Lululemon
Apr 13, 2022

Lululemon athletica says a test of its “Like New” trade-in and resale program in California and Texas was a success, and now the yoga-inspired chain is rolling it out nationwide.

The retailer said the program will officially launch on Earth Day, April 22. Like New gives owners of lululemon’s clothing the opportunity to trade in garments for e-gift cards that can be used in any of the chain’s more than 390 stores. Like New items can be purchased online at likenew.lululemon.com. The retailer is working with the resale technology firm Trove to execute the program.

All profits from the program go to profits1 to support lululemon’s Impact Agenda, which is focused on the goal of making 100 percent of the chain’s products from sustainable materials and end-of-use solutions by 2030.

“We’re deeply committed to creating quality products built to last and that are better for people and the planet,” said Celeste Burgoyne, president, Americas and global guest Innovation. “Bringing lululemon Like New to all U.S. guests is a major step toward a circular eco-system and achieving our Impact Agenda goals to reduce our environmental footprint. We’ve seen incredible momentum from our pilot program and we look forward to welcoming new guests nationwide.”

Maureen Erickson, senior vice president of global guest innovation at Lululemon, told CNBC that Like New brings new customers to the chain.

“The guest who’s buying from Like New really … skews younger and is a value-based shopper,” said Ms. Erickson.

Lululemon’s program marks the second big resale news in recent weeks. Target launched its own page on the ThredUP platform to sell second-hand clothing from its private brands and exclusive designer collaborations at discounts up to 90 percent off their original price. The page’s selection also includes luxury clothing pieces not typically sold by the retailers.

A growing number of retailers have sought to get in on resale items as the market is booming at a time of high inflation and rising concerns about the environment. Levi’s, Macy’s, Madewell, Neiman Marcus, Nike, Nordstrom, Rent the Runway, Urban Outfitters and Walmart are some of the brands and retailers that have tested resale.

The market for second-hand goods, primarily clothing, is expected to more than double to $77 billion over the next five years, according to ThredUP.

DISCUSSION QUESTIONS: Do you expect that lululemon’s business will benefit more from its resale program than other retailers? What do you see as the key to making resale work with new product sales at retail?

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22 Comments on "Is resale a better fit for lululemon than other apparel brands?"


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Mark Ryski
BrainTrust

The resale market is a bandwagon every retailer should jump on. This move is completely consistent with Lululemon’s brand positioning but, even more, it’s aligned with businesses’ general movement to sustainability. If governments won’t act, it’s clear that leading businesses will. The key to resale co-existing with new product is careful selection of overlapping categories. Obviously cannibalization is a concern, but I suspect that resale buyers are a different profile than new buyers, and so there is a real opportunity to reach new consumers with resale.

Brian Delp
BrainTrust
1 month 13 days ago

Totally agree. I expect this to pull from other resell platforms like Poshmark and DePop. Why buy from those sites when you can get the branded merchandise direct from the brand who has establish credibility?

Liza Amlani
BrainTrust

This is a great initiative for Lululemon and there is not doubt that leaning into circularity and resale will translate to profits.

Lululemon has a very loyal customer and as the values of the customer evolve to include sustainability, the brand will benefit. Meeting the customer where and how they want to shop alongside doing good for the planet will only make Lululemon a force to be reckoned with in the market.

Mel Kleiman
BrainTrust

A direct appeal to the new generation of consumers who are highly motivated by environmental concerns, inflation, and sustainability. A win-win for everyone.

Neil Saunders
BrainTrust

Resale is ideal for Lululemon as its well-designed, high-quality products are built to last and so have a relatively long lifecycle. Moreover, when bought new, Lululemon items are expensive so there is a strong demand for slightly cheaper alternatives in the secondhand market. On top of all of this, boosting resale helps Lululemon to underline its sustainability credentials which is important to its mindful shoppers.

Bob Amster
BrainTrust

Lululemon is a sought-after brand. But it is pricey. Aspirational customers who could not otherwise afford the brand will be very happy to be able to sport (pardon the pun) Lululemon clothing.

Lisa Goller
BrainTrust

Yes, Lululemon’s resale program will outperform others. Its high-quality goods usually sport a high price tag; now resale makes the brand more accessible to value shoppers. This resale program is timely, as sustainability and affordability grow in importance.

Inflation has made frugality more fashionable. Dedicated sections for pre-loved items in-store and online extend retailers’ reach to price-sensitive shoppers. This model mixes an off-price store (random, limited selection) into the traditional store (full assortment, all sizes, higher margins).

Carol Spieckerman
BrainTrust

Lululemon is uniquely suited to tap into the circular economy. The brand enjoys a loyal fan base, its products are well made and durable, and they tend to be pricey. The only concern at this point is the flood of used goods that will be hitting the market as resale partnerships become the rule rather than the exception. Hopefully, retailers and brands have done the math as the potential to cut into full-price sales escalates.

Brian Delp
BrainTrust
1 month 13 days ago

This strategy is aligned with its core customers’ values on sustainability, while also reducing price barriers for consumers who want to try their higher-end athleisure without paying full-price. This base is already Renting the Runway — why not Buy the (lightly) Trodden Trail? I see this opening up a greater customer base and more retailers will be following. IKEA, Urban Outfitters, and most recently Target are already rolling.

David Spear
BrainTrust

This is gold and brilliant. Lululemon products are high quality and long-lasting, giving them extreme appeal to shoppers who love the brand but may not be able to pay full price for a new item. Resale items could offer an entire new cohort of shoppers to enter the brand franchise and drive an entirely new wave of opportunities for both Lululemon and shoppers.

Jeff Sward
BrainTrust

When Patagonia first started repairing their products, I did not remotely grasp what it would evolve into. Turns out when you start with great quality it’s a great platform to later repair, refresh and recycle. Hats off to Lululemon. This only reinforces what a great product they sell.

Nicola Kinsella
BrainTrust

Resale will always benefit an aspirational brand like Lululemon more than a discount retailer. And they have a clear goal – to attract the younger value shopper – which is good for building brand loyalty in a younger crowd who perhaps doesn’t yet have the disposable income to afford full retail prices of their products. But maintaining high product quality will be key to making this program successful.

Lee Peterson
BrainTrust

I think re-sale will become ubiquitous in all categories of retail pretty fast. Target, IKEA, Lululemon, and on and on. What’s interesting about re-sale is that it’s more profitable when done in stores vs. online so, let’s see how that plays out in terms of footfalls back to physical retail. Lululemon is going to do well with it simply because they do well period, it’s a relativity factor. Re-sale could be that missing third leg of the stool for retail: e-commerce, regular price stores and resale; that covers a lot of bases including younger customers.

Shep Hyken
BrainTrust

Lululemon is a recognized brand that is a destination for their customers. Customers go out of their way to shop at their stores, regardless of location. Extending their product line to include the “like new” merch is a great offer to bring the value-conscious consumer, but even more important is that this contributes to their cause. Research shows that younger generations place an importance on what a company stands for. This is a great way to bring in new and younger loyal customers that will be with Lululemon for years to come.

Bob Hilarides
Guest
1 month 12 days ago

Beyond all the great rationale posted above, this strategy fits Lululemon’s assortment strategy of frequently changing style/pattern/color/etc. Today a loyal Lululemon shopper may not be able to buy a second article that they particularly love, as the style has moved on (a topic for another discussion). Now they may have more luck finding that favorite 2020 style that’s disappeared from the stores. I can totally see my loyal Lululemon family going on a treasure hunt through the LikeNew site.

Kathleen Fischer
BrainTrust

This resale program is appealing to younger generations that are eco-conscious and sustainably focused. They won’t generally purchase new Lululemon products but would be more likely to look at like-new items available.

Lucille DeHart
BrainTrust

I am pretty sure I have to draw the line on used fitness clothing. Outerwear, evening wear, denim–all good, accessories, for sure, athletic clothing and leggings not part of the green new deal.

Joel Goldstein
BrainTrust

They are all concerned with the perspective. If it will be a net positive for revenue? I doubt it … I do think that every retailer will have to adopt some form of this for the future or they will be compelled to do so by the public and their voting dollars.

Rich Kizer
BrainTrust

Take a page out of Nordstrom’s resale playbook: Store is constantly changing with new entries, making it look fresher than it is. And then follow with constant client communication.

Patricia Vekich Waldron
Staff

This will appeal to Lulu’s core customers as it’s sustainable, recycled vintage or other harder to find pieces, and incents spending on new items. And since Lulu is an aspirational brand, it will give new customers a way to buy in.

Anil Patel
BrainTrust

If any company can successfully execute a resale model, it is Lululemon. Nobody else can do it if they can’t. The ICP of Lululemon’s customers is great for a resale program with a focus on sustainability. These customers have more disposable income, are more conscientious of their choices, and want to make a difference in the world. These customers also prefer to buy apparel more frequently than others, therefore their clothes are usually in better shape.

Furthermore, the fact that the proceeds from the resale program will benefit a worthy cause elevates this initiative. People will feel deceived and cheated if they believe a merchant is profiting financially from their good deeds. Associating the revenue with a worthy purpose, on the other hand, is the key to making resale work.

Shikha Jain
BrainTrust

Integrating a resale program not only shows that Lululemon is committed to sustainability, but also that they are building quality products that last a lifetime, or in this case multiple lifetimes. Confidence in both of these aspects is key and stands out to the consumer, especially Millennials and Gen Zers, who look for these values in the brands that they choose to support. Moreover, when it comes to apparel, consumers rely on durability as a proxy for sustainability primarily because it is something that feels tangible to them. Sustainable choices are quickly becoming the expectation rather than the exception in the demands of the consumer and retailers that do not follow suit are likely to continue to lose volume.

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"I see this opening up a greater customer base and more retailers will be following."

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