Photo: Lululemon
Will ‘Practice’ make for perfectly loyal customers at Lululemon?
Lululemon is testing its first-ever membership program. While including elements similar to other loyalty programs, the yoga-themed apparel chain sees it as an empowerment initiative.
For $128 a year Canadian (about $96 USD), members receive:
- Either a pant or pair of shorts designed exclusively for the program;
- Access to monthly local yoga or fitness classes;
- Early access to Lululemon’s weekend Sweatlife Festivals and other events;
- Personal development programs;
- Free expedited shipping on e-commerce orders.
“Lululemon has always had a strong connection with our guests, thanks to the great work of our educators, community teams and ambassadors,” said Calvin McDonald, CEO, last week on the company’s third-quarter conference call. “However, it’s clear that we can take these relationships to the next level with the loyalty program.”
With its annual fee, the program, called “Lululemon Practice,” resembles Amazon Prime and its similar offering of free shipping and other perks. The inclusion of merchandise parrots subscription box services such as Fabletics in the activewear space, although those generally work on a monthly basis. Some department store rewards programs offer special access, although Lululemon’s program is not linked to purchases.
In messaging for the test taking place in Edmonton, however, the retailer said Lululemon Practice is all about “empowering you to live your best life.” Signage at stores include taglines such as “Your best life starts here” and “Last chance on a lasting experience” with limited space available. Marketing copy heralds a “year of workouts, personal development, and shopping hookups.”
Lululemon says it is getting a “very strong” initial response to the test and plans to add more markets in 2019. The chain already sees opportunities to increase the annual fee and add more features based on early engagement.
“Guests are seeing value in this curation of services and content beyond just our product and in buying into the program and driving value through the loyalty,” said Mr. McDonald.
- Lululemon Athletica Inc. Announces Third Quarter Fiscal 2018 Results – Lululemon
- Lululemon Athletica Inc (LULU) Q3 2018 Earnings Conference Call Transcript – Motley Fool
- Lululemon is testing an Amazon Prime-style membership as athleisure competition heats up – Business Insider
- Lululemon expands test loyalty program with $128 annual fee – CNBC
- #Lululemonpractice – Lululemon/Facebook
- #Lululemonpractice – Lululemon/Instagram
- Last chance on a lasting experience – Lululemon/Instagram
- Are you living your best life? – Lululemon/Instagram
Discussion Questions
DISCUSSION QUESTIONS: Has Lululemon designed a winning loyalty membership program? What do you see as the program’s strengths and weaknesses?
Poll
BrainTrust
Michael La Kier
Vice President, Brand Development - IGA, Inc.
Shawn Harris
Board Advisor, Light Line Delivery
The new Lululemon loyalty program looks like a winner. Lululemon has some very passionate fans and the loyalty program has great perks for a very low annual price.
With the inclusion one free pair of pants or shorts, access to yoga and fitness classes and free shipping in the $96 USD annual fee, it seems too good to be true.
What Lululemon is doing is exactly what a membership program should do, treat customers with special privileges and keep them hooked to the company.
At $96 USD/year, this program is clearly targeted to the die-hard Lululemon enthusiast. For this group, the program is a good idea as they will clearly see the value with the clothing and free shipping along with opportunities to engage more with the brand. Where I see a challenge is that this will not be the impetus for the twice/three time a year shopper to upgrade and spend $130 just for what is offered. To grow this service, there have to be offers that really motivate the more casual shopper to want to do this and I don’t see it here.
This sounds like a good move for Lululemon. Their perks align very closely with their brand identity, and should appeal to their core customers. The perks like access to yoga or fitness classes also tie in uses for Lululemon products in real life, which is a great way to drive brand awareness and sales. Better than just basic free shipping or X% off.
At $128 it’s an offer filled with value that Lululemon’s customers are already all about. It’s more than just product (personal development courses, events, and yoga sessions) which on its own costs way more than $128 a year.
Given that Lululemon is a lifestyle brand, this type of program will be attractive to many of its core customers. The inclusion of a product like pants makes the scheme good value for money while being able to access fitness or yoga classes extends Lululemon’s existing community approach. Some of the newer stores have studios and spaces for classes, so Lululemon can use these as part of this program. I expect Lululemon to use this as a platform for future service growth, including more classes and festivals.
The Lululemon program is off to a good start by offering a strong value proposition, rooted in the ethos of the brand to inspire and empower. All too often brands try to emulate others rather than creating a loyalty program that works for their customers and their positioning. The proof will be in the pudding to see what type of benefits actually are delivered and the value people place on them.
This feels like the RH membership. Benefits for the select few who can actually afford the premium price points on a regular basis. This does little to incentivize the occasional shopper to shop and spend more often.
Agreed Anne, I think that is exactly (and smartly) what it is designed to do — create an elevated channel for its existing brand advocates. And while I do not fall within that customer base personally, my experience with those who are would suggest that they have a higher percentage of customers that fall into that category than most apparel brands.
The athletic wear sphere also has the advantage of pre-existing communities (gyms, spin classes, etc.) where like-minded people gather on a recurring basis and tend to reinforce each others’ trends, so there is grassroots groundwork for this program to gain traction without the brand itself pushing it.
This will be a good one to monitor for sure!
First, we should eliminate all male responses from this discussion starting with this one.
Maybe it’s just me, but my first reaction was to wonder why one needs a membership program to get yoga pants? I’ve got sweatpants older than dirt. Does one need new yoga pants every year? Beyond the new pants, when you look closely at the other “perks” there’s not much there.
“Your best life starts here!” Really? This is like a gym membership — the value to Lululemon is in no one using it while having a pretense of belonging. If one is a devotee to yoga, they are devoted to a specific class and instructor and they are not likely to move. And what exactly is a “monthly” yoga class? For some things membership works, and for some it doesn’t. My vote in this case goes to the latter.
The program is certainly focused at the most important customers. I believe that this is the type of program that will engender those customers very tightly to Lulu.
But the reach will be very limited. I don’t see this as supporting the 80/20 rule.
How refreshing that a leading retail brand acts like a leader and does something other than points and rewards! While there is a movement toward membership as a loyalty strategy, it’s not for all brands and only works around brand strength and a clear value proposition. Lululemon has done so. The question that remains is how they leverage the data and addressability to deliver not just a customer experience differentiated by membership, but one in which the member’s customer experience becomes more relevant and valuable to drive incremental business.
I wonder if the inclusion of the monthly fitness programs will make Practice reimbursable by most insurance providers. There could be a very ingenious angle here.
Love this plan! What omnichannel retailers who have retail locations need to do is find ways to stand out from convenience, selection and price and give compelling reasons to walk in the door and stay brand loyal. Exclusivity, experiences, perks and product are great incentives!
I like the sounds of it, but I don’t see this being a loyalty program as much as it is paid admission to their VIP club. For a store-based retailer, this approach would fail to capture the shopping masses’ contact details most retailers want about their loyalty program membership. For an online retailer who already has those contact details, it’s a great way of letting customers segment themselves into the “prime” customer cohort. It sounds like the program is self-funding and therefore should be a no-lose proposition for identifying the really elite class of Lululemon customers.