Lululemon athletica was founded in 1998 by Chairman Dennis "Chip" Wilson, in response to the increased participation of women, especially in athletics and yoga. The Vancouver company designs and markets lululemon athletica- and OQOQO-branded apparel It currently operates 40 stores in Canada, 36 in the U.S., two in Australia and four in Japan. This year it will open another 35, and by 2012 plans to have more than 250 stores worldwide.
Why did I decide to talk about Lululemon Athletica? Indeed, I noticed that this brand is recognized and so trendy for all young women Canadian students. However, why this passion for a sportswear brand? My article will be focused on the customer experience and RVP that the company to their customers and employees too. And I will add a European point of view to my assumptions in order to show you why this brand has to change some part of the strategy for Europe.
RVP Retail Value Proposition
Lululemon is often compared to Starbucks. Both are premium brands, both offer a unique retail experience and both avoid traditional marketing. The company have decided to use the grassroots marketing strategy. They don’t spend their entire budget on advertising by mass media and choose voluntarily radio, print ads, etc.
Concerning the price, all lululemon clothing are average high-premium price because they provided to their customers high quality, innovative and great style. So their customers are willing to pay for these products and services .Indeed , in order to sell yoga clothes and to ensure to customers a unique retail experience , the company also cover the cost for employees to take yoga, and even offer their own classes out of the Lululemon headquarters. Lululemon employees are known as educators and are encouraged to emphasize the unique aspects of their store as it relates to each of the customers they serve. They develop the physical and psychological status of their staff , in order to advise or educate the customers , especially on the technical aspects of the clothes ( performance ) . And the brand uses the feedback of local athletes to promote the quality of their products or modify a line in order to improve again the technical aspect of the clothes.
Moreover, the company let the retail mangers make their own decision about the window displays and interior design. It means that every lululemon store is personalized and can offer a really unique experience to their customer. And also each store also has a "community coordinator" who organizes fitness and other events designed to push brand awareness. In-store boards feature local yoga studios and various athletic events relevant to the particular area.
Selection: Fashion/Trendy brand
At first, another part of Lululemon massive success comes from the fact that they know that they're selling more than clothes . The brand was the first to provide a trendy aspect to the clothes .Only about 30% of Lululemon clothes are actually used for yoga. In 2007, in the yoga apparel market last year Canadian spent $79.1 million on yoga jackets, tops and pants. But only 63% wore their purchases for sport and exercise. It means that most of Canadian consider wearing sport wear as casual clothe. They switch jeans and a tee-shirt for a yoga pant and a top. Lululemon is perceived as the authentic yoga. When the brand was created, it was in order to respond to a demand from active women. They positioned as a high-end products, targeting 30years old active women who need comfortable and performing sport clothes. Now, we can realize that most of young women student purchase lululemon clothes because the company has created an attractive line of yoga stuff and accessories that every woman dreams to get and to wear are sign of recognition. The brand awareness and loyalty is very high, particularly in Canada.
Why do they need to change their positioning to expand to Europe?
To my mind, I can recognize that this brand provides high-tech and quality active clothes. They proposed a really fresh alternative to giant as Nike and Adidas, more focused on athletes or performance. Lululemon transmit values as healthy living style, yoga, calm.
The issue is concerning the fashion element. In Europe, people can believe the concept of trendy sport style. We are not used to wear as casual clothes yoga pants in the streets.
Furthermore, the actual target market is young active students and professionals. I don’t think most Europeans are willing to pay this price for yoga pants, especially students. The company should, then, focus more on active professionals. And maybe also expand their line of accessories and the men line because they are more sport active than women, and also in term of sports not only for running and yoga but more for team sports or tennis.
The company feels that its position at the high end of the athletic apparel market will continue to resonate with repeat buyers and new markets. In particular, in term of selection, Lululemon plans to increase its share of the male market from its current 11%, add accessories such as mats and underwear that now account for only about 10% of sales. And they also plan to begin selling its products online in the second half of 2009
In addition , maintaining Lulu lemon’s values and culture will be one of the biggest challenges because of the retail opening strategy led by the company, as additional stores in Japan and Australia and move into Asia and Europe. The objective to Lululemon's plan is to bring its brand of yoga wear to the world.
THE TAO OF Lululemon
Case: Lululemon Athletica: Primed for Growth, Richard Ivey Business School, course Manaf-ging High Growth Company