Ambassadors on a Mission for Lululemon
By Tom Ryan
While Lululemon Athletica eschews big-time celebrity endorsees,
it’s a big believer in the local celebrity.
Part of the yoga-themed retailer’s
success is traced to its efforts to turn fitness instructors within each community
into brand advocates. Those deemed “ambassadors” — who
often lead local yoga, spinning, Pilates and running classes — are given up
to $1,000 of free apparel a year in exchange for their input into the design
of new clothing. The ambassadors are also featured in communication material
such as posters inside each store, as well as in bios and blogs on the Lululemon
website. Since they’ll likely be wearing Lululemon when they teach, they are
also expected to serve as community models for the brand.
“I wear Lululemon, and I’d estimate that 90 percent of my clientele has
switched to Lululemon,” Michelle Cushing, owner of the Chicago fitness studio,
Dare to be Fit, told The Wall Street Journal.
Ambassadors also conduct free yoga, Pilate or conditioning sessions held
inside Lululemon stores, or lead many group runs orchestrated at each store.
While unpaid, leading such classes helps personal trainers find regular clients.
Lululemon’s
grassroots’ efforts — including a community board within
each store promoting local yoga classes and run groups, as well as the free
classes and ambassador efforts — are seen as integral in supporting the
retailer’s premium pricing despite minimal advertising. The average ticket
price is about $100.
Elena Gallo, a Chicago attorney who takes Pilates and boot-camp
classes with Ms. Cushing, told the Journal she only began buying Lululemon
merchandise after seeing her instructor wearing it. “I was always adamant
that I wouldn’t spend a fortune on workout clothes. … Now Lululemon is all
I wear.”
Lululemon last week reported second-quarter earnings more than
doubled on a 31 percent jump in comparable-store sales. Sales per square foot
are now over $1,530. It expects to open 20 to 25 new stores in 2011, up from
14 planned for this year. It ended the quarter with 130 in North American and
Australia.
The Journal listed a number of challenges to Lululemon’s
future success. Besides establishing an infrastructure to support aggressive
expansion, the market for higher-price fitness apparel may be more limited
than projected, lower-priced imitators may arrive, and a backlash against Lululemon’s
success may occur within the yoga community. Bigger sporting goods players
like Nike or Adidas that spend millions marketing and locking up endorsements
from celebrity athletes are also pursuing the emerging women’s fitness opportunity.
Discussion Questions: How much of a competitive advantage does Lululemon
gain from initiatives such as its ambassador program, free classes, etc.? What
are the main challenges going forward as Lululemon ramps up expansion efforts?
- Lululemon Grows Fast on a Slim Budget – The Wall Street Journal
- Fitness community buy-in works for Lululemon – The Tampa Tribune
- Behind the Lululemon phenomenon – The Toronto Star
- Lululemon Athletica CEO Discusses Q2 2010 – Seeking Alpha
- Lululemon Athletica inc. Announces Second Quarter Fiscal 2010 Results – Lululemon
Athletica
While it is a niche market to be sure, they know who they are, who their customers are and how to exceed expectations. On FNO last week, while everyone else was trying to party, they were having a free yoga class. No discounts, Groupons or generic items clutter the message. This is a brand operating on all cylinders and should be a textbook example of excellence in retail.
Lululemon is doing something Nike and other sports brands have done for years. The major difference is they don’t have to pay millions of dollars (at least not yet) for athlete endorsements. Lululemon’s approach is excellent and something other manufacturers may want to investigate.
Harnessing the influence of individuals that others follow is a powerful marketing tool. This could be a blogger, a mom that writes about being a mom and the products she finds useful, High School coaches, etc. A brand needs to find the people others follow and attract them to wanting to be ambassadors for their brand. To do that brands need to make them feel special: Free gear, early releases of new items, letting them have feedback on what your working on are all ways of building loyalty with these influential people.
This approach is not limited to clothing or sneakers. There are applications for food items, sports drinks, even beer and wine.
Their ambassador program seems like a neat idea and a great way to build a community in and around each of their stores. But, I wonder if yoga clothes is a sustainable niche or will flame out at some point when yoga is not as hot as it is now. And, I wonder about their pricing – not being a fashion or yoga expert (insert joke here) – I’m judging by their sale of water bottles for $25 that can be purchased at convenience stores for a couple of bucks.
As a dedicated yoga practitioner and husband of a Lululemon Ambassador I can say, first and foremost, the clothes look good, are highly functional and carry a certain level of cachet due to their high price point. I am not sure how effective the free classes are, but the Ambassador program actually does generate a lot of buzz. It’s a fun, low cost promotion for Lululemon that definitely generates business.
Given how small Lululemon is, it is a really smart way to connect directly with the users of their products in a way that is relevant, non-commercial, and fun.
People who are into yoga tend to be non-conventional. I’m not sure if many of them would care if a famous celebrity wore their clothes. The celebrity would need to have credibility as a spokesperson for yoga first in order to be taken seriously as a spokesperson for the brand. A smart, cost-effective way to accomplish that is to reach out to the people who are known in these small yoga circles and have them be the ambassadors.
I am a fan of their excellent and focused brand development plan. I am also a customer and big fan of their products. My only wish is for a little more sophistication in their sizing. We aren’t all long-legged with long lean arms. I’m willing to pay their prices but it’s a bit of a rub to then have to pay more to shorten sleeves!
Next time I shop there I plan to do some chatting with other shoppers and will post some shopper stories on my blog! I’d like to understand the shopper mindset and how it translates to loyalty. I wonder if the loyalty is more to the retailer or to the fitness instructor?
Lululemon is a continuing success story because of their community. For a small Canadian company, their reach and loyalty is truly exceptional.
The clothes are well made, fit nicely and last. It’s not just about cool yoga/workout wear – shoppers like the store, its programs and the way the clothing holds up despite repeated washing and wearing. Serious fitness ladies like to look good, but clothes must also be very functional and, sadly, some of the brands fall short in the durability and fit department. By listening and reaching out to their community, loyalty and cooperative new product development will drive growth.
This seems the next logical (and clever) step beyond the celebrity endorsements that helped Nike grow so quickly. The difference is that the end user gets to actually see the role model in the gear. This obviously costs less (at least for now) than the multi-$million endorsement contracts and there’s a much reduced worry about the role model having some embarrassing flame-out.
The only issue is the growing cost related to Lulu’s explosive growth. The minute that sales dip, as they inevitably do, someone is going to start looking for cost reductions. Giving away product for free will be a big target. This will definitely not sit well with those instructors currently getting free gear. This can work against Lululemon in the same proportion it is now working for them.
Still, this is a great method.