Photo: Lululemon
Lululemon to pilot ‘Like New’ clothing test
Lululemon Athletica is the latest retailer to dip its toes into the secondhand, AKA recommerce or resale, clothing market.
The yoga-inspired chain announced that it is launching a pilot program at participating stores in California and Texas to determine the viability of this new line of business that places sustainability at the heart of its marketing to consumers. The test, dubbed “Like New,” will give owners of lululemon’s clothing the opportunity to trade in previously purchased merchandise to be resold, recycled or otherwise repurposed by the retailer. Lululemon has pledged that one hundred percent of all profits generated through Like New will go into investments in other sustainability initiatives it pursues.
The trade-in phase of the program will kick off next month with lululemon beginning to sell traded-in items online in June. The retailer has said that it will only resell “like new” items. The chain will clean all the merchandise it collects, offering for purchase only those items that meet its quality standards and recycling the rest. The chain has said that it will analyze customer response and feedback before it seeks to scale the pilot up or to incorporate it into its standard business model.
Lululemon is working with partners to make the pilot successful, including Trove, which will provide resale technology and operations support. Trove works with other consumer-direct brands and retailers, such as Levi Strauss, Patagonia and REI, on their recommerce programs. Items not chosen for resale will be handled by Debrand, a reverse logistics and recycling company based in Canada.
The lululemon test program will put the retailer in the same space as a growing number of businesses that are taking similar approaches. Nike announced last week the launch of Nike Refurbished, a program that enables sneaker owners to return their shoes within 60 days of purchase for resale. The items selected are cleaned and sold to customers at a discount to buying the same shoes brand new. Nike is initially offering Refurbished shoes for sale in 15 stores before it further expands later this year and in the future.
Levi Strauss opened its LevisSecond online store last year. The effort supports the company’s sustainability and profit initiatives as it reduces consumption and environmental waste and creates a consumer-direct revenue stream for the brand.
- Lululemon Delivers On Its Impact Agenda Commitments With Two New Sustainability Initiatives Launching In May – Lululemon Athletica Inc.
- We work with the most innovative luxury and premium brands – Trove
- Retail & Apparel – Debrand
- Nike decides to ‘just do it’ in the sneaker resale market – RetailWire
- Will Levi’s Secondhand store give the brand a sustainable advantage? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Do you expect lululemon’s “Like New” pilot program to prove successful for the retailer? What do you see as the short and longer term implications for apparel retailers and brands actively pursuing the secondhand market opportunity?
Poll
BrainTrust
Dave Bruno
Director, Retail Market Insights, Aptos
Bindu Gupta
Loyalty & Marketing Strategist, Comarch
Like Nike’s recent announcement regarding used sneakers, I think Lululemon’s program will also do well. Lululemon is a premium brand and as such commands a high price point. Offering “Like New” will allow more cost conscious brand aspirants to enjoy the brand and have a positive impact on the environment, which is also consistent with Lululemon’s values. If retailers can figure out the logistics of managing used clothing, then I think this will be an even bigger trend – but figuring out these logistics will be a challenge.
Despite the pandemic, the resale market continues to grow at pace. More consumers than ever are now interested in used apparel, and purchasing rates are particularly high among Gen Z. As such, Lululemon is sensible to try this new service and will likely see some traction. It also helps the company push its sustainability credentials. All that said, the core of Lululemon’s business will still be new product and that’s where the main focus needs to remain.
There has been a growing consumer acceptance and demand for slightly used (aka previously loved) clothing and Lululemon’s loyal fan base will support the Like New program. lululemon’s approach to supporting sustainability by investing all of the profits of the Like New program into other sustainability initiatives will also resonate with its customers. The Like New program will also make the high-quality Lululemon apparel available to more consumers that can’t afford the full-priced items.
Secondhand markets can be very profitable for the right product mix and market segment. Designer handbags, apparel, jewelry, and electronics make a lot of sense. However I don’t personally see a large market for secondhand fitness apparel outside of higher-end sneakers. There are plenty of lower cost options for those looking for less pricey fitness apparel and the target Lululemon demographic will be unlikely to opt for “like new” products. I do, however, applaud the approach of pushing this market with a nod towards sustainability reinvestment.
There is a reason secondhand stores are successful. There are plenty of great finds as their customers find like new apparel. So why shouldn’t retailers and brands get into an area of business that offers their returned merchandise at a lower price? If the retailer is willing to package the merchandise properly, this may open up an opportunity for a new revenue stream.
For secondhand stores, secondhand is their business model. It is not for the regular retailer.
I suppose people will be drawn to Lululemon products at a lower price – but supposing they are used how they are supposed to be (i.e. for exercise!), the last thing I would want to buy used are workout clothes!
#firstworldproblem
Do styles change with women’s fitness wear? I imagine so. Has fitness wear become streetwear? I think so. Does fashion have an influence that makes secondhand more problematic in this category?
If any of you keep up with “Business of Fashion” it’s clear that “circular fashion” is becoming a very hot topic. So, do I think second hand is going to outshine fast fashion in a post-pandemic world? Yes I do.
Will Lululemon be successful? I think so, yes.
This idea of the sale of refurbished or secondhand merchandise actually has two advantages for major retail brands – it shows that the brand is responsible in its sustainability efforts and it creates an option for the consumer to buy a high-end brand at a reasonable price. Also, think of the additional engagement or customer touchpoint this generates for the retail brand as well. The downside risks are cannibalization of their full priced sales, but the secondhand product availability is going to be limited to pose a serious risk. Best Buy, as an example, has sold refurbished and open box merchandise in the past very successfully while growing their overall business. This program is right along the lines of what Nike, Levi’s, Adidas and few other big brands are piloting in limited stores. Lululemon has also tied in its recycle program with refurbish which is also great from a sustainability standpoint.
I sincerely applaud the program and expect there will be some people keen to acquire Lululemon products, but I do wonder about the broad appeal of used workout clothing. Only time will tell, I suppose.
I am not a woman, but my worn workout clothes are not ready for secondhand. They are ready for the trash.
Me too Gene.
Used workout clothing is definitely not for everyone. The fact is that this fabric breaks down more quickly because of its purpose. With WFH over the last 12 months, activewear/athleisure was the category of choice so your Lululemons are getting a lot more wear now vs. pre-pandemic.
I can’t imagine buying secondhand workout wear but I am sure the program will do well — initially.
Their products have been sold on eBay and ThredUP for some time, so this will allow Lululemon to take back a piece of the end stage of the brand experience and offer a way for them to demonstrate their values message to customers. However they will likely have some issues with reselling certain product lines – I’m not sure how many people are comfortable buying used leggings – is it too much like reselling used underwear?. Overall, taking corporate responsibility for your product’s footprint and lifecycle is the right thing to do for any brand.
The apparel industry seems to be in the limelight this month, with Nike announcing refurbished apparel, Stitchfix seeing a change in leadership, ThredUP going public, and H&M piloting lending their suits free of cost to interviewees to ace their interview. Lululemon better not be left out. I think the re-commerce model will drive a positive impact to the triple bottom line of the industry – with people getting cheaper access to good clothes, the planet gaining from lower manufacturing pollution (this needs to be offset by additional transportation we will see) and the profits rising due to higher margins in the re-commerce business.
I have two big questions for a name brand taking on the “like-new” opportunity.
I strongly agree Gene. Conceptually, “Like New” makes sense on many levels — but actually executing this well requires entirely different/new business processes.
This pilot will prove to be successful as customers become more savvy in truly understanding the impacts of the fashion industry to the environment, especially with the fabrications that are used by Lululemon and other active brands. Sustainability is going to be a larger deciding factor in how consumers consume and why customers buy.
But what happens when happens when the hype slows down and customers would prefer to buy new LuluLemons vs. used? Will the price points be lower? What will give the customers a reason to buy resale Lulus because the fabric in activewear pills, it gets worn down. Unlike denim, activewear gets worse with wear.
From a customer perspective, for activewear/athleisure, I would definitely opt for the new stuff.
As a long-time lover of antique markets and re-sale shops, I love the idea. If the sustainability or eco-friendly angle gives license to consumers to more readily frequent Lululemon, Nike or non-branded stores to spend money all the better.
The circular economy and, in this case, circular fashion, is one of the trends that are beginning to go mainstream. Lululemon is wise to test two different markets and establish an ecosystem to gain operational insights and execution chops. Innovative move by the category’s trailblazing leader that enhances its brand while making its community even more loyal.
More and more brands are jumping on the eco-friendly, sustainability bandwagon. There must be some solid market research behind it. This could become a popular trend especially with Gen Z which is very much pro-sustainability.
I agree 100% Bundu! This move is brilliant as it gives an opening for Lululemon to a slice of the market that it probably didn’t have a strong connection with. Not that Gen Z-ers don’t have the money to spend on new, but rather that they will support brands that make a true effort to support sustainability. I don’t expect that there will be huge revenues in this piece of their market, however, I do believe that they are on a track to build some strong customer loyalty.
I myself — and frankly all of my friends — shop designer resale ALL the time. As far as used workout wear, all resold items are screened for quality before they are accepted and put on the floor. Unless it’s Goodwill, no icky or worn out items are ever for sale. Also, workout clothes are funny. Most women will relate that we find the items we love and wear them a lot … the ones that don’t tend to get 1-2 uses and then sit in a drawer — and these are the items we look to re-sell. I say good for Lulu!
I’m a big fan, donor and customer for #recommerce, but hesitate at acquiring used workout clothes — even high-end items like Lululemon.