Photo: Lululemon
Will a strategy built around changing people’s lives transform Lululemon’s business?
Calvin McDonald, Lululemon’s CEO since last August, views the yoga-themed retailer more as an experiential brand than a lifestyle one. But the experiences he plans to deliver will increasingly be as much spiritual as physical.
As part of the effort, the retailer is designing more larger stores that carve out spaces for experiential events, Lululemon said at its Analyst Day last month.
A 25,000-square-foot store set to open in Chicago in July will feature yoga studios, meditation space, healthy juice and food, and areas for community gatherings. By 2023, about 10 percent of Lululemon’s total fleet will be considered “experiential.”
Lululemon also plans to build on the more than 4,000 events it created and hosted in 2018. Some are large-scale, such as the SeaWheeze half-marathon in Vancouver, 10K runs in Edmonton and Toronto, Sweatlife weekend yoga/fitness retreats and 5Ks. Smaller activations include free meditation or yoga classes insides stores, run clubs and other local social events.
The chain plans to further leverage its more than 17,000 active and legacy ambassadors — typically local yoga and fitness instructors — around such events. “We know that consumers want to participate in communities with people who share their passion,” said Mr. McDonald.
The broader vision encourages the embrace of Lululemon’s Sweatlife philosophy of leading a healthy, mindful lifestyle that includes three elements:
- Sweat: Basically, reaching fitness goals;
- Grow: Personal development and “becoming one’s best self” through meditation, restoration and recovery;
- Connect: Creating bonds with others “to build something bigger than we can alone” for a wider community focus.
The Sweatlife vision provides Lululemon with opportunities to expand into personal care, travel, work and other adjacent categories and services that the CEO said are much larger than the sports apparel market.
Mr. McDonald said, “The greater opportunity to Sweatlife is that it is a $3 trillion global marketplace in which Lululemon has an authentic point of view, an authentic voice and an opportunity to continue to lead, continue to innovate into and represent the brand, and provide guests with solutions and experiences in which they’re looking to live their life.”
Discussion Questions
DISCUSSION QUESTIONS: What do you think of Lululemon’s Sweatlife? What hurdles do you see facing Lululemon as it seeks to position its brand around this philosophy of living?
Poll
BrainTrust
Bethany Allee
Senior Vice President Marketing, PDI
Evan Snively
Director of Planning & Loyalty, Moosylvania
I would bet (because my wife is a yoga and meditation instructor) that most participants don’t have all three goals – most have one of these, some might have two, very few share all three. And Lululemon’s future will end up being price-based – as yoga spreads in popularity, lower cost clothing options will become more popular.
I’m not sure Lululemon has ever been playing purely a price-based game. They’re not worried about commodities. How else could a premium yoga brand grow selling $150 yoga pants during a recession? This seems like an extension of Chip Wilson’s culture and purpose driven mission. Their future relies on people buying into the vision and lifestyle, just like it always has.
Sweatlife considerably expands Lululemon’s range of opportunities to attract and engage customers with their brand. Lululemon has built almost a cult following which affords them the opportunity to bring new product and ideas – even ideas that significantly transcend yoga pants and apparel products. I think the caution for Lululemon leadership is to proceed in a way that does not compromise the brand trust and loyalty that they have masterfully built over the years. As long as they stay true to their brand and do not get too commercial in their approach, I believe this will be very successful.
What matters most is whether Lululemon’s customers want such services. From our analysis and consumer research, the answer is a clear yes. There are a lot of core shoppers who want to engage with Lululemon more and are willing to pay for classes and events. Admittedly, there are already companies like Wanderlust which hold festivals, but Lululemon should have no problem differentiating from them using the strength of its brand.
Bottom line: yoga, wellness and mindfulness are big business now and Lululemon is right to grab a slice of it.
Nothing wrong with going more hardcore with the brand essence, but my gut sense is that many shoppers love Lululemon for the way the clothes make them look and feel while not sweating too!
Lululemon is smart to let its flagship fly and go all-in with experiential retail. There really is no middle ground here as more companies enter this space from a product or service perspective (without combining the two in a compelling way). Lululemon needs to make a big bet and take a stand just as Restoration Hardware did with its spare-no-expense flagships and swing to services and solutions. RH is seeing a payoff and Lululemon should as well. Different businesses but the same principles apply.
The strongest value proposition a brand can deliver is a philosophical promise. Lululemon’s Sweatlife asks consumers to align to three core principals for living and health. This is a brilliant way to drive additional loyalty with their already loyal audience.
As for the hurdles: relevance. The brand must practice what it preaches with every ounce of its being. With the idea of breathing and extending, they must fully extend themselves right now. If they do it authentically and wholeheartedly, they’ve got potential for long-term relevance and success.
Lifestyle, fitness and overall wellness focused retailers will win the hearts and minds of the increasingly health-conscious consumer. Calvin McDonald and the Lululemon organization are right on target to capitalize on their positive brand positioning, by expanding their offerings.
While McDonald and the Lululemon team may think the vision for the brand is purely an experiential one, however, it’s the promise or perception of health and wellness that has propelled the brand to the top of the heap. Athleisure has thrived the last couple of years with Lululemon leading the charge.
The gamification of health and wellness is going to be winning proposition for Lululemon, both in-store or via digital channels. By combining the brand ambassadors and cross promotions, along with the experiential showrooms, Lululemon is poised to dominate the health and fitness retail segment.
I applaud Lululemon for sticking to their core mission of building community and advocacy, even as they’ve grown into a large brand. As a company scales, often executives cut programs that created the advocacy from their core customers. The Sweatlife initiative is building on their original work of engaging the local yoga community in each market to share their passion through a variety of events. Yoga is part of a larger “wellness” scope and Lululemon is well positioned to be a leader in that movement.
As a big Lululemon fan myself, I think their move to become more of a lifestyle brand will be a great fit. One of their great strengths is the localization of the brand to highlight different types of fitness around each store. The brand is highly authentic, encouraging employees to get out into the fitness and yoga world and do meditation in-store. This move seems like an extension that, if it continues to be authentic, will expand the brand to new venues, new customers, and new platforms.
I would think most women prefer how they look in the outfits vs. the sweat factor. Although the exercise piece is important. The three factors are important. But being able to connect with more people with similar interests is probably slightly more important. I would caution them to not go overboard in the store expansion program until they are confident this is the future.
This is a great strategy and more consumer brands should follow in the footsteps of connecting with their customers on a deeper level. Lululemon is certainly heading down the path of a true lifestyle brand. The only obstacle is to make sure their real estate strategy is correct to support the traffic needed to make these other businesses thrive.
Whether Lululemon feels it’s an experiential or a lifestyle brand doesn’t really matter. What matters are the steps being taken to expand its footprint as a premium-priced category authority. Fitness apparel and yoga wear have been broadly commoditized (by Macy’s, Kohl’s, Dick’s and others) so Lululemon must position itself as the Apple of the category.
There are brand followers, fans, loyalists, devotees and more. Lululemon has brand worshipers. Loyal and devoted beyond anything normal or ordinary. As Lululemon expands into broader health and wellness businesses, these folks are going to not just follow but participate enthusiastically. A community of health and wellness is a lot more engaging than a trip to the gym or health food store.
The Sweatlife strategy is a brilliant approach to build a formidable emotional moat around the Lululemon brand that taps deeply within with a potential to transform each guest. The power of three pivots the brand narrative from the more limited fashion and apparel story to a more expansive total life experience that encompasses self-actualization through fitness and mindfulness.
Potential hurdles: staying authentic to the brand and message, as well as having the patience and time to execute over the long term.
So forgive me, but this sounds like a bit of a hedge here. Saying that 10 percent of your stores will be full-on experiential environments by 2023 means that 90 percent of your stores will still be — more or less — conventional. Frankly this seems to be more an exercise in brand community building than it does a spiritual quest. Many brands have found the value of building community around events going way back to when Harley-Davidson created HOG (Harley Owners Group) so that bankers and lawyers and other well-heeled customers could “experience” outlaw biker life — without being around real life bikers of course.
As far as hurdles go, to me authenticity is the biggest hurdle for all these efforts. If you really care about the spiritual health of the planet where are the free Lululemon clothes for the poor, efforts to start teaching yoga in central city elementary schools, etc.? Lots of shoppers like experiences, but nobody wants to be a (conscious) poster child for exploitative hipster capitalism.
As philosophy for the company, Sweatlife is great. It is important to have a central theme when planning for the future and deciding which experiential activities to embrace. Choosing appropriate activities will be tricky and may differ considerably across locations. The danger is that not all consumers may be committed to all three parts of the philosophy. If not, activities may not attract them to the store, especially the community part.
If community means that a group of people come in, relax, and stay within their own community, that will work for that small group but may not encourage purchases. If community means that people come to the store to become part of a larger community, that may be perceived as an in-group – out-group situation and keep people from coming to the store.
Emphasizing experience is a good way to go, especially if the Sweatlife philosophy fits their target. Implementation will determine how successful the approach will be.
Lululemon knows they are in the pole position and instead of marketing with a value prop, they are doing so with a values alignment. By doing so they are providing their existing customers the channel and incentive to outwardly identify with Lululemon as a brand, making them less susceptible to competition down the road.
Of all companies, Lululemon has the most natural and genuine connection to the experience of yoga. So this isn’t bad thinking.
BUT … I’m concerned. This approach is, without saying it, primarily doubling down on the idea of maximizing revenue from existing customers — not bringing new customers in. For a brand like Lululemon, that’s concerning.
It looks like a Pareto approach (appeal to the intense users of your brand) rather than a growth approach (bring new people to the brand).
Yet the strongest brands are always bringing new people into their brand. And by doing that, sales per customer generally grow as well.
So despite the hype I doubt that Lululemon will find its success through this approach. That said there is one possible out. Their 4,000 events are more advertising than “experience.” So despite faulty logic, this shouldn’t be devastating to Lululemon.
For those who say that many buyers are more concerned with how they look and feel in Lululemon gear than the experiential benefits, I’d argue that an even richer, experiential-based brand essence will make those non-hardcore shoppers feel even better about how they look and feel in those same clothes. And as long as they keep listening so well to their customers’ needs and innovating with their product, I expect they’ll be able to command the premium they do now.
My fear with the experiential avenue is their ability to innovate or at least nimbly adapt to the ever-changing fitness trends, combined with many fitness enthusiasts’ fundamental need for variety in their workouts. I hope they can operate them like independent fitness venues/incubators to create that connection to the local customer. Though I guess they don’t need 100 percent share of workout requirements for this to be successful.
If Lululemon uses its planned experience center stores to attract and teach more new yoga enthusiasts, then its strategy has potential. Let’s face it – yoga is still an exotic fitness practice for most Americans. The familiarity and strength of the brand and its visibility in brick-and-mortar could lower some barriers for the uninitiated.
I have seen the Ambassador program being highly visible among the active community in South Florida. I assume it is also effective to drive sales and create customer affinity as people who like the Ambassador and attend events in-store are more likely to identify with the brand and want to wear the brand.
The approach is applause-worthy, though logistics may limit where the store stops and the fitness studio starts. I would also caution Lululemon to not correlate visits from consumers who share their values with price elasticity. They already compete at a higher price point and should leverage this strategy for return visit and loyalty rather than to support increasing prices.