Great ideas often come from the most unlikely beginnings. In the case of Founder Chip Wilson, the idea for Lululemon came to him while doing yoga.
Wilson had recently sold his first company, Westbeach, a retail store that sold apparel for surfers, skaters, and snowboarders, and took a yoga class.
In the middle of it, he was hit with the realization that there was a need for suitable fabrics for multiple physical activities. And so became Lululemon.
Fast forward to today, the company sits pretty as one of the top athletic apparel brands, with mass international appeal and a natural magnetism that seems to just make you want to purchase their products.
So how did Lululemon do it? Let’s look into its growth and how it slowly built itself into the billion-dollar athleisure juggernaut, it is becoming a major contributor to the new and comfy trend of athleisure wear.
History of Lululemon Athletica Inc.
Lululemon Athletica Inc. started as a small design studio by day and a yoga studio by night in 1998 before becoming a standalone store in November of 2000 in British Columbia. Founder Chip Wilson was (and currently still is) passionate about yoga and mindfulness at the time, and with his history in the athletic apparel business took Lululemon to new heights.
More than two decades later, Lululemon is headed by CEO Calvin McDonald, and is now worth 49.82 billion USD, and earned annual revenue of 3.98 billion USD in 2019.
Lululemon began with selling yoga clothes for women before slowly expanding their catalog into including a variety of athletic wear for running, cycling, training, and other apparel.
Lululemon also proudly states that their designers are athletes and fitness-inclined guests who use their products. Likely the involvement of the people most likely to use their apparel in the product development helps cater to their success. The company can continue its steady growth and make their products keep the wearer in mind, using fabrics best fit for the job while keeping the wearer comfortable.
From their first women’s yoga pants, the company has recently expanded their efforts to include men’s athletic wear to expand their customer base0, as well as eventually adding self-care products for the skin of the physically active.
But if you ask founder Chip Wilson, he might tell you that what they sell is not their product, but a healthy and fitness-filled lifestyle. In an interview with ThoughtEconomics, Chip said that:
“Our number one instinct is survival, followed by reproduction. People started to realise that if they took care of themselves, they would live longer, have better sex, and have healthier children. The mission of my family, which ended up being Lululemon, was for people to be able to live healthier, longer, and more fun lives. Our designers used that mission as their basis- the result being high-quality clothing, which had to last a long time”
Considering Wilson’s quote above, Lululemon’s main customers are people who want to live healthier, fuller lives with better health, and more fit bodies. And that includes a lot of people.
This wasn’t always the case. Before its growth, the company started out selling yoga apparel patronized mostly by women. But even then, Lululemon recognizes the customer base it wanted to appeal to and attributes its success to the then-budding prominence of the strong, independent woman.
“Our customers were highly intelligent, college-educated, athletic, health-driven women.”
From then on, the brand has grown its catalog from yoga pants to a wider range of products, in turn expanding its customer base from the young, professional, yoga enthusiast to anyone who wants to be healthy, fit, and attractive.
“With Lululemon, we put authenticity into everything we did, it was about being great. Our vision statement was about elevating the world from a place of mediocrity to greatness.”
Lululemon Athletica Inc. fashions itself as a lifestyle brand, focusing on self-improvement most of all. Not unlike its initial market, Lululemon can be personified as the cool aunt who knows all about health, fitness, yoga, and mindfulness, seemingly juggling a career, family, and the constant growth of the self.
It also retains a cruelty-free certification courtesy of Leaping Bunny, ensuring that all its products are made without harming animals.
Lululemon Athletica Inc. is only one player in the growing markets of athletic wear, fitness products, and athleisure fashion. The brand faces competition in large sport-related retail brands like Nike, Adidas, and Under Armour, along with smaller yet competitive brands of Lorna Jane, Lolë, YOGASMOGA, Oiselle, Alo, Onzie, Vimmia, MPG, Cory Vines, and Zobha, among others.
What Did Lululemon Do Differently That Resulted in Its Success?
The growth of the Lululemon brand into a giant in the athletic apparel industry is something worth looking at and studying for its intriguing trajectory, especially for up-and-coming brands.
Lululemon has stores from New York to Singapore and also caters to wholesale B2B customers like health clubs, fitness centers, and yoga studios.
But besides just admiring the brand’s successful business, understanding the strategies utilized by the company can help inspire and even ideas to implement.
So what is the secret to the success of the Lululemon brand?
1. Community-Based Marketing Strategy
The Lululemon growth strategy is a simple, yet revolutionary one. Since its inception, Chip Wilson wanted to create an environment of people he wanted to work with, who shared his views on self-improvement and his love for yoga.
“What was missing in my life is being able to go into work and actually love to be with everyone I’m with.”
The first Lululemon store was more than a store. Lululemon wanted to build a community hub where like-minded individuals can interact and share in the wonders of yoga. This wasn’t the end of their goals; however, but it planted the seeds that would grow into an even bigger movement. They revised their values into a new statement.
“Be the experimental brand that ignites a community of people living the sweat life through sweat, grow and connect”
The Lululemon brand sought to expand to not just providing stores that doubled as yoga studios but create a culture and community of customers that share the same values of self-improvement, health, and fitness. This strategy creates a sense of belonging that encouraged their customers/guests to return.
This includes the continued use of their stores and showrooms as yoga studios, with classes, different community events, and more.
2. Expanded Presence Worldwide
Lululemon’s international presence is nothing to scoff at, catering to many different countries worldwide through more than 450 stores, and its products being present in many different health and fitness establishments.
3. Online Shopping
Due to the COVID-19, the company has increased its efforts of directly selling to their customers via their online store here.
Through their numerous and diverse social media content, published articles, and marketing efforts, the company retains a steady business in the growing world of eCommerce. Businesswire reports that Lululemon’s Net Revenue increased 21% in North America and increased 47% internationally in Q4 of 2020 compared to Q4 2019.
4. Introduced new and trademarked fabrics
Product innovation is at the forefront of the Lululemon business strategy, creating high-quality and cruelty-free fabric for the use of their products.
Some of these materials include:
- Luon, Lululemon’s original, signature fabric for yoga
- Swift, extreme lightweight material made for jogging and running
- Luxtreme, wicking fabric for running
Nulux, Nulu, Everlux, Silverescent, Rulu, Jacquard, Senseknit, Ultralu, Cotton, and Everstreme are made with different purposes. These fabrics are unique to the company and are protected by intellectual property rights.
5. Expanded Product Line
The company added a new clothing line for men in 2015 in collaboration with designer Mr. Porter, an award-winning online menswear retailer.
This additional range of customers also leads to Lululemon adding sportswear for activities that men prefer over yoga, including golf and more.
The company also recently added self-care products to its merchandise, mainly for perspiration-related skin issues, that all-in-all adds up to a catalog that promotes the values of health, fitness, and wellness.
Its main suppliers are found in South East Asia, China, and other countries, with only eight percent of its products manufactured in North America. It is an efficient way to keep up with trends and adjust to ever-changing markets.
With a variety of unique materials for different purposes and the current rise of the athleisure market trends, Lululemon products have evolved from practical use to timely fashion pieces, enjoyed by all kinds of consumers.
Within the Power of Three business plan, the company seeks to further expand its for-men catalog, increase customer access, and dominate even bigger areas of the athletic apparel industry.
6. Evolving Brand Image
“If I was to recreate my business today, and compete against myself, how would I do that?”
Lululemon seeks to constantly evolve and thrive through thorough market research into current market trends in the spirit of its values.
For instance, during the pandemic, Lululemon sought to partner with familiar faces on social media platforms to produce various content, campaigns, and challenges.
Intending to promote a healthy lifestyle, these efforts encouraged those stuck inside their homes to move and exercise despite current events and not let the lack of access to gyms lead them into a sedentary lifestyle.
This represents the company’s tendency to adapt to current events and adjust its strategy accordingly.
Moreover, in 2019, the company used the Power of Three business plan, which highlighted the company’s three priorities to drive revenue growth over the next five years. These are
- Product Innovation – to more than double its men’s revenues by 2023.
- Omni guest experiences – to more than double its digital revenues by 2023.
- Market expansion – to quadruple its international revenues by 2023.’
The Plan suggests that Lululemon would expand on the menswear category, explore and innovate new ones like its new membership program, and further improve the shopping experience they provide. By improving its relatively new menswear catalog, the company can evolve from its former women-centric image to one that caters to the greater market by trying out new store formats.
7. Marketing Campaigns
Lululemon is also a paragon of effective marketing campaigns to boost brand awareness and has employed several strategies. Some have even resulted in worldwide infamy!
One such is free top and bottom promotion during the opening of their Robson St. store in Vancouver, where those who would line up completely naked for at least 30 seconds outside the store would receive free clothing.
The company also made use of different campaigns that found much success, these being:
- “Strength to Be”, which is targeted at their male consumers, and “celebrates the growing community of men living life as their true selves and representing their definitions of masculinity and strength.”
- “This is Yoga”, a campaign that featured different individuals from different countries wearing Lululemon apparel doing a multitude of different activities, hammering home that Lululemon isn’t limited to just yoga, contrary to its title, and can be used for any experience.
- #SweatLife and the “Sweat With Us” campaign, wherein Lululemon promotes their yoga classes in their stores by partnering with local yogis, holding local run clubs, and the “SweatLive Festival” event.
These are only some of its expansive marketing plans. The company’s main strategy mainly revolves around relationship marketing, which is focused on community building by increasing business engagement, encouraging brand loyalty, and attracting repeat business.
- Build a relationship with your customers. Focus on improving engagement with your audience and generate ideas that make them want to come back to you and buy your products.
- Sell lifestyle. Study your target market and appeal to their values, needs, and wants. Don’t limit yourself to simply selling products; rather, share what kind of statement they can make while using your products.
- Generate valuable content and campaign strategy. The main tool of driving business is to use effective means to reach a wider audience. This includes making value content on platforms like Instagram, Youtube, TikTok, and more, with relevant and positive messaging. For instance, clothing brands would do well to promote diversity and body positivity.
- Innovate in response to trends. Don’t be stuck in the past. Challenge yourself to develop a new product if it means adapting to trends and appealing to the new needs of your customer base.
Running a business isn’t easy, especially in very competitive industries. It takes a lot of standing out, and to do so, you have to invest in strong strategies to drive business in your direction.
With a business loan, you can have the funds to take what you’ve learned here and apply it to your endeavors, so you can further your business ventures. Compare the best business loans now from Singapore’s top moneylenders through Loan Advisor!