Lululemon has Incredibly Loyal Customers
The strategies used to Differentiate Itself from Competition🏃
Lululemon is a clothing brand that makes technical athletic clothes for yoga, running, working out, and every day casual wear.
Founded by Chip Wilson in 1998 in Vancouver, Canada - in a crowded market with big name competitors like Nike, Under Armour, and Adidas, Lululemon’s been able to stay one step ahead by building one of the most loyal fan bases of any clothing brand today.
Here’s how they’ve been able to build such a loyal fanbase to separate themselves from the rest🏃
Strategy 1: Product Innovation
At its core, Lululemon is obsessed with innovation.
They have an innovation lab called whitespace, which conducts studies on human movement.
They develop new + innovative products to address customer needs/desires they weren’t aware of...
They built the space to understand their customers and how they move to a tee to design the highest quality clothing.
Combined with their ultralight and high quality fabrics, they are one of the most technically innovative clothing brands today.
Their advance s in technology have made it incredibly tough for competitors to compete.
It also allows them to charge premium prices.
They not only provide excellent products, but essentially built the entire athleisure clothing category...
Strategy 2: Create New Markets
A big part of their success comes from being first to the athleisure market.
Athleisure is hybrid clothing that can be worn for activities/sports, but also can be worn casually.
Unlike heavy duty training apparel (often not the most stylish), they essentially created a new category in everyones closet.
Instead of directly competing with Adidas, Nike, Under armour, they carved their own path by making this type of apparel mainstream.
Strategy 3: Addictive Experiences
Free yoga classes and running clubs are just a couple examples of how they engage with consumers.
Each time someone participates, they form a unique and personal connection with the brand.
After a positive experience, it makes consumers want to continue to support and associate themselves with the brand, even years after the experience.
In 2012 they started by hosting free Yoga classes on Parliament Hill in Ottawa, Canada. They had a strong presence in the Canadian market in the earlier days.
The events gathered hundreds of people all in one place, boosted brand awareness, and left people with a good taste in their mouthes.
Word of mouth spread rapidly around the city, spreading from fitness communities and gyms all around town.
Strategy 4: Create Scarcity
Their clothing items sell out fast, and select items are re-stocked every Tuesday online.
Lulu fans know this, and it's effective in leading to impulse buys in fear of them selling out. That’s how Lululemon is able to leverage good old fomo (fear of missing out).
High demand + low supply = selling their clothes in full price
Scarcity leads to:
- More sales
- Larger order quantities
- More time spent browsing online
If there’s an item in stock it could sell out quickly... customers feel such an attachment to the brand and don't wait
They also rarely have items on sale, and customers know this. The high quality products and the low quantities has helped establish themselves as a premium brand.
Scarcity also generates WAY more website traffic. Most customers visit stores a few times a year. Lululemon's turnover leads to eager customers waiting to see new designs.
According to Kenji Explains, Lululemon customers visit the website on average 15 times/year - generating about 4X the traffic of most apparel online stores.
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TLDR
Strategy 1: Strong emphasis/investment in product innovation (product differentiation).
All growth starts with an amazing product (product led growth)
Strategy 2: Created a new market to "get there first.”
They were the first to the athleisure market because they created it themselves (and haven’t looked back)
Strategy 3: Provided "addictive" brand experiences through interactive events.
Provide entertaining, valuable, unique experiences people will remember
Strategy 4: Created scarcity in product availability
Established your brand/products as “premium,” increases website traffic, and order sizes
Hope you enjoyed this breakdown… stay tuned for more 🔥
Sources used:
https://www.fool.com/investing/general/2013/01/29/heres-what-makes-lululemon-unique.aspx
https://www.digitalcommerce360.com/2017/02/21/lululemon-better-targets-its-shoppers-and-grows-sales/
https://dgajsek.com/growth-study-lululemon/
https://medium.com/@michaelangelo_q/a-growth-strategy-for-lululemon-68819680e511
https://www.businessinsider.com/lululemon-and-the-rise-of-athleisure-2015-7?IR=T