How Lululemon became one of the biggest risers in the BrandZ Top 100 – Econsultancy

In the past couple of years, the brand has seen significant success, generating sales of $3.3 billion in 2018 alone.

On the back of this, Lululemon has been named as the second-fastest rising brand across all categories in BrandZ’s Top 100 Most Valuable Brands ranking. With a 77% rise in value year-on-year, it now leads the apparel category in terms of value growth.

So, what has contributed to Lululemon’s success? More to the point, what does this tell us about wider trends within retail and marketing?

Cultural shifts 

BrandZ’s report highlights a significant cultural shift, with greater mindfulness about health and wellness impacting the development of products and services in global markets. We have seen large beverage companies introduce healthier drinks, for example, as well as cosmetics brands create products (and roll out marketing) that celebrates natural beauty.

At the same time, there’s been significant focus on environmental issues, with brands looking to find sustainable alternatives and encourage consumers to make better choices.

In turn, consumers are also showing greater interest in brands that align with these values, particularly those that talk about them with authenticity and genuine concern.

Lululemon has capitalised on its own links with well-being and self-worth, consistently weaving this narrative into both its products and marketing. According to BrandZ, this has allowed Lululemon to differentiate itself within the athleisure market, enabling it “to command premium prices when lower prices were widely available, especially online”.

Indeed, despite direct competition from the likes of Fabletics and Sweaty Betty, as well as broader brands like Amazon and H&M, Lululemon has proved the theory that ‘brand is best’. In other words, by drawing consumers in based on values and messaging rather than product alone.

Category ownership

That being said, the quality of Lululemon’s product is certainly not to be sniffed at. The brand has utilised technology to develop both comfortable as well as performance-driven clothing. This helps to differentiate the brand from the likes of Nike and Under Armour, which tend to be more gym-orientated and targeted towards younger consumers.

Lululemon is arguably the original creator of the ‘yoga-wear’ trend, with the brand producing athleisure-wear that can be worn for working out as well as day-to-day. Since, it has faced competition in this area from a wide range of brands, but has managed to sustain consistent ownership of the category.

This is largely due to the brand’s commitment in doing so, using its ‘salon-retail’ model to promote a certain type of lifestyle. This relates to the consumer desire for personal achievement rather than material products.

As a result, many of Lululemon’s stores also double up as yoga and fitness studios, with classes often led by ‘store ambassadors’, i.e. influencers in local communities who are passionate about sport and well-being.

Store strategy

While ecommerce remains a big focus for Lululemon, the brand has also been expanding its bricks-and-mortar locations, opening up a number of new stores in 2018 and continuing with more in 2019.

Lululemon’s store concept is unique because it does not take a ‘one size fits all’ approach. Rather, it uses four different store formats, including temporary or ‘seasonal’ stores, pop-ups, and three others, steadily increasing in size to its biggest: a 25,000 square foot store. The latter is reportedly set to open in Chicago in summer 2019.

With many retailers struggling to draw consumers into physical stores, Lululemon’s approach is simple yet effective. By testing new markets before permanently opening stores, as well as increasing the size of its most popular ones, Lululemon has managed to scale up to success.

Community focus

Lululemon’s focus on in-store workouts has helped the brand to build a loyal customer-base. On top of this, it also fosters a community-feel by incorporating customer ideas in product development, generating feedback from members of its loyalty program, ‘Sweat Collective’.

Elsewhere, Lululemon also uses social media to communicate and engage with its audience on a consistent basis. It is highly responsive to both positive and negative feedback online, which helps to promote an honest and authentic persona, and encourage a two-way dialogue with users.

Lululemon’s social content is always aligned with its ‘lifestyle-led’ image, too, often promoting the message that it is not the activity itself that is important but what people get from it.

The “This is Yoga” campaign is a perfect example of this, with the brand endorsing yoga in relation to the values of self-discipline, meditation, and non-violence. The campaign also encouraged consumers to share accounts of how a similar philosophy has benefited their own life, again reinforcing the sense of community around the brand.

Building awareness with men

Lululemon started producing products for men around four years ago. Now, the brand is reportedly ahead of schedule on its goal to reach $1 billion in men’s sales by 2020, while 30% of new customers it attracts are said to be men.

This is largely due to clever digital marketing from Lululemon, which positions the brand’s products in relation to both fitness and leisure.

While many men might wear Nike or Under Armour outside of the gym, Lululemon’s wider product offering – including chinos and polo shirts – are more aligned to every-day wear (and designed to suit any environment).

And instead of focusing on yoga (which fewer men appear to be interested in), the brand puts running and cycling gear front and centre in terms of fitness – also promoting the products in relation to the mindful benefits of exercise. Finally, Lululemon released a capsule collection for Mr Porter in 2018, helping to widen male awareness of the brand and generate further sales.

By recognising this opportunity for growth, and ensuring that its marketing efforts align with wider brand purpose and values, Lululemon has established itself as an apparel brand to watch.