Executive Summary
The brand discussed in this report is Lululemon Athletica Inc. The brand is an athletic apparel retailer, whose main objective is building a community with a healthy lifestyle. Lululemon’s target market is middle/upper class 30-year-old woman. The brand is positioned as a premium high fashion brand for the athletic community. Some of Lululemon’s main competitors include Nike, Under Armour and Gap.
Some of the key findings were:
• Limited global brand awareness due to a lack of exposure to a large market because of the use of grassroot marketing tactics
• Unclear brand image: made many changes that have strayed from their main brand image and focus.
• Misuse of some secondary associations and inability to promote
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Lululemon prides itself on the innovation of the functionality and style of its product line, such as using “moisture wicking” fabric that essentially transfers the moisture from the skin to the fabric, in order to allow it to evaporate quicker. Lululemon’s target market was initially women but expanded to target men and female youth.
Lululemon’s success is due to its innovation in technology and fashion, as well as their use of community based marketing, and excellent customer focus. The company has positioned itself as a health conscience and fun brand that now operates 280 stores in North America, New Zealand, Australia, United Kingdom, and Singapore (Lululemon 10K).
Competitors/Industry
The athletic apparel industry has shown a large increase in popularity. Global sales of sport clothing have increased from 146.1 billion US dollars in 2007 to 162 billion US dollars in 2012(Global Participative Sport as Consumption). Particularly in the United States, sales of sport apparel have increased by 7% from 2013 to 2014 (Wingus). There has been a large trend in healthy living, as “activewear accounted for $33.7 billion in sales and made up 16 percent of the apparel market” (Wingus). The industry is booming, as sportswear, specifically yoga pants, has transformed into people’s daily apparel. (Refer to Appendix Table 1) Huffington post noted, “people are wearing trendy workout clothes all day, every
Over the last 10 years’ gym memberships within the United States have increased from 41.3 million to 54.1 million. The biggest trend over the last few years is becoming fit, more and more each day people are finding ways to live fit and healthier lifestyles. From eating the right nutritional foods, working out and people just wanting to follow the latest and greatest trends. The increase in gym memberships and the amount of people working out leads to the increase in athletic attire. For this exact reason athleisure wear was born, it is the newest fashion trends were people wear athletic clothing regardless if they intend go to the gym or not that day. People are wearing it to the office, shopping, to run errands and other social events. Athleisure wear consist of articles of clothing such as spandex, leggings, yoga pants, sports bras and fashionable sweats. Over the last 10 years an increase in athleisure wear has spread at a rapid rate globally, particularly in the women’s fashion industry. Since 2013 the increase in athleisure wear apparel has grown by 14% and accounts for 18% of the total clothing retail market. With this trend still catching on, active wear is expected to continue to grow at an average rate of 3.3% annually. Due to this rapid increase in purchasing athleisure wear the apparel industry will continue to grow especially Nike because they are the market leaders in active sportswear. For that exact reason I believe that Nike is a
Lululemon is one of the Canada’s best retailers of technical athletic yoga apparel. Lululemon’s yoga inspired apparel is marketed under the two brand names Lululemon Athletica for more mature women and Ivivva Athletica for younger girls. Lululemon primary target customers are educated and hard working women, who understand the importance of healthy and active lifestyle. Majority of these women are Caucasian who are mainly urban and have higher income, since Lululemon is an expensive brand .Most of their products are design to offer fit, performance and comfort while incorporating both style and function. On another hand, American Apparel
This report has been created with the intent to analyze the athletic apparel industry with a specific focus on Lululemon Athletica, Inc., further refered to as Lululemon. In this report you will find that the strengths and weaknesses of Lululemon’s current strategies and future goals are analyzed and compared to that of its closest competitors. In conclusion to the analysis, recommendations have been made to potentially guide Lululemon Athletica, Inc. in a positive direction in regards to its future endeavors. The following
Low brand awareness -, Advanced Materials Inc. needs a strong financial effort to make prospective customers familiar with the brand
Lululemon Athletica Inc., referred to as LULU in NASDAQ, is a global company based in Vancouver, Canada that deals in the designing, making and selling of athletic apparel. Founded in 1998 by Chip Wilson, the company has grown in leaps and bounds to become one of the key players in the industry.
a few percent, in 2012 the gross profit margin is the highest it has ever been
Lululemon Athletica Inc., founded in 1998 in Vancouver by Chip Wilson, is a company which designs and produces high-end yoga and technical athletic clothing. They have operated primarily in North America and Australia; their initial target customer was an educated woman who lives an active and healthy lifestyle. They opened their first store in Kitsilano in BC in November, 2000. The first store was intended to act as a community hub where people could learn and discuss about the physical aspects and mental aspects of a healthy life, in addition to selling yoga clothing.
Lululemon already has presence in international markets, having corporate-owned retail stores in Australia, New Zealand, United Kingdom and Singapore.
Lululemon Inc. has a strong history of making quality fitness clothing for yoga and other athletic purposes by the founder of the company. Dennis “Chip” Wilson in 1998. After becoming “overwhelmed” by the company’s success in Vancouver, Wilson transferred management of the company to trained managers (Nicholes, 2016, p.6). During this time, Corporate CEO Christine Day’s leadership was put into question due to the low level quality of material used to make the Luon Pants, which had a “see-through problem” due to the extreme sheerness of the pant material. More so, in 2013, corporate leadership had a lawsuit brought against the company directors, including Christine Day, of massively raising the
In the United States of America, being fit and active is an important value of the culture. Many employers give out free gym memberships or encourage their employees to take a longer lunch to go be active. According to Business Insurance, many companies in New York have been organizing midday dance parties to give their employees some time to get out from behind their desks and move. Feeling good about the way one looks can be an important part of exercise because it promotes higher self-esteem. There is no longer a need to wait until you get into shape to look good when companies like Lululemon are now producing exercise wear that is fashionable. An industry professional was quoted as saying “Our customers desire clothing that they can work out in and then head out into the world.” If clothing fits well enough, then people are going to want to wear it all the time. Although fashion trends are ever changing, Lululemon is always creating new products to keep up with them. According to The Bureau of Labor Statistics, the retail industry is considered a high growth industry. The retail trade sector is the nation’s largest employer. The growth rate of real output for the retail trade sector of the economy is 4.6% annually. From 2004 to 2014, the real output grew from 1.1 trillion dollars to 1.8 trillion dollars. This can be attributed to new apparel companies always entering the
Lululemon is a rapidly growing company with a different niche for its products. Its philosophy as well as their business model has allowed them to increase revenue over the past years. The dilemma they faced is how to continue expanding without losing their special niche, grassroots and a nontraditional feel of the brand that sets them apart from their competitors.
The industry that Lululemen operates in is the Women`s Apparel industry which is a mature, large and fragmented market that has highly sensitive to the economic conditions and trends.
Lululemon is a large company, making clothing for athletic activities, not only are they in the women’s athletic range, but they have hit the men’s market and youth range as well. A SWOT analysis will be used to break down Lululemons strengths, weaknesses, opportunities, and threats to the business. Strengths which Lululemon have achieved include multi-faceted and community-based approach strategy, making customers feel part of a community through marketing strategies like there “ambassador program, social media, in-store community boards and grassroots initiatives” (Lululemon, 2016 Annual Report, 2016, p. 3). Touchpoints which have been a part of this multi-channel include Lululemons websites www.lululemon.co.nz and ivivva.com which is based around female youth active ware. With Lululemon having 12,500 full-time employees worldwide (Lululemon Athletica Inc. (LULU), 2017) with 406 stores (Lululemon, 2016), their large market capital of $8.33 billion (Lululemon Athletica Inc. (LULU), 2017), shows the total value of Lululemons shares of stock. Lululemon having $581.1 million in net revenue, this is an increase of 13% while their gross profit increased by 17% rising to $297.4 million. (Lululemon Athletica Inc. Announces Second Quarter Fiscal 2017 Results, 2017). This shows a steady increase in profit for Lululemon for 2017 which is a strength for them.
This paper commences by defining the problems that were faced by Lululemon Athletica Inc in 2013. After, the author explores the causes of the issues that the company was experiencing and the effects that they had on Lululemon Athletica Inc. The next step is to look at ways in which the issues could have been addressed both for the short-term and long-term. When all is said and done, the audience will fully appreciate why “Lululemon Athletica Inc should revert to its fundamentals – that is, to concentrate on the needs of the consumer”.