Lululemon is a Canadian
brand that became known for its expensive workout clothes. The brand charges
$100 for a pair of yoga pants, which is definitely a high price for most of the
people. As a result of their big success, may cheaper alternatives have arisen, however,
the brand’s Chief Executive Calvin Mc Donald does not see the “need” to lower
its price, offer discounts or sell their products in any other store or website
besides their own.
He believes that the
brand has just started growing and is now focused on creating new products “from
deodorant to sneakers”. At the same time, he would like to make the brand known
by more people and expand to European and Chinese markets because he thinks
that the brand is much more than just an “athleisure trend”, instead, it is a
bigger trend. Also, the company has had some legal issues since the two
previous CEO’s have been accused of improper conduct towards women, so McDonald made sure that he understood the culture of the brand before joining.
The success of Lululemon can be attributed to its distinctive “high-end attire”
which is made of “unique fabrics” thanks to a patented component that makes
them softer and that promises to offer excellent performance. Even though its most famous products are the leggings,
they also sell sports bras, outerwear, and work pants. The company also uses a
marketing strategy based on “ambassadors” that wear their clothes and promote
them at events and unlike other brands, they only sell their products through their
stores and website. McDonald states that he focuses on innovation and experiences
instead of founding discounts.
They
are also testing stores that have a food and juice bar, yoga and meditation
studios as well as a loyalty program. However, according to Bernstein, the
brand is still not known by many people here in the U.S. Their competitors are
Nike, Under Armour, Athleta and Victoria Secrets. Even though the company has
been experiencing growth in their fiscal year reports, some analysts argue that
this would not be sustainable if the brand does not become “more accessible”. Similarly,
some shoppers believe that their product is too expensive for what it is even
though they are the most famous among women that have higher incomes.
This article was the
most interesting of all the articles that I have read during this project. It
mainly focuses on the approach that Lululemon has taken on its price strategy
since they decided not to offer discounts as many other brands. Instead, they
believe that their brand image should remain exclusive and available only for
those willing to spend that much money on high-quality sportswear. This is also
the reason why they decided to only sell their products in their stores. However,
I found interesting that they want to incorporate other kinds of products such
as deodorants because I wonder how much it would cost and if people would be
willing to pay as much for it. I also think that expanding to the international
market could be risky because they are not even as known in the U.S. as other
brands and also because of their “exclusivity” that might not sell in other
countries as it does here. It is also amazing that they have been able to
continue growing their sales after the scandals that they had with their two
previous CEO’s. It makes me think on how they were able to maintain their brand
reputation especially because their brand that mostly sells to women and these
CEO’s were accused of sexual harassment and body shaming. Finally, I would see if McDonald’s approach is
going to work or if the analysts’ prediction turns out to be right.
Link to article: https://www.wsj.com/articles/lululemon-chief-no-need-to-discount-100-yoga-pants-11556035545?mod=searchresults&page=9&pos=10
By: Adriana Chacon
That is surprising that Lulu sees such a successful future to want to expand to even having there brands in studio's. Lulu knows how to market themselves in society with now their name brand holding so much weight and not even offering discounts to show they are like Louis. Very interesting article. I own a couple of their workout shirts, leggings and jackets because I love the quality but now there is Gym Shark which is MUCH cheaper and has just as great quality as them....
ReplyDeleteI agree on Lululemon's strategy to not discount their items. From buying their product and personally knowing how popular they are, I don't see any reason as to why they should feel the need to discount. It definitely keeps up their image of exclusivity. The only pitfall is the average consumer will probably be limited as to how much Lululemon they will buy versus another workout clothing brand because of the price point.
ReplyDeleteI can set up my new idea from this post. It gives in depth information. Thanks for this valuable information for all,.. workout clothes
ReplyDelete