Latana x Lululemon logos with woman in leggings (Cover image)
Brand Deep DivesMarch 15, 2022

How Lululemon Dominated the Athleisure Brand Category

March 15, 2022
Elena Author Photo Framed
Elena Prokopets
Freelance Writer & Content Strategist

By many accounts, athleisure is the signature fashion trend of the 21st century. From your corner store to the Met Gala runway, average folks and celebrities alike have donned this relaxed aesthetic from head to toe.

Steadily growing year-on-year, the athletic apparel sector is expected to reach $257 billion in value by 2026. So, it's not surprising that many apparel brands have ventured into this vertical.

One of the pioneering companies behind this trend is Lululemon — a yoga-inspired activewear brand that rapidly became a staple in every Millennial woman’s wardrobe.

But, similar to some other lifestyle brands — like the equally beloved and criticized Goop or scandal-prone Honest Company — Lululemon’s brand story is riddled with a lot of controversies, much because of its eccentric founder.

In this Brand Deep Dive, we break down how Lululemon’s brand marketing evolved over two decades and what they’ve been doing to cement their leadership position.

Lululemon Success Story

Source: Business in Vancouver

Lululemon is the brainchild of Dennis J. Wilson, better known as Chip Wilson. Vancouver-born, California-bred, and well-traveled, Chip Wilson has always been a sports buff. Swimming, college football, and triathlons were part of his personality — and so were entrepreneurial cravings.

After completing business school, Wilson was hired as a manager by a Calgary oil and gas company. The corporate career never felt inspiring, but Wilson needed cash for his other pursuits — such as a small booth selling sportswear, operated jointly with his then-girlfriend.

For a couple of years, the apparel business was mildly successful. During some seasons, the duo struggled with cash flow — but the fabric-obsessed Wilson would then come up with a new sporty item design, and it would fly off the shelves. Wilson’s first apparel business, Westbeach, went through several iterations. They designed and sold BBQ shorts, sweatpants, skating wrap shorts, and, afterward, snowboarding and surfing items.

In every case, Wilson was fixated on creating better, more convenient cuts to make truly comfortable and high-performing clothes. As an avid sportsman, he personally knew the shortcomings of other items on the market and kept inventing new ways to make the items’ fit less constrictive and more flattering.

Westbeach did well throughout the 80s and 90s but started to collapse under supply chain and distribution issues in 1995. After 18 years of running this business, Wilson had to admit the hard truth: Westbeach was not profitable.

The company had two retail stores, earning over $1 million per year, but the flawed international wholesale distribution model cost them over $1 million at the same time. Wilson proceeded to sell Westbeach and returned to Vancouver.

The money from his first business allowed Wilson to lead a comfortable life. He wasn’t worried about getting another job and was considering different opportunities.

During this transit “soul-searching” period, Wilson also started practicing yoga. Bothered by his back pain and old sports injuries, he found great relief at a local studio. However, instead of mindful meditations, his brain kept spinning in the new creative direction.

When observing fellow yogis, especially women, Wilson realized that available apparel had many flaws. Some items didn’t fit right and lacked technical performance characteristics. Many fabrics weren’t sweatproof.

As Wilson writes in this memoir, “The Little Black Stretchy Pants”:

“From my first yoga class, I knew exactly the fabric I wanted to use to make my yoga apparel. I had used a version of my dream fabric as the first layer under snowboard clothing for the emerging fourteen- to eighteen-year-old female snowboard market.”

So once again, Chip Wilson decided to get back into the technical apparel business. Yet, this time around he had:

  • A clear-cut, non-crowded apparel niche

  • A better understanding of target audiences

  • Knowledge of different retail models

  • A powerful brand story in the making

Wilson spent a lot of time bouncing ideas off his then-yoga instructor and other attendees. Bit by bit, he constructed his future brand vision and the ideal customer personas to pursue — “Power Women and Super Girls”.

What Wilson did right was pinning down a viable target audience segment. But his definition of it was cringy at times. By Wilson’s accounts, the ideal brand fans would have money, devotion to health, organic food, athletics, and fashion — but also “independence and emancipation, obtained due to the advent of birth control and causing high divorce rates”.

Lululemon, an apparel store by day and yoga studio by night, opened its doors in 1998. From there on out, the business took off.

Wilson came up with the now-iconic Lululemon yoga leggings. He also put a ton of time and thought into the technical characteristics of other garments his company produced. Cuts, fabrics, flaps, zippers — the attention to detail was meticulous.

Despite making some impressive innovations in apparel design, Wilson’s approach to decision-making and brand development, in particular, was ambiguous.

He settled for the name “Lululemon” because it was hard for the Japanese people to pronounce. Based on his past experience at Westbeach, he believed that Asian consumers found brands with the letter “l” were more exclusive, luxurious, and appealing. Later, Wilson was heavily criticized for his racially offensive remarks.

In the early days, Wilson also forced all Lululemon staff to attend “Landmark Forum” – a notorious personal development program, which many deemed a scam, but Wilson personally found very inspiring.

Then in 2007, the company took a major PR hit when independent testing done by journalists confirmed that Lululemon’s Vitasea line fabric was not made out of seaweed. Those were just false marketing claims.

Still, despite media scrutiny, Lululemon’s business kept booming. Much of the credit for that success should go to Wilson.

The Vancouver location wasn’t just a storefront — it was a place where you could sign up for yoga, talk about healthy living, buy organic snacks, and receive shopping advice from the in-store “Educator”.

Source: Retail in Asia

Wilson practiced the philosophy of “personal selling”. He trained the sales staff (rigorously hired to represent the Super Girl persona) to follow this script:

“If a Guest was looking at a product for six seconds, an Educator had a thirteen-second window to educate them about the item. Barring any follow-up questions, the Educator would then leave them alone until they looked at another item for around six seconds.”

This strategy, paired with strategic in-store layout design, helped Lululemon reach the same volumes of sales per square foot as Apple and Tiffany & Co. stores had.

In the brand marketing department, Wilson was priming Lululemon to become a “Church of Athletics” — an awe-inspiring, aspirational, and soulful hotspot all the cool girls go to. Wilson was building the perfect world for his Super Girl and Super Girl wannabes.

However, Lululemon’s vibe wasn’t for everyone. The in-store brand experience progressively morphed into what the New York Times journalist Rob Walker described as an “annoying phony-baloney status symbol” in 2009:

“Lululemon is peddling ‘props’ that may offer a sense of community to some but alienate others who might benefit from yoga but don’t fit what she calls the chain’s ‘yoga chick’ image and attitude.”

Wilson was unphased by the “loss of touch” with the original yoga community. On the contrary, as Lululemon sales volumes grew, as did the number of stores. Thanks to a booming business and successful IPO, Wilson found more confidence to express his “philosophical” views on modern womanhood.

The news pages circa 2008-2013 have collections of Wilson’s most off-color quotes or actions plastered front and center. From Wilson's suggestion that “career obsession leads to breast cancer” to off-hand remarks about “acceptable usage of child labor in developing countries” and fat-shaming comments, Wilson exercised no discretion when talking to the media. And, to top it all off, lacked a sense of self-awareness and humility to understand his mistakes.

By 2013, other company stakeholders were fed up with Wilson’s antics. Every new comment from him caused the corporate shares to plummet, and he was asked to leave the CEO position. By 2015, Wilson was also removed from the board of directors.

After a decade of peak growth, Lululemon entered a financial downturn. In 2013, the company shares declined by 11% as did the revenue. This downward trend continued until 2017 as new leadership struggled with finding a new footing for the brand.

In 2018, Lululemon finally managed to shake off the negative associations left by the polarizing founder. They scrapped most of the mentions about Wilson from the brand website and accelerated its transition to eCommerce.

Source: Nolan Dueck

By 2019, Lululemon was back on track with stronger financial results and a new brand marketing strategy, called “Power of Three”.Their three new verticals for growth were:

  • Product innovation: Apart from launching new product lines for women, Lululemon also wants to double the size of its men’s revenues by 2023.

  • Omni guest experience: Lululemon stores will no longer be the focal point for brand marketing. Instead, the team wants to diversify the range of experience it provides across channels, try out new store and event formats.

  • Market expansion: Lululemon also wants to be present in more markets and plans to quadruple its international revenues by 2023.

The team also polished their brand mission statement and soft-launched an improved version of the website. None of the new branding initiatives directly referenced “Wilson-era” brand pillars.

3 Lessons from Lululemon’s New Brand Marketing Strategy

Lululemon always had a distinct “brand” element to it. After all, their core product is a pair of leggings — a “commodity” product, sold by hundreds of other retailers at a much lower price. Without strategic investments in brand equity, Lululemon apparel wouldn’t have flown off the shelves at the speed they do.

Despite several challenging years, the company managed to turn the odds in its favor once again — primarily by nurturing new brand associations and changing the customer sentiment towards it. The efforts paid off. In 2020, Lululemon became one of the fastest-growing retail brands, touting a 40% increase in brand value.

Here are three “recovery” lessons other brand marketers can borrow from Lululemon.

1. Activate Your Digital Communities

A large physical retail footprint and distinctive in-store brand experience were two pillars of Lululemon's success in the 2000s. But in the 2010s, consumer attending and spending started shifting online. When the pandemic hit, a compelling online selling experience became a given.

Lululemon stayed on top of these changes and acted on them fast — unlike other store-dependent brands like Pandora.

As Nikki Neuburger, Lululemon’s Chief Brand Officer, explained in an interview:

“We were already in the (process) of elevating our digital offerings to create more guest-centric omni-experiences, but the pandemic increased and accelerated digital engagement across the board.”

After the first wave of “stay at home” orders and store closures, Lululemon rapidly launched Community Carries On — an online hub featuring free ambassador-led workouts and mindfulness practices. Video content was also distributed over YouTube and IGTV.

Rapidly amassing millions of views, the workout sessions, paired with other promotional social media content, gave Lululemon a significant boost in brand awareness numbers and subsequently a 94% growth in digital sales volumes.

The Takeaway: Brands with a strong physical footprint and long-term record of successes with out-of-home advertising are often reluctant to transition to digital marketing and sales. But online attention is the new equivalent of foot traffic.

Engaging your audiences online is key to growing important brand KPIs like brand consideration and preference.

2. Evolve Your Brand Narrative

Lululemon did a great job of building a community of superfans, eager to pay a higher price for becoming part of the #sweatlife community of athletes. But as their product portfolio expanded, the team was also looking for a change in brand positioning. They wanted to associate themselves with “wellness”, rather than “workouts” alone.

Artistic brand storytelling is their way of making that change. Instead of continuing the narrative around “convenient, high-performing, sustainably-made, and innovative workout gear”, Lululemon spins the story of how different sports practices — be it yoga, meditation, or running — help you “feel better”. Plus, suggest to shoppers that you can feel like your best self in Lululemon clothing.

The 2020 multichannel “Mindful Run” campaign oozed mental, emotional, and spiritual rejuvenation in every frame — while only subtly spotlighting the Lululemon brand.

Source: The Drum

The 2021 global “Feel Charge” campaign had a similar ring to it. It used electrifying sounds, textures, and close-up shots to show what you feel in the moment, wearing Lululemon’s gear.

The Takeaway: Traditional marketing wisdom says that you need to “sell benefits, over features”. But when consumers already know your products are good, you need to get more creative with your messaging.

Lululemon chose “feeling” as a focal part of their new brand narrative — an element that well-aligns with their experience-driven branding. That’s a strong move since 62% of consumers say they have a relationship with a brand — something you can’t cultivate without emotion.

3. Know When It’s Time To Expand

Lululemon has long thrived as a female-oriented brand, but that’s just one, very competitive niche.

After Wilson’s departure in 2015, Lululemon began the gradual cross-category expansion to male products. They had some good successes with the “anti-ball crushing” trousers and yoga pants for men — progressively building another die-hard community of fans. Still, women's product sales remain 3X higher than men’s.

As CEO Calvin McDonald mentioned in a 2019 interview with CNBC:

“We know our awareness and consideration within the men’s category is still low, and that is where the opportunity lies”.

So, the team doubled down on developing new male apparel models and getting more active with their marketing. In 2021, they launched their biggest-ever man-oriented campaign, narrated with an Oscar Wilde “Selfish Giant” verse.

Source: Droga5

The two-minute video shows the life of a depressed man, obsessed with his rigid, daily routine. Until one day, he once again starts feeling alive again — thanks to the support of the community around him. While the hero wears Lululemon apparel, the brand is only mentioned at the very end of the story.

Lululemon also recruited more male brand ambassadors with the likes of Mark Healey, Kyle O’Quinn, and Charlie Dark in their ranks. Still, among the brand’s top 50 Earned Media Value (EMV) drivers from April 2019 to March 2020, just one online influencer was male.

Clearly, Lululemon will need to put in more work to reach its goal of 2X more men’s apparel sales by 2023.

The Takeaways: Transforming a brand narrative from a female-led brand story to a gender-neutral or male-oriented one isn’t easy, especially in a competitive market with established category leaders.

While Lululemon did have some early successes with attracting male audiences, they are still far from dominating the center of the brand funnel. It takes more than one artistic campaign and several influencers to change the consumer’s perception of your brand. So set realistic timelines.

Final Thoughts

Lululemon had a strong head start by putting customer insights in the center of everything they did — from product design to branding and selling experience. They’ve inspired shoppers through brand advocacy and built a cult-like following over several short years.

But as cultural contexts evolved in the 2010s, Lululemon struggled to stay relevant — and this was reflected in their sales. Thankfully, the team managed to change their brand narrative and brought in a newer version of Lululemon many OG and new fans adore.

Now, the brand is relentlessly working on new, ambitious targets and it will be interesting to see whether they’ll succeed with building an international, omnichannel, gender-neutral brand experience.

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