Lululemon Portfolio.indd - Sam Fox School | Sam Fox School

Running Head: LULULEMON: SIZING UP TO REGAIN CONFIDENCE
Lululemon: Sizing Up to Regain Confidence
Sarah Mae Ettinger
Washington University in St. Louis
Fashion Design
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LULULEMON: SIZING UP TO REGAIN CONFIDENCE
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Lululemon Athletica, Inc.
Strengths
• Premium luxury active lifestyle brand
• Innovative Design Process (e.g.
technically advanced fabrics and
feedback-based designs)
• Vertical retail strategy with consistent
low inventory base, (Lululemon Athletica, Inc., 2014)
• Selective outside retailers position Lululemon as a high status company
Weaknesses
• Reliance on third-party suppliers to provide fabrics could affect supply chain and production
• Potential for continuous growth could increase
complexity of business and harm brand image
and financial performance
• Recent adverse publicity associated with product
and store design (O’Connor, 2013)
• Manufacturing technology and fabrics are not
patented and could be copied by competitors
Opportunities
• Baby boomer generation’s focus on
longevity will increase demand for
athletic wear
• Transition of activewear apparel into
the ready-to-wear industry will allow
for expansion of product lines (Sherman, 2014)
Threats
• Fluctuating costs of raw materials could increase
cost of goods sold (Lululemon Athletica, Inc.
2014)
• Increasing labor costs in China could increase
cost of production
• Companies that do not traditionally produce
athletic wear are creating similar products at
lower prices
• Women’s weight in the US has steadily increased since the 1990s, limiting Lululemon’s
consumers (Appendix A)
Under Armour, Inc.
Strengths
• Innovative fabrics (ex: HeatGear)
• Acquisition of MapMy Fitness, Inc. will grow brand
awareness (Under Armour, Inc. 2014)
• Strong marketing strategies that target highperformance and high- visibility athletes (e.g.
“Womanfiesto,” featuring Giesele Buduchen)
(O’Connor, 2014)
Weaknesses
• Unstable and inconsistent
inventory levels (inventory to
current quarter sales put UA at
109%, (Henage, 2014))
• Company’s ability to effectively
manage growth and more
complex global business
Opportunities
• Baby boomer generation’s focus on longevity will
increase demand for athletic wear
• Transition of activewear apparel into the ready-to-wear
industry will expand product lines (Sherman, 2014)
• Women’s weight in the US has steadily increased since
the 1990s, allowing Under Armour a larger clientele
base since it offers extended sizes (Appendix A)
Threats
• Labor disruptions may slow
material sourcing and product
distribution
• Non-traditional athletic wear
companies are breaking into the
industry (e.g. H&M, Forever21)
• Sponsorships and designations
of official suppliers may become
more expensive
LULULEMON: SIZING UP TO REGAIN CONFIDENCE
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Athleta, Inc.
Strengths
• Association with parent company (Gap, Inc.)
allows for greater resource availability and
joint distribution and production with other
subbrands
• Other brands of Gap, Inc. support and produce
extended sizes (e.g. Old Navy)
• “Power to the She” campaign promotes female
empowering message, heightening company’s
appeal to female athletes (Gap, Inc., 2014)
Weaknesses
• As part of Gap, Inc., Athleta is
associated with any negative publicity
the parent company experiences
• Change in Gap, Inc. CEO after 7 years
could affect public sentiment toward
Athleta and affect profit margins
(Gensler, 2014)
Opportunities
Threats
• Labor disruptions at ports of
• Baby boomer generation’s focus on longevity
manufacturers may slow down material
will increase demand for athletic wear
sourcing and product distribution (Gap,
• Transition of activewear apparel into the readyInc., 2014)
to-wear industry will allow for expansion of
• Non-traditional athletic wear
product lines (Sherman, 2014)
companies are breaking into the
• Women’s weight in the US has steadily
industry (e.g. H&M, Forever21)
increased since the 1990s, which allows Athleta
a larger clientele base since it offers extended
sizes (Appendix A)
Marketing Plan
Market Analysis
Since Lululemon’s inception in 1998, women’s weight in America has been steadily
increasing (Appendix A). Companies such as Under Armour and Athleta have adapted their
clothing to fit the needs of this new consumer by creating special and extended sizes. Lululemon,
however, has made it clear to their investors and shoppers that they will continue to promote a
“skinny lifestyle,” and only carry through size 12. According to a survey conducted by Gallup,
the average American woman today weighs 17 pounds above what she considers to be ideal (Appendix B). Under Armor and Athleta have created active campaigns to combat body image issues
and empower women with slogans such as, “Womanifesto” and “Power to the She,” respectively
(O’Connor). Although the public has urged Lululemon to adopt such ideas, they continue to shun
LULULEMON: SIZING UP TO REGAIN CONFIDENCE
larger sized women from their stores and actively ignore the 14 billion dollar plus-sized industry.
Lululemon needs to reinforce the confidence of their current customer, as well as a new, larger
customer, by creating garments that make women feel and look their best regardless of size.
Marketing Strategy
Social Media: Facebook.
• Effective targeting tools allows demographic, social and personal segmentation
• Ability to reach millions of individuals in a matter of minutes and gage reaction to new product through “likes” and website-tag tracking
Social Media: Women’s Health Online Resources.
• Visually associates the brand with an active and “healthy lifestyle,” important to the Lululemon customer
Print Advertising: Martha Stewart Magazine.
• Consumer demographics align closely with the Lululemon target customer: female, affluent and active, with a median age of 49 (helping to target an older generation)
Celebrity Endorsement: Christina Hendricks.
• Ms. Hendricks is an active yogi with an extremely body positive attitude and reflects the body type of the “new customer” Lululemon wants to attract
• She gives the brand credibility by promoting self-confidence and body equality, which customers will come to associate with the Lululemon name
Community Involvement: Yoga in the Park.
• Promotional yoga sessions in public parks reinforce the grassroots marketing technique the brand was founded on by directly engaging with the consumer in a public setting
Community Involvement: Special Child Campaign.
• By engaging with Yoga for the Special Child, a therapeutic yoga program that helps special needs children, Lululemon can actively give back to the community, while reinforcing their positive public image (Yoga for the Special Child, 2014)
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LULULEMON: SIZING UP TO REGAIN CONFIDENCE
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Lululemon Marketing Budget Plan
Social Media Advertising
Facebook
Twitter
Women's Health Magazine Online Video
Women's Health Magazine Online Mobile
Banner
Social Media Total
Print Advertising
Yoga Journal Print (50 words and logo)
Martha Stewart Magazine
Print Total
Endorsements
Christina Hendricks
Endorsements Total
Community Involvement Advertising
Yoga in the Park (Ex: Bryant Park, NYC)
Yoga for the Special Child Campaign
Community Involvement Total
Total Marketing Budget
Aug
Sept
Oct
Nov
Dec
Jan
Total
1,000
7,225
3,675
7,000
3,500
8,000
6,000
12,000
4,500
10,000
30,130
3,775
8,000
22,450
52,225
30,130
25,000
33,225
10,675
25,000
36500
18,000
44,630
11775
50,000
154,805
0
6,675
188,580
195,225
500,000
500,000
2,225
2,225
2,225
2,225
188,580
188,580 2,225
2,225
0
50,000
50,000
100,000 100,000 150,000 50,000
100,000 100,000 150,000 50,000
50,000
50,000
24,970
25,000
50,000
99,970 99,970
99,970 149,970
161,745 1,000,000
24,970 25,000 0
0
0
110,420 135,675 138,725 356,580 96,855
Table 1. Lululemon Marketing Budget August-January
New Retailer Opportunities
Nordstrom
• Nordstrom’s unparalleled customer service will abolish any anxiety larger customers may have previously experienced shopping exclusively at Lululemon stores (Bhasin)
• The department store already sells extended sizes in a variety of apparel areas,
guaranteeing the presence of larger customers.
Net-a-Porter.com
Page 1 of 2
• The high-end website will sell Lululemon among top-tier athletic
brands on the market, associating the brand with high quality and high price
• The database does not sell Athleta or Under Armour, allowing Lululemon to differentiate itself from main competition
Sportluxe.com
• Australian website that promotes healthy living, high end sportswear and body equality among all women
• By using a foreign company to promote Lululemon’s products, the brand will be able to expand their name internationally
LULULEMON: SIZING UP TO REGAIN CONFIDENCE
Lululemon Fall 2015 Collection
The Fall 2015 Lululemon Collection is designed to make women look
as good as they feel when being active. The ruching technique is used to create
the illusion of a slimmer figure, especially in areas where women naturally
retain weight. This technique will appeal to all sizes because everyone wants to
emulate their ideal body image.
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LULULEMON: SIZING UP TO REGAIN CONFIDENCE
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LULULEMON: SIZING UP TO REGAIN CONFIDENCE
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Lululemon Fall 2015: Delivery 1
SKY
WHITE
SEAFOAM
GOLDENROD
BLACK
CRATER
LULULEMON: SIZING UP TO REGAIN CONFIDENCE
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Lululemon Fall 2015: Delivery 2
WHITE
SLATE
PERIWINKLE GOLDENROD
BLACK
HUBBLE
LULULEMON: SIZING UP TO REGAIN CONFIDENCE
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Lululemon Fall 2015: Delivery 3
WHITE
SLATE
PUMPKIN
CRANBERRY
BLACK
APOCALYPSE
LULULEMON: SIZING UP TO REGAIN CONFIDENCE
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Lululemon Fall 2015 Hangtags
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why we made this.
1. You are already confident in
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your own skin, but sometimes
everyone needs extra support.
2. The design of this garment is
meant to slim and shape womens’
bodies in a natural and comfortable
way for all sizes and shapes.
3. The ruching technique is both
functional and decorative because
everybody should look as good as
they feel when being active.
LULULEMON: SIZING UP TO REGAIN CONFIDENCE
Appendix A: (Newport)
Appendix B: (Newport)
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LULULEMON: SIZING UP TO REGAIN CONFIDENCE
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References
Advertising on Facebook. (2014, January 1). Retrieved November 11, 2014, from https://www.
facebook.com/business/products/ads
Alleger, J. (2011, December 11). How Much Do Ads on Twitter Cost? Retrieved November 11, 2014, from http://www.pennapowers.com/how-much-do-ads-on-twitter-cost/
Alindogen, M. (2014, October 15). Size Matters: Lululemon And Athleta's Marketing Strategies
| Neon Tommy. Retrieved November 8, 2014, from http://www.neontommy.com/
news/2014/10/size-matters-lululemon-and-althetas-strategy
Bhasin, K. (2013, July 31). Shunning Plus-Size Shoppers Is Key To Lululemon's Strategy,
Insiders Say. Retrieved November 8, 2014, from http://www.huffingtonpost.
com/2013/07/31/lululemon-plus-size_n_3675605.html
Dishman, L. (2013, November 8). Lululemon's Biggest Problem Is A Founder With Foot-In-
Mouth Disease. Retrieved November 8, 2014, from http://www.forbes.com/sites/lydia
dishman/2013/11/08/lululemons-biggest-problem-is-a-founder-with-foot-in-mouth-dis
ease/
Gap, Inc. (2014). Form 10-K 2014. Retrieved from SEC EDGAR website http://www.sec.gov/
edgar.shtml
Gensler, L. (2014, October 8). Gap Stock Sinks After CEO Announces Departure. Retrieved
November 8, 2014, from http://www.forbes.com/sites/laurengensler/2014/10/08/gap-ceo
glenn-murphy-to-retire/
LULULEMON: SIZING UP TO REGAIN CONFIDENCE
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Henage, M. (2014, October 16). 2 Reasons To Buy Under Armour, 1 Reason To Worry. Retrieved November 8, 2014, from http://seekingalpha.com/article/2567405-2-reasons-to-buy-un
der-armour-1-reason-to-worry?page=2
Lululemon, Inc. (2014). Form 10-K 2014. Retrieved from SEC EDGAR website http://www.sec.
gov/edgar.shtml
Mad Men's Christina Hendricks on Loving Your Body. (2014, January 1). Retrieved November 11, 2014, from http://www.webmd.com/women/features/christina-hendricks?page=2
Martha Stewart Media Kit. (2013, January 1). Retrieved November 11, 2014, from http://mslom
ediakit.com/
Newport, F. (2007, November 28). Average American Weighs 17 Pounds More Than "Ideal"
Retrieved November 8, 2014, from http://www.gallup.com/poll/102919/average-american-
weighs-pounds-more-than-ideal.aspx
O'Connor, C. (2013, November 11). Do You Accept Lululemon Billionaire Chip Wilson's Teary Apology Over His Body-Shaming Comments? Retrieved November 8, 2014, from http://
www.forbes.com/sites/clareoconnor/2013/11/11/do-you-accept-lululemon-billion
aire-chip-wilsons-teary-apology-over-his-body-shaming-comments/
O'Connor, C. (2014, September 4). Under Armour Goes After Lululemon With Gisele And 'Womanifesto' Retrieved November 8, 2014, from http://www.forbes.com/sites/clareocon
nor/2014/09/04/under-armour-goes-after-lululemon-with-gisele-and-womanifesto/
LULULEMON: SIZING UP TO REGAIN CONFIDENCE
Sherman, L. (2014, June 5). Is Activewear the New Denim? - The Business of Fashion. Retrieved November 8, 2014, from http://www.businessoffashion.com/2014/06/is-active
wear-the-new-denim-lucas-hugh-lululemon-athleta.html
Under Armour, Inc. (2014). Form 10-K 2014. Retrieved from SEC EDGAR website http://www.
sec.gov/edgar.shtml
Women's Health Media Kit 2014: Digital. (2014, January 1). Retrieved November 11, 2014, from http://www.womenshealthmag.com/files/mediakit/WH-MediaKit-OnlineAdSpecs.
Yoga Directory: Pricing. (2014, January 1). Retrieved November 11, 2014, from https://secure.
yogajournal.com/yjdirectory/pricing/
Yoga for the Special Child - The Sonia Sumar Method. (2014, January 1). Retrieved November 10, 2014, from http://www.specialyoga.com/
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