You never know when something is going to click. An out-of-the-way location on Queen Street (very) West of most of the action, turned into all the rage in a city, like Toronto, that was obviously craving one. My Wife, my Mother, you name it, had to take an extra hour or so to shlep out to this undersized, over-assorted hole-in-the-wall store that sold yoga inspired activewear. The fabric was nice, the fit was oustanding (especially on fit women), the colours appropriate and the prices high. A perfect storm erupted. This Vancouver based chain had barely 5 stores at the time, a very haphazard expansion strategy (territorial rights, internet rights and U.S. continental rights given out like gift with purchase schemes) and yet had hit on exactly what women were looking for.

This is barely 5 years ago. Today as a public company, it has a market capitalization of $2.2 billion. What the heck gives any more?

Most retailers are scraping and clawing, discounting and promoting to retain market share (let alone gain it!). Yoga inspired clothing has been around quite a while already with Danskin being the first and most popular (although coming out of the dance industry). Several others have been around just as long albeit more from a wholesaling standpoint with the exception of Portland based Lucy, which started on the web and then morphed into a bricks and mortar retail concept. What makes people go crazy for Lululemon as opposed to any other concept out there (maybe with the exception of Aritzia – from Vancouver also – and Buckle – from Nebraska of all places ?

It is hard to say and I have been at this a long time. The stores are not well merchandised and lack strong visual presentation. The product designs are quite nice and the colours and fabrics are rich but not overwhelmingly so. The staff seem nice and pleasant but not much different from the typical mall fare. The branding is not slick and is only promoted on a grass roots basis through yoga instructors, personal trainers and community initiatives. The pricing is premium so it doesn’t seem as accessible as it could be. So, what is it?

If you have any answers I would love to hear them but they have certainly created a large devoted following. They appeal to a range of ages and are even sprucing up their men’s assortment (which sorely needed it). They have opened as many as 60 stores now in Canada and the U.S. and are no means ubiquitous, which no doubt helps their productivities.

But if I were to think about it for a while, I believe there may be two main success factors: The logo identification is strong (a stylized horseshoe of sorts) and is strategically placed on each garment for maximum exposure without feeling you are a walking billboard (like you feel while wearing a Roots garment for example); and secondly, its approach within each community has resonated with its clientele. It has been subtle and supportive and they work hard at keeping their authenticity in tact, even as their market cap heads for the stratosphere. They have yet to advertise in any meaningful way and keep building their brand one fitness/yoga instructor at a time in each community in which they open a store.

It has been a wild ride since the private equity players invested in the concept almost three years ago. But their clientele could care less about those things. Their customer base only cares about whether they have the latest merchandise in their size and how good it looks on them. Word of mouth is any brand’s most effective means of marketing and communication.

These fitness buffs must also be expert socializers for the concept to be as popular as it is today. The gift of the gab has made Lululemon one of today’s most popular retail brands.

TheRetailTherapist šŸ™‚