4 Ways Lululemon Is Building Seamless Shopping
lululemon's Q2 2020
- Total net revenue increased 2% to $903 million, above expectations of high single-digits decline.
- Gross profit was $489.5 million, an increase of 1% compared to the second quarter of fiscal 2019.
- Digital saw a 157% constant dollar comp increase on top of the 31% increase last year.
Lululemon Athletica reported a better-than-expected second quarter as it built a seamless shopping experience for both store and e-commerce shoppers amid COVID-19 concerns.
Currently, the athletic apparel retailer has approximately 97% of its stores open globally and, on average, reopened stores are performing at 75% of last year’s volume. The retailer is still limiting capacity and operating on reduced hours in many locations.
Luluemon also operated just over 50 seasonal stores in its second quarter 2020, and it plans to increase that to 70 in the second half of the year, in markets where it has existing stores to help mitigate current capacity constraints.
“As we continue to operate and move through the COVID-19 environment, we are seeing a shift in behavior in terms of working from home, sweating from home and the increased importance of living an active and healthy lifestyle,” said CEO Calvin McDonald on its recent earnings call. “These trends play to our strengths and setup an opportunity for us to continue to innovate and gain market share.”
McDonald laid out four ways the retailer is building new “transactional omni capabilities” to ensure a quick and seamless shopping experience for both store and e-commerce shoppers.
- The apparel retailer has added curbside pickup to its buy-online-pickup-in-store (BOPIS) functionality.
- It has enabled a virtual waitlist so shoppers don’t have to wait in line to enter a store. The new function allows shoppers to be notified via text when it’s their turn to enter the store. In the month of August, lululemon had nearly 400,000 individual shoppers utilizing the virtual waitlist across nearly 280 locations where it has implemented the technology.
- Lululemon has continued to expand its number of “omni educators.” These associates receive special training enabling them to help shoppers both in-store and virtually through the guest education center.
- The retailers continues to offer digital educator and virtual concierge programs. McDonald said both initiatives continue to be well received.
“This innovation demonstrates our consistent ability to be agile and anticipate the evolving needs of our guests,” said McDonald. “We have also enabled omni sweat life capabilities to help our guests stay active both physically and digitally. Many of our ambassadors have been offering live streams on our social channels and we now offer digital content as part of our membership program in the cities where our tests are underway.”
The retailer spent approximately $53 million in Q2, compared to approximately $67 million in the second quarter of 2019, primarily on store capital for new locations, relocations and renovations technology spent to support business growth, digital channel and analytics capabilities, and supply chain investments.
Looking ahead, lululemon has pulled forward several IT investments related to its e-commerce business, increased its DC and fulfillment capabilities, and is continuing to grow its number of omni educators in case of an e-commerce spike in Q4.
Lululemon has also acquired in-home fitness platform provider Mirror, which sells a high-tech mirror to stream live workout classes, and said it expects MIRROR to generate more than $150 million in revenue for the full year 2020. That figure is up from its initial expectation, which was revenue of $100 million, but lululemeon is increasing marketing spend for MIRROR in the second half of the year to take advantage of current spending trends and drive business during the holiday season and into next year.