Lululemon Runs into Personalized Retail
Lululemon athletica is pushing harder into personalized retail with events, experiential stores, and increased digital capabilities—and said it’s “pleased” with the results.
To start, in its third quarter of 2019 the athletic apparel retailer launched new product display pages, both online and within its mobile app to provide more detail about products and educate shoppers about the unique attributes each style offers.
“Improving our search platform which makes search more relevant on an individualized basis, it moves us forward with personalization, enhancing our overall website performance and continuing to increase the breadth of our online assortment,” said CEO Calvin McDonald during the company’s earnings call.
Digital revenue grew 30% in constant currency terms in the quarter, on top of 46% growth in the same quarter a year earlier and growth of 25% two years ago. The retailer also has its buy-online-pickup-in-store (BOPIS) capabilities in nearly all North American stores for the entire quarter and saw approximately 20% of these shoppers are making an additional purchase when they come into the store to pick up their online order.
“We're excited with our guest engagement here and expect it only to grow in importance during the holiday season,” said McDonald.
luluemon opened its first “experiential store” in the Lincoln Park neighborhood of Chicago over the summer and according to McDonald the company “couldn’t be more pleased with the initial performance.” The store offers fitness classes, one of the keys to its experiential environment, and approximately one-third of luluemon loyalty members take the classes—over 90% of them for the first time.
“This quarter, we launched our membership test in Chicago and we're seeing a halo effect across the entire market,” he said. “It is the combination of these offerings that creates a unique experiential expression into loyalty. We hit our membership goal within one month and participation continues to include both new and existing guests.”
Building upon these learnings, luluemon opened second experiential store at Mall of America on November 20, adapted to the mall-based environment.
The 19,700 square foot, one-level location has separate entrances for mall access and studio services and offers the Gear Trial program, which launched at the Lincoln Park location and allows shoppers to experience key styles for rental in the studios. The store also offers events including immersive panel discussions about pertinent topics in the community, a thematic dinner series focused on bringing influential people to the table, a movie series showcasing unique stories, concerts, and workshops.
“We'll share more with you over the coming quarters, but we're pleased with the early performance of Mall of America,” said McDonald. “We're confident that as we invest in the experiential elements of our brand, we can enhance our guest engagement across the market.
Lululemon also sponsored its first U.S. race in San Diego last month, which sold out within 72 hours and had more than 5,000 runners participate.
“Beyond the four walls of our stores, guests are eager to participate in the events we create,” said McDonald. “Along with our experiential stores and our membership tests, our events allow guests to engage with us in ways that deepen loyalty beyond a simple in-store transaction.”