Lululemon leading activewear trend through innovation

Lululemon stores perform well, even boosting the performance of other businesses around it.
BEN NELMS/REUTERS

Lululemon stores perform well, even boosting the performance of other businesses around it.

Love it or hate it, "athleisure" has become a formidable force in fashion and sportswear and the company that inspired it puts innovation first to stay on top.

Canadian athletic apparel company Lululemon is widely known as the leader in the athleisure, or "activewear", trend, where gym clothes are worn as everyday outfits.

Staying ahead of the curve required more than just good-looking clothes, though.

Lululemon senior vice president of innovation Tom Waller will be talking about Lululemon's innovation culture at the upcoming Better by Design CEO Summit, run by New Zealand Trade and Enterprise.

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Lululemon senior vice president of innovation Tom Waller will be speaking at the Better By Design CEO Summit in March.
SUPPLIED

Lululemon senior vice president of innovation Tom Waller will be speaking at the Better By Design CEO Summit in March.

In his talk in March, he wants to help audiences understand how a "human-first" approach to innovation can create exceptional value.

The company's Whitespace team is tasked solely with innovation and its workshop uses prototyping, environmental simulation, human performance assessment and materials testing in all stages of product design and development.

Customer-facing results of this includes its technical, sweat-wicking fabrics and its in-store pants wall.

Yoga classes are part and parcel of the Lululemon brand.
SUPPLIED

Yoga classes are part and parcel of the Lululemon brand.

The new pants wall was implemented in 2015 and organised pants based on "sensation" - "hugged", "naked", "relaxed", "tight" - rather than organising them from tightest to loosest.

According to the company's fourth quarter results last year, the new wall increased sales by 19 per cent from September 2015 to January 2016.

In 2016 Lululemon designed the Canadian men and women beach volleyball uniforms for the Rio Olympics, including fabric that was salt-resistant and protected skin against ultraviolet rays.

"Since day one, we have focused on creating progressive athletic apparel for our guests who we know lead active lives and are looking for gear that carries them seamlessly from day to night," Waller said.

"We believe our philosophy of enabling our guest to live a life they love and that will always keep us ahead of the curve."

There have been a few bumps in the road to the top. In 2013 Lululemon stocks fell 30 per cent following product recalls and comments that company founder Chip Wilson made in an interview with Bloomberg TV where he said some women's bodies "just don't actually work" for Lululemon's yoga pants.

Wilson's replacement Laurent Potdevin​ lifted sales by almost 30 per cent in two years, according to Forbes.

According to the company's third quarter fiscal 2016 results, its net revenue increased 13 per cent on the previous year to US$544m (NZ$758m) and gross profit increased by 24 per cent to US$278.4m.

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And there were more plans to grow.

Waller said the company was on track with a five-year plan to double revenue and more than double earnings, expanding its reach around the world.

But there was now market oversaturation and price points were being driven down, with discount and fast-fashion retailers - even McDonald's - producing their own "activewear" and selling them at cheaper prices (most of Lululemon's tights retail for between NZ$135-$165).

Bloomberg reported Morgan Stanley analyst Jay Sole sounded the alarm on fitness attire brand Under Armour last year, highlighting that declines in the average selling price of the company's products had become a six-quarter trend.

Soft sales in the fourth quarter were blamed on warm weather, but there was also a lack of "fashion component" that other brands offered.

According to First Retail Group managing director Chris Wilkinson, Lululemon will continue to thrive, dominating a market that was once led by brands like Nike and Adidas.

Wilkinson said Lululemon has created a brand that people desired and has achieved the "holy grail" for retailers: a strong depth of connection.

"Lululemon has done that through things like grabbing names [of customers] before going into changing rooms, having those free yoga sessions on Sunday mornings. It's all about the depth of connection.

"[People] desire to be part of the story."

 - Sunday Star Times

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