September 30, 2022

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Lululemon Bet Big on Digital Technology and Won, Here’s How

A true pioneer of athleisure, Lululemon Athletica has not only made yoga leggings a staple...

A true pioneer of athleisure, Lululemon Athletica has not only made yoga leggings a staple of women’s fashion, but also ushered in a new era of sportswear as day wear. By combining innovative product design with community-based “guerilla” marketing, Lululemon Athletica has set a new standard for experiential retail. 

At first glance Lululemon might seem incredibly vulnerable to the disruptions brought on by the COVID-19 pandemic. Not only is it primarily thought of as a brick & mortar retailer, it is also closely tied to the in-person fitness industry which was deeply upended amidst lockdowns.

However, not only did Lululemon survive the pandemic, it thrived. In fact, despite global lockdowns and supply chain challenges, the retailer increased its value by 40% in 2020.

To start, lockdown orders caused a surge in demand for the loungewear and athleisure products Lululemon specializes in. Secondly, due to a number of smart digital and strategic investments the company made in the years leading up to the pandemic, they were able to truly capitalize on this opportunity. 

 

Though Lululemon started as a brick & mortar retailer, by March 2020, it already had a strong online presence and e-commerce site. In addition, they had already invested in RFID technology which allowed them to essentially, temporarily convert stores to fulfillment centers. As a result, they were able quickly and easily accommodate the spike of online orders while also reducing the need to “flush out inventory.” 

In addition to existing digital assets, Lululemon also launched a number of new, digitally-enabled services designed to both protect and delight customers (as well as employees). For example:

  • Virtual waitlists that notified customers by text when it was their turn to enter the store eliminating the need for physical lines
  • New mobile point-of-sale systems that enabled transactions such as returns, exchanges and purchasing gift cards to occur just outside of the store
  • Buy online pick up in store and curbside pickup initiatives
  • Shopping by appointment before, during and after a store’s normal operating hours.
  • Virtual personal shopping guidance for customers that prefer to shop online but might require a little extra assistance

 

In June of 2020, Lululemon acquired the at-home fitness company Mirror. Seeing as though 70% of people who used online fitness programs during the pandemic plan to stick with them long-term, this investment seems likely to pay off. In addition, according to a recent article in RetailDive, Lululemon has filed a number of patents for wearables such as fitness belts that collect and transform biometric data into targeted exercise and wellness advice.  

Furthermore, the company announced the creation of it’s new Technology Hub this past April. Based in Bengaluru, this center of innovation, which will employ over 250 technologists by 2022, will support the development and implementation of Lululemon’s technical infrastructure. 

A Calvin McDonald, Chief Executive Officer, commented at the time, “Acquiring and nurturing best-in-class technologists is essential to our global growth strategy focused on product innovation, omni guest experiences, and market expansion. The opening of our India Technology Hub will help further our strategic growth plan with technology, enabling both our people and our guest experience as we expand to serve new guests across the globe.”

Like so many other companies out there, Lululemon is not only embracing digital technology, it may very well be looking to evolve into a “technology company” much like Casper, WeWork and Pampers. Regardless, investors seem optimistic about Lululemon’s future despite the many obstacles modern retailers face. 

 

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