The athleisure market is a jungle. Brands wrestling for dollars, rising inflation, economic uncertainty—it’s a brawl out there. Yet, against all odds, lululemon is winning big.
How big? Try a staggering $2.2 billion in revenue for Q1 2024.
Ever slipped into a pair of lululemon leggings and thought, “Damn, these are comfy… but $100+ comfy?!”
Yeah, me too. 🤯
But here’s the thing: lululemon isn’t just selling overpriced yoga pants; It’s not just your average yoga pants anyways. They’ve built a freakin’ empire by understanding their customers better than their customers understand themselves.
(And maybe by using some kind of super-soft, mind-control fabric… but mostly the first thing.)
Why lululemon is Successful: The Not-So-Secret Sauce
Let’s be real, athleisure is everywhere. But Lululemon was one of the OGs, way before we all started living in yoga pants.
So how did they go from a single store in Vancouver to a global brand worth billions?
✨ Magic?
🧘♀️ The power of yoga?
❌ Nope. Strategic brilliance, my friend.
First off, lululemon’s products are like a second skin. Exclusive fabrics? Check. Comfort? Double check. These guys are all about the customer experience and building groups of sweat-loving enthusiasts.
But wait, there’s more! What’s really given them the edge? Specialist yoga wear, brand positioning, top-notch quality, a killer digital presence, and a crew of hardcore loyal customers. Boom!
The Genesis of lululemon
Founded in 1998 by Chip Wilson in Vancouver, lululemon started with yoga wear for women. By day, it was a retail store; by night, a yoga studio. And now? More fitness activities crammed in like CrossFit, boxing, strength circuits—you name it.
From yoga wear for women, they’ve branched out to men’s activewear too. Running, tennis, cycling—they’ve got it all. They’ve even dabbled in personal care products, accessories like yoga mats, and more.
Remember ivivva athletica? Their line for 6-12-year-olds? It got an A+ from parents, but lululemon shut it down in early 2020. Why? To “unlock capacity to support long-term growth,” said Celeste Burgoyne, lululemon’s executive vice president of Americas and global guest innovation.
As of 2024, lululemon boasts about 38,000 employees and over 700 stores. Canada, the U.S., Tokyo, Australia, China, the U.K.—they’re all over, now, everyone knows lululemon. With their high-quality, customer-centric approach, they’ve earned their spot in the global athleisure hall of fame.
What Makes lululemon Unique?
In a word? Quality. Their products are born out of rigorous research, innovation, and a relentless focus on meeting customer needs. Stylish? Check. Comfortable? You bet. And these aren’t just for fitness fanatics. You’ll see people rocking lululemon at meetings, grocery stores, even on dates.
The diversification of the brand has presented more competitive advantages to lululemon including a broader market base and increased brand recognition, enabling the company to carve a niche for itself as a premium athleisure brand.
lululemon’s competitive advantages and sales strategies have aided its consistent revenue growth. The company recorded an increase from its previous revenue of $8.1 billion in 2022 to $9.6 billion in 2023, representing a year-over-year increase of 19%. Versatility is their middle name, adding more muscle to their competitive advantages.
The Competitive Strategy of lululemon
For lululemon to gain a competitive advantage over its competitors in the activewear and athleisure industry, the company has implemented certain strategies that are commonly referred to as competitive strategies.
The concept of a competitive strategy was formulated by Michael Porter in his book, Competitive Strategy: Techniques for Analyzing Industries and Competitors where he discussed 3 distinct strategies that businesses could use to distinguish themselves from competitors.
These competitive strategies include
- Cost leadership
- Differentiation
- Focus
High revenue isn’t magic; it’s strategy. lululemon uses differentiation and focus competitive strategies to stand out in the industry and offer high-quality products to a specific consumer demographic.
lululemon’s Differentiation Strategy
It’s all about being different. Transparent yoga pants? lululemon said, “Hold my mat.” They created yoga pants that are thicker and comfy. They listen to customer feedback like it’s gospel, turning sweat into gold.
By implementing consumer feedback into product development and improvement, lululemon further catches the attention of consumers by creating the exact kinds of products they want. High-quality, sweat-absorbing, long-lasting— lululemon breathes life into athleisure.
Focus Strategy of lululemon
Niching down? They’ve nailed it. Initially targeting women yogis, they now cater to men too. Their demographic? Fitness junkies aged 18 to 35 from the middle or upper class. Premium pricing, baby. They are the Rolls-Royce of yoga pants!
lululemon Competitive Advantages
- Wellbeing Initiatives
- Specialization in Yoga Wear and Equipment
- Creating Athleisure Wear
- Quality You Can Feel (And a Price Tag to Match)
- Exclusive Clothing Materials: Innovation that doesn’t Quit
- Robust Digital Presence
- Consumer Loyalty
- Brand Recognition
Wellbeing Initiatives
lululemon takes care of its own. With initiatives for their workers and community, they’re making the world a better place. Mindfulness, self-care tools, impact projects—they’re doing it all.
The brand recognizes the important role of workers and has created the Maker Wellbeing initiatives, which aids people within their manufacturing supply chain to facilitate impact projects in the communities where they live and work.
The workforce of any company is the glue that holds things together and ensures overall business success in the long run. If you think about some of the top brands you patronize, chances are that quality customer service is one of the top reasons why you patronize them. Who makes that possible? The workforce of course.
The effectiveness of lululemon store employees who they refer to as educators play a crucial role in building consumer loyalty. This is because they offer meaningful guides to consumers to help them choose the right outfits to get the best result for the particular fitness activity they want to engage in.
It is common knowledge that human beings are inherently social beings that thrive in a community of like minds, lululemon is well aware of this and supports various community initiatives geared at sustaining communal well-being.
lululemon’s commitment to the overall well-being of individuals goes far beyond that of its workers and consumers but extends to marginalized communities and humanitarian workers with various laudable initiatives that cater to their overall well-being in the form of mindfulness and self-care tools, impact projects, and grants.
All these initiatives are summed up under the lululemon Center for Social Impact where the brand aims to ensure more individuals achieve overall well-being by attaining mental, physical, and social well-being.
For instance, the brand partnered with the United Nations Foundation through the Peace for Purpose initiative to provide mindfulness and self-care tools for the physical and mental health of thousands of UN workers. They have also partnered with the Obama Foundation to empower adolescent girls around the world through education
lululemon is committed to wellbeing so much that the brand supports research and advocacy geared at examining barriers to wellbeing and amplifying collaborative solutions. They have committed $1 million to NAMI (National Alliance for Mental Illness) in support of the establishment of a quick service number (988) for mental health crisis and suicide prevention.
All these well-being initiatives are a big competitive advantage for lululemon not only because of their novelty but due to the level of impact they have had on individuals. It serves as a lighthouse pointing to individuals that lululemon is committed to the overall well-being of not only their workers and consumers but as many people as their initiatives can cater to.
Specialization in Yoga Wear and Equipment
In 1998 when Lululemon was established, yoga was not as popular as it is today. However, the brand’s founder, Chip Wilson noticed that his yoga class grew from having only 6 students to having 30 students within just one month. This, coupled with a lack of dedicated yoga apparel led to the creation of the brand that became known as a premium provider of high-quality and comfortable yoga pants.
lululemon’s dedicated team of designers who also happen to be fitness enthusiasts were able to come up with a unique pant that was thick enough to accommodate an extensive level of stretching without becoming sheer. The yoga pants are also created from a special material, Luon, which is lightweight, can wick away sweat from the body, dry quickly, reduce bacteria-causing odors, and feel great on the skin.
These combined features made lululemon yoga pants the go-to brand for yogists who were looking for pants that made their yoga classes more comfortable by helping them achieve challenging poses without having to worry about their pants becoming sheer or uncomfortable. The brand also makes other items that are useful for yogis such as headbands and yoga mats.
lululemon stores are also used as spaces for yoga classes in the evenings at the close of business for the day. The brand’s concentration on a specific fitness activity and its specialization in the creation of comfortable apparel for female yogis distinguished it in the market.
Before lululemon came on board, most popular activewear brands like Adidas and Puma had active wear for several sporting activities and were centered on making products for men. This made it pretty easy for lululemon to dominate the yoga market due to their creation and sale of yoga wear which has been engineered to achieve maximum performance for female yogists. lululemon yoga pants have become the gold standard.
Creating Athleisure Wears
Athleisure trends are a thing, and lululemon is riding that wave. They can clothe you from the gym to the office and beyond. Little wonder the brand was named as the official outfitter of Team Canada.
This means lululemon will clothe the athletes that will represent Canada in both the Olympic and Paralympic games beginning with the Olympic and Paralympic Winter Games held in Beijing in 2022. The multi-year partnership will span through the subsequent summer and winter games in Paris, 2024 (currently ongoing), Milan 2026, and ending after the Los Angeles 2028 games.
As more people get concerned about keeping fit, pursuing a healthy lifestyle, and achieving a better balance between fitness, work, and leisure; the athleisure industry continues to boom and lululemon has gained a competitive advantage by creating apparel that can easily be used both for athletics and leisure.
For instance, due to the fashionable design of lululemon’s yoga pants and its high-quality fabric, it has been commonly used by women outside the gym as a statement of their fashion sense as well as a symbol of their high social class.
Another example of how lululemon has been able to break through in the athleisure industry is through the creation of bras that could be used both for workouts and as regular undergarments.
Before this, most women struggled with having different sets of bras for the gym and for other activities. It wasn’t thought possible to go straight to the gym from work without having a change of bras.
lululemon solved this problem through its bras made from light ultralu. The bra had a feel of not being there when worn and perfectly suited both high-intensity activities and rigorous workouts as well as leisure.
Aside from apparel for women, lululemon has diversified its product offerings to capture men, thereby expanding its market share in the athleisure industry. The company now sells several male apparel including trousers, button-down shirts, coats, sweatshirts, joggers, polo shirts, and jackets.
Due to the diversity of products and the possibility of using them both for workouts and other activities, lululemon’s competitive advantage in the athleisure industry is unmatched as more people say yes to the brand’s products.
Quality You Can Feel (And a Price Tag to Match)
Let’s face it, Lululemon stuff ain’t cheap. But they’ve convinced millions that it’s worth it. How? By obsessing over quality. Their fabrics are buttery soft, their designs are flattering (seriously, who needs to see my muffin top?), and their gear is built to last.
lululemon implements several strategies to maintain the quality of its products. One is the strong business relationships the brand has developed with its raw material suppliers and product manufacturers.
Although the brand collaborates with several suppliers and manufacturers for its fabrics and the mass production of its merchandise, they have been able to ensure consistency in fabric and product quality through stringent monitoring and standardized quality benchmarks which it achieves in partnership with independent inspection, verification, and testing companies.
Another strategy that has aided in maintaining the quality of lululemon’s products is the fact that all the stores that sell them are owned and directly operated by the brand or through its strategic sales partners. Because of this, counterfeiting lululemon products has been easily tackled. It additionally creates a certain level of product scarcity which drives demand.
Sure, you could probably find cheaper yoga pants elsewhere. But would they make you feel like a million bucks? lululemon understands the power of aspiration. They’ve positioned themselves as a premium brand, and their pricing reflects that. And guess what? It works.
Exclusive Clothing Materials: Innovation that Doesn’t Quit
The use of exclusive clothing materials in the products sold by lululemon is one of the brand’s biggest competitive advantages. Through the company’s innovation and research hubs (Whitespace) in Vancouver, Canada, and New York, United States, the company comes up with unique fabric and clothing designs. These fabrics and designs are then produced in large quantities by its raw material suppliers and manufacturers.
The brand has maintained its vast exclusive fabric supply by having several patents to protect the fabric blends it develops. They also have patents to protect their designs. Currently, in 2024, lululemon has over 650 active patents in 15 countries including Canada, the United States, China, Australia, and the United Kingdom.
Patented materials for the win! lululemon’s exclusive fabrics mean they’re always one step ahead of their competitors. Smart move! In most countries, patents may last up to 20 years from the day they are granted. This gives lululemon ample opportunity to financially benefit from their products because they have exclusive rights over all fabrics and designs that they patent.
What’s more? The fabrics or design may become obsolete by the time the patents expire which means other brands cannot benefit from them. To continue enjoying the competitive advantage granted by patents, lululemon consistently researches to enable them to develop newer fabric blends that they can patent.
The Further initiative is one of the most recent moves by the brand to better understand how the right apparel can support the performance and resilience of runners.
The creation of novel products that are patented by the brand continues to provide a competitive advantage for lululemon since customers will continually be on the lookout for new products from the brand.
Below is a table outlining some of lululemon’s exclusive fabrics, their features, and the products made from them.
| Fabric | Features | Product |
|---|---|---|
| Boolux | A blend of rayon derived from bamboo, tencel, and cashmere. The fabric is lightweight, warm, soft and breathable. | Sweaters |
| Coolmax | High-rise tights, polo shirts, tank tops, armbands, and tennis dresses. | Bras, shorts, and shirts. |
| Everlux | Quick drying, soft, stretchy, and sweat-wicking. | Tank tops, shorts, bras, tights, cropped pants, and short & long leggings. |
| Light Ultralu | Breathable, lightweight, sweat-wicking. | Bras |
| Luon | Stretchy, breathable, and lightweight. Other variants include the Seriously Light Luon, Light Luon, and Full-on Luon. | Yoga pants, leggings, tank tops, body suits, jackets, and shirts. |
| Luxtreme | Sweat-wicking, stretchy, provides support, and feels like a second skin. | Tights, bras, and pants. |
| Nulu | Lightweight and stretchy | Cropped jackets, bras, high-rise pants, and tank tops. |
| Nulux | Smooth and soft against the skin, lightening-fast drying, silky and cool-to-the-touch, and lightweight. | High-rise tights, polo shirts, tank tops, armbands, and tennis dresses. |
| Silverescent | Anti-bacterial and anti-stink due to the embedded pure silver in the fabric | High-rise tights, polo shirts, tank tops, armbands, and tennis dresses. |
| Swift | Lightweight, strong, stretchy, water-repellent, and sweat-wicking. Other variants include Swift Ultra and Swift Ultra Light. | Shorts, leggings, skirts, rompers, zip-up sweatshirts, and jackets. |
| Tencel | Smooth and supple surface, fast moisture release, lightweight, and naturally breathable with good sweat absorption. | Cardigans, jackets, tank tops, leggings, and pullovers. |
| Vitasea | Made from seaweed and blended with cotton and spandex. Ultra-soft fabric that retains its shape and stays soft long after you wash it. | T-shirts and tank tops. |
| Warpstreme | High shape retention, lightweight, and sweat-wicking | Pants and joggers |
lululemon were the first athleisure brand to introduce technical fabrics that wick away sweat, designs for specific activities, and even pants with pockets! (Revolutionary, I know.)
They constantly innovate, introducing new styles, colors, and technologies to keep their customers (and their wallets) coming back for more. This is another competitive advantage for lululemon.
Robust Digital Presence
The competitive advantage of lululemon through its robust digital presence is enormous. Its online game is on point; from a smooth shopping experience to killer social media campaigns, they’re nailing it.
The company’s website offers customers an easy and seamless option of shopping for their favorite lululemon products from the comfort of their homes, offices, or while on the move. This eliminates the stress of going to the stores and spending countless hours to check out merchandise.
The brand also utilizes various social media platforms such as Facebook and Instagram to engage its consumers, answer questions, make announcements, and reveal new products. lululemon is known to respond promptly to customer queries through its social media pages. They also offer quick resolutions to any challenge customers share through social media.
Additionally, the brand has created various social media campaigns such as #sweatlife which enables its consumers to share their experiences with the brand on social media. This is equally beneficial to the brand as it increases brand awareness and serves as a means of marketing for lululemon and its products.
lululemon’s effective use of digital media is closely linked to its adoption and implementation of AI technology to offer tailored suggestions, enhance search functionality, and improve customer engagement and satisfaction.
Consumer Loyalty
Loyal customers? lululemon has them in spades. From community events to engaging experiences, they keep those loyalty flames burning bright.
Since the company’s inception in 1998, the brand has focused on selling products to individuals and building lasting relationships with them through various engaging and community-based initiatives.
For instance, the brand’s stores are usually converted to yoga studios in the evenings to allow customers to connect with each other. They also initiate and host various fitness and mental-health-related events to educate their customers concerning these issues.
By investing in immersive experiences, such as their experiential stores and community events, lululemon showcases its focus on building a loyal customer base beyond just selling apparel. As they create a sense of belonging and foster a strong community, lululemon strengthens its brand affinity which in turn drives consumer loyalty.
lululemon’s commitment to improving existing designs and creating new ones is another factor that encourages consumer loyalty. Usually, the company utilizes feedback from customers when improving existing designs or creating new ones. This increases consumer loyalty to the brand because they feel that their input matters in the company’s processes.
The brand’s commitment to hosting various fitness and charity initiatives also builds a strong community of loyal followers who want to be part of the driving force in making people more aware and get involved in keeping fit and prioritizing a healthy lifestyle spurred by lululemon.
Some large-scale events hosted by lululemon that accentuate their commitment to consumers include This Is Yoga, and the SeaWheeze Half Marathon and Sunset Festival.
Through the company’s influencer and ambassadorial programs, they partner with various professionals in diverse fields such as running, yoga, tennis, and swimming. These professionals often offer free training and sessions at Lululemon events. They also serve as catalysts, encouraging their fans and followers to patronize the brand.
Brand Recognition
As the market base of lululemon continues to expand and as they garner goodwill through their laudable community projects, their brand recognition has continued to soar, earning them the competitive advantage of being highly recognized across the globe. The brand leverages this brand recognition in its relationship with suppliers, manufacturers, and consumers.
Both the suppliers and manufacturers work side-by-side with the brand to ensure that they supply and manufacture the right products for the company to maintain their patronage. This enhances brand recognition as both their fabrics and designs are unique.
Consumers also want to be associated with lululemon because the brand has positioned itself as a retailer of high-quality athleisure apparel and accessories. The brand’s community initiatives are another rallying point for customers. These give consumers a sense of being part of an elite group of athletes.
lululemon’s unwavering support towards sustainability initiatives, well-being, equity, and inclusivity additionally grants them more brand recognition as they partner with various relevant and reputable organizations in these fields. All these combined give lululemon a competitive advantage which is driven by its unique brand recognition.
What You Can Steal from lululemon’s Playbook
Unless you’re in the business of selling super-comfy activewear (in which case, good luck competing with these guys!), there are still valuable lessons to be learned from lululemon’s success.
- Build a Community, Not Just a Customer Base: People buy from people they trust. Create a community around your brand. Offer valuable content, host events, and give your customers a reason to connect with each other.
- Don’t Be Afraid to Charge What You’re Worth: If you’re offering a premium product or service, don’t be afraid to price it accordingly. Value over discounts, always.
- Innovate or Die (Seriously): The market is constantly changing. Stay ahead of the curve by innovating and adapting to your customers’ evolving needs.
- Collaborate: lululemon understands that a jack of all trades masters none, you should know that too and collaborate with the right folks.
Takeaways
The takeaway? Be like lululemon. Okay, maybe not exactly like them (unless you’ve got a thing for stretchy pants and green juice). But embrace customer-centric product development, create impactful initiatives, make it easy for customers, maintain top-notch quality, and partner with the right folks.
That’s how you create a brand that people love and are willing to pay a premium for. It’s also how to dominate any industry.
lululemon’s mix of differentiation and focus keeps them ahead of the pack, standing tall as a premium athleisure brand with unbeatable style and substance.
Now that you’ve learned all this, go forth and conquer, my friend!
