You may have read this story in The Wall Street Journal recently or seen some of the other media coverage about Lululemon. They reported that Lululemon Athletica was forced to pull one of its signature products, black yoga pants, from shelves to address a fabric quality issue. In yoga classes everywhere, loyal customers found themselves exposed in ways they had not intended.
As one of my favorite former-boutique brands, Lululemon has been in a recent period of rapid growth and makes a great timely case study on the importance of being prepared for this type of growth. Lululemon started in Canada as a high-end yoga apparel brand with a focus on community, quality and style. Over the last decade and a half, it has grown steadily. Recently, Lululemon went public, launching the high-end lifestyle brand into a whole new realm. Boutique brands, like Lululemon, often start out with slow and steady growth, then when rapid expansion hits, they are like a comet: bright but short-lived.
Most marketers see growth as completely positive – and rapid growth as the ultimate measure of success. But, as Lululemon has learned over the last week, growth can be a mixed blessing, especially if the brand isn’t fully prepared to handle the unintended consequences. To this point, Lululemon has managed its brand growth well, but it will be interesting to watch and see if the foundation it has laid (and the quick action it took) will allow Lululemon to overcome this embarrassing quality issue.
When entering periods of major growth, many companies can lose focus on what made them successful: their core customers, their historic brand positions and their preparation for new competition. As a marketer, you can influence all of these areas and, if you do it right, you help minimize many of the challenges brought about by growth.
YOUR CORE CUSTOMERS
Many boutique-brand customers, like Lululemon’s, thrive on a couple of things: feeling like they are “in the know” by supporting an exclusive brand and by being part of an exclusive community.
Lululemon has continued to leverage its community-focused attitude, one thing that helped make it successful, through the recent expansion. As it entered new markets and opened new locations, it turned its stores into warm, unique community centers where customers could learn and feel like they were “part of the brand,” not just shopping in a “chain store.“ Lululemon’s expansion has also taken its community-centric messaging to social media channels, where the brand has grown a significant online community.
High-end brands, in particular, can often suffer when they grow, because their customers lose that “I am special because I have/buy/experience” mentality that they once felt about the brand or product. It is important to think about different and unique ways to keep customers feeling this. In the case of Lululemon, it intentionally keeps its stock of unique items low, so customers can feel like they still own something “not everyone can have.” This can backfire and annoy customers, so there has to be the right balance.
A brand can also avoid customer frustration through clever marketing and a unique brand position. As brands grow, their customer bases will naturally change and expand. That is great news! The bad news is that new customers don’t really know about these brands yet. If done right, brands have the chance to form loyal new customers with a consistent message. The biggest mistake some companies make is assuming that new customers don’t need to be educated about what is special about their brand or product. As the adage goes, any PR is good PR, and hopefully new customers will remember Lululemon’s commitment to quality in their quick removal of bad product from the market in the yoga pant fabric debacle.
Similarly, a growing company has to build on-brand messaging into every touchpoint a new customer sees – from signage to advertising to the feel of the packaging. If a company is growing rapidly, that means it did something right. Periods of growth are the times to leverage and refine what’s right, not abandon it.
As Lululemon grew beyond just yoga, it maintained the sense that its brand was more than just great quality and cool styling; it was about the Lululemon lifestyle. It even has a “manifesto” embodying its brand that is plastered all over its stores, bags and even some products. New customers immediately know the heart of the brand, and now they also know their commitment to quality.
Finally, as brands grow, so does competition. With Lululemon, mass-market brands have created copycat products. Everyone from Gap to Target has products that look eerily familiar to the high-end line – at a much more attractive price point. This is why brand differentiation and a loyal customer base are so key. If those two things are not solid, copycats and smart competitors can start to eat away at market share.
I have observed Lululemon as a customer and know firsthand how it has not lost touch with its core customer through much of its season of growth. In the article mentioned earlier, The Wall Street Journal reported that the company “closely watches shoppers in its stores for signs of what is and isn’t catching on to get its products right.” Product quality issues are another matter entirely. Given how suggestive yoga poses and clothing can be, there may be no greater breach of trust for female consumers than causing them to feel exposed in public. Clearly, the national publicity from this product malfunction has become a moment of truth for the company. Lululemon’s rapid response of removing the product immediately was necessary and right. It remains to be seen whether the foundation their brand established will allow them to rise above their unintentional immodesty.
Lululemon announced that its top product executive is out after last month’s see-through yoga pants fiasco.
Michelle Hill, Account Executive at The Ramey Agency