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Lululemon's ground-level business strategy

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The Latest
Wednesday, September 29, 2010

By Jacq Lacy

Athletic apparel company Lululemon’s marketing strategy includes cupcakes, camp outs, dances and running clubs. Last week it took the unusual step of organizing an overnight camp-out in upscale Bridgeport Village.

The company relies solely on social events, word of mouth and social media to get customers to its stores. It seems to work. Lululemon’s 2009 revenue grew by 28% over the year before. The company’s gross revenues for 2009 were about $453 million.

Lululemon, which was founded in 2000 in Vancouver, B.C., began business in Oregon five years ago with its Pearl District store. Last week the company demonstrated how its approach works with the opening of its new 3,000-square-foot store at Bridgeport Village in Tigard, a store that sprung from a Lake Oswego showroom that had opened in August 2009. A Bend showroom opened in April.

Lululemon’s strategy is to analyze a community by using a showroom where employees interact with consumers through fitness classes and events. Once the employees understand what consumers in the area want, and think they have a strong customer base, the company moves from a showroom to open a storefront.

The Lululemon vibe is similar to that of a church or a nightclub. The management transforms each retail store into a place where people can relax, be challenged, and achieve goals. For Lululemon, class participants become customers.

“We see ourselves as a community resource instead of a retailer,” said Shannon Kaiser, assistant store manager to the Bridgeport location.

The Lake Oswego showroom advertised events in its online calendar and on its Facebook page. After developing friendships over the past year, a grand opening camp out seemed like the right idea for the Lululemon community. It was the first of its kind in Lululemon history, said Carmen Ip, a regional community relations manager.

More than 35 people, invited online, arrived at the mall last week with tents and sleeping bags ready to get free Lululemon apparel and free yoga classes taught by local instructors. About 10 campers said that friends or family introduced them to the brand.

“We always have a large group for our store openings, mainly because we’ve already developed friendships in the community,” Ip said.

Campers participated in a “rock ’n’ roll yoga” session, received complimentary yoga mats and joined a sunrise yoga session instructed by Annie Mockford of Yesyoga, a Portland yoga studio.

“A lot of people may be intimidated to come into the yoga studio. Somehow it’s a bit easier to go to a free community class. It makes it easier to get that first try,” Mockford said.

Lululemon invites local yoga studios to teach free classes at the store, which introduces people to yoga and creates customers for Lululemon’s athletic clothing.

Those at the grand opening said they liked the practicality and durability of Lululemon, and said the high price tag was worth it.

“[My fiancé] has about 15 other pairs of pants that have gone unused now because she has her Lululemon ones,” Vanden Bos said.

The company operates 130 stores in Canada, Australia and the U.S., each with the freedom to design and implement Facebook pages and events specialized to that store’s community. The company plans to add 15 new stores and 40-45 new showrooms worldwide by the end of this year.

Jacq Lacy is an associate writer for Oregon Business magazine.

 

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Editor's Letter: Power Play

January-Powerbook 2015
Thursday, December 11, 2014

There’s a fascinating article in the December issue of the Harvard Business Review about a profound power shift taking place in business and society. It’s a long read, but the gist revolves around the tension between “old power” and “new power” as a driver of transformation. Here’s an excerpt:

Old power works like a currency. It is held by few. Once gained, it is jealously guarded, and the powerful have a substantial store of it to spend. It is closed, inaccessible, and leader-driven. It downloads, and it captures.

New power operates differently, like a current. It is made by many. It is open, participatory, and peer-driven. It uploads, and it distributes. Like water or electricity, it’s most forceful when it surges. The goal with new power is not to hoard it but to channel it.

The authors, Henry Timms and Jeremy Heimans, don’t necessarily favor one form of power over another but merely outline how power is transitioning, and how companies can take advantage of these changes to strengthen their positions in the marketplace. 

Our Powerbook issue might be viewed as a case study in the new-power transition. This annual book of lists provides information on leading businesses, nonprofits and universities in the state. Most of the featured companies are entrenched power players now pursuing more flexible and less hierarchical approaches to doing business. Law firms, for example, are adopting new technologies and fee structures to make legal services more accessible and affordable.

This month we also take a look at a controversial new U.S. Securities and Exchange Commission rule requiring public companies to disclose the median pay of workers, as well as the ratio between CEO and median-worker pay. 

Part of the 2010 Dodd-Frank financial reform law, the rule will compel public companies to be more open about employee compensation, with the assumption that greater transparency will improve corporate performance and, perhaps, help address one of the major challenges of our time: income inequality.

New power is not only about strategy and tactics, the Harvard Business Review authors say. “The ultimate questions are ethical. The big question is whether new power can genuinely serve the common good and confront society’s most intractable problems.”

That sounds like a call to arms. Or a New Year’s resolution. Old power or new, the goals are the same: to be a force for positive change in the world. Happy 2015!

— Linda


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