Lululemon finds success with like-minded buyers

by Nigel Hollis | November 14, 2018

To grow your brand, it must acquire more new buyers than it loses existing ones. Simple, right? Except trying to appeal to new buyers might risk putting off existing ones, and lead to a lack of clarity over what the brand stands for. Which is why brands often need to reach out to new users who share similar needs or mindset to the existing ones.

A brand’s marketing really needs to achieve two different goals. It needs to influence current shoppers – people who are in the market for its goods or services now – and it needs to influence people who might buy in future. Not everyone will be in the market for the brand at a specific point in time. Some of these potential buyers will not buy the brand this year, or even next year. While the obvious thing to do is focus on people with similar functional needs but sometimes it is more beneficial to focus on mindset instead.

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Take the example of Lululemon. The 19-years old brand originally designed for yoga practitioners and its first designs were for women. The brand grew rapidly as a result of its Sweat Collective brand ambassadors and positive word of mouth amongst yoga and fitness practitioners. After phenomenal growth for many years, that growth slowed between 2015 and 2017. When we measured Lululemon in BrandZ in the context of women’s apparel in Canada in 2016, the brand was seen as very different but not that salient or meaningful. To reignite its growth, Lululemon was going to have to reach out beyond existing yoga and fitness practitioners, and find a way to make its difference meaningful to more people.

People who share a common psychographic mindset with existing users will be more likely to value what the brand has to offer. The question was, how to connect with potentially disparate groups? The answer was to focus on the commonalities between yoga – with which Lululemon was strongly associated – and rap, surfing, art, music, and volleyball. The ‘This is Yoga’ campaign created by Virtue, Vice’s in-house agency was created to reach out and engage these new audiences.

The decision to invest in a multimedia campaign was a huge departure for a brand that had previously relied on grassroots marketing, but now it had to reach outside the yoga bubble to attract new users.  The brand invested in an integrated, multi-channel media campaign featuring TV and online video, out of home in key cities, in-store, and digital. A series of mini-documentaries were created to back up the campaign and made available on the brand’s social channels.

The ‘This Is Yoga’ campaign started 18 months ago and in 2018 the brand has regained its previous sales momentum. Overall revenue grew 25 percent versus a year ago and margin improved. Comparable sales grew a “staggering” 20 percent, double analyst’s expectations.

I believe Lululemon provides a successful example of a brand reaching out to new users without undermining existing user’s beliefs. But what do you think? Please share your thoughts.

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