Swimwear for Lululemon
Jordan Dabney, Ardeen Samuel, Makayla Hirst, Paige Cheshier FASM 215
Table of Contents Executive Summary.............................................................................1 History......................................................................................................3 Mission Statement................................................................................5 Manifesto.................................................................................................5 Current Ownership...............................................................................6 Current Revenue....................................................................................6 Fiscal Year.................................................................................................7 Target Customer.....................................................................................8 Future Growth Plans.............................................................................9 SWOT Analysis.......................................................................................11 Current Position in the Market.........................................................12 Current Placement...............................................................................14 Promotional Activities........................................................................15 Size of the Market................................................................................20 Target Consumer .................................................................................22 Swimwear Lineup.................................................................................24 Swimwear Moodboard.......................................................................26 Product Strategy...................................................................................28 Pricing Strategy.....................................................................................28 Flats...........................................................................................................31 Placement Strategy..............................................................................33 Promotion Strategy..............................................................................34 Conclusion..............................................................................................35 Bibliography...........................................................................................36 Appendix.................................................................................................37
Executive Summary
As a group we were given the task of creating a brand
extension for a company of our choice, our only guideline was that it was not to be an existing extension within the brand. We decided that we wanted to do swimwear for Lululemon. In creating this extension our aims are to create swimwear that is functional yet fashionable, to expand globally and to maintain our current customers as well as gain new ones. In addition, we would also like to launch a successful line, which isn’t just seasonal, and create a sustainable product for our customer while positively influencing them to live a happy and healthy life.
Finally, our key success factors include creating a
successful relationship with suppliers and secure finance so the company is able to expand beyond the existing communities. Lululemon is a company where fabric is possibly the most important aspect of design. If we can create a relationship with new suppliers who can give us great quality and maintain if not better the company it will benefit not just us but them also.
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Executive Summary Currently the company focuses on community to expand their growth, we want to keep our current customers happy by having them still be an ambassador for the brand. However, we want to open this up to a broader audience and influence them to live healthier lives and experience what the company has to offer. Expanding also gives us a chance to reach out financially to investors and show everything we did as a small community based company and how successful we are and show them we are ready to grow and go beyond what we have been doing.
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History Chip Wilson
founded Lululemon in
1998. In 2003, Lululemon was named most “Innovative Retailer of the Year� (Time Toast). Lululemon started moving past the Canadian border in 2004 (Time Toast). The first stored opened in Ottawa, Canada in 2004 as well (Time Toast). In 2005, Lululemon finally opened a store in Japan (Time Toast). Lululemon hired Robert Meers in 2006, the new CEO (Time Toast). July 27, 2007, Lululemon became a public company (Time Toast). In 2008 Christine Day took over Robert Meers position (Time Toast). There were 87 stores worldwide before Christine Day joined and now there are 254 stores (One Source, Corporate Overview).
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History Lululemon stores are located in the US, Canada, Australia, and New Zealand (One Source, Lululemon Financial and Strategic Analysis Review). In 2009 they started an online store (Time Toast). In the first quarter they generated 15.6% of sales on the web, which was an increase of 40% from the same period a year earlier (One Source, Annual Report). In 2009 Lululemon also created a childrens store targeting children six to twelve years old (Time Toast). On February 3, 2013, Lululemon’s branded apparel was principally sold through 211 stores located in Canada, the US, Australia and New Zealand (One Source, Lululemon Financial and Strategic Analysis Review). In 2013, Christine Day stepped down from CEO after the Yoga Pant recall (Time Toast).
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Mission Statement “Creating components for people to live longer, healthier, fun lives” (Lululemon).
Manifesto
“We are passionate about sweating
every day and we want the world to know it. Breathing deeply, drinking water and getting outside also top the list of things we can’t live without. Get to know our manifesto and learn a little more about what lights our fire” (Luluemon).
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Current Ownership
After Chip Wilson quit Lululemon, Elana Liberman took
over and now currently owns Lululemon (One Source). Lululemon is also publicly traded by NASDAQ.
Current Revenue
Lululemon’s revenue is US $1,591.2 million for the fiscal
year that ended February 2014 (FY2014). That is a 16.1% increase over FY2013 (GlobalData).
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Fiscal Year
“Our fiscal year ends on the Sunday closet to January 31 of
the following year, typically resulting in a 52 week year, but occasionally giving rise to an additional week, resulting in a 53 week year. Fiscal 2012, which ended on February 3, 2013, was a 53-week year. Fiscal 2013, which ended on February 2, 2014, is a 52-week year” (One Source, Annual Report).
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Target Customer
“Our primary target customer is a sophisticated and educated woman who understands the importance of an active, healthy lifestyle. She is increasingly tasked with the dual responsibilities of career and family and is constantly challenged to balance her work, life and health. We believe she pursues exercise to achieve physical fitness and inner peace� (One Source, Annual Report).
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Future Growth Plans •
Grow our Store Base in North America- Lululemon is
planning to open up to 39 new stores in North America. •
Expand Beyond North America- Lululemon plans to have
two new stores in fiscal 2014 in Australia and two other stores internationally in fiscal 2014. Over the next two years they intend to open additional showrooms as pre-seeding activities in the Asian and European Markets. •
Develop our Direct to Consumer Sales Channel- They
plan to continue developing the e-commerce website to provide a distinctive online shopping experience and extend reach. •
Increase our Brand Awareness- Increase brand awareness
and customer loyalty through brand stories and grassroots marketing efforts, social media, and planned store expansion.
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Future Growth Plans •
Introduce New Product Technologies- Developing fabrics
to provide advance performance features such as UV protection and inherent reflectivity. •
Broaden the Appeal of our Products
o Expand our Product Categories- Expand product
offer ings such as swim, tennis, and golf.
o Increase the Range of Athletic Activities our Products
Target- More than just yoga, running, and general fitness.
o Grow our Men’s Business- opportunity to expand
men’s business
o Develop our Youth Brand- designed for female youth
serve an open market and provide us with an
opportunity for future growth.
(Future Growth Plans found on One Source, Annual Report)
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SWOT Analysis
(Graph adapted from GlobalData)
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Current Position in the Market
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Current Position in the Market
As a result of an in-depth investigation of current
competitors against Lululemon, we created a Perceptual Map to analyze each retailer’s standing within the market space. As a result of charting both current and future competitors upon crossing into the swimwear sector, we have determined our strongest opponents as well as our weaker ones who still pose a threat to the company. Currently, we have evaluated that Nike is our closest competitor while Bebe Sport and Gap Fit fall at the end of the pack. Lululemon and Nike occupy a close space as they both rank within a higher price point however they still specialize in being performance driven. As the company looks forward and becomes a key player in the swimwear market, we feel strongly that the closest competitor will be LolÍ as they offer consumers both athletic swimwear as well as resort options just as our line is scheduled to be comprised of.
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Current Placement
Lululemon has distribution facilities in Vancouver, British
Columbia, Sumner, Washington, and Melbourne, Victoria. Lululemon has a vertical retail strategy so they manufacture what they sell. It allows them to gather more feedback from customers and provides greater control over its brand (One Source, Annual Report).
Direct to Consumer:
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•
2009 Lululemon launched an e-commerce website that
makes up their direct to consumer channel
•
Represented 16.5% of their net revenue in fiscal 2013
•
Believe it is convenient for their core customer
•
Enhances image of brand
•
Builds brand awareness
•
Makes product accessible to more markets
Current Placement Wholesale Channel: •
Lululemon Athletica products are also sold through
premium yoga studios, health clubs and fitness centers
•
Represented 1.4% of their net revenue in fiscal 2013
•
Offer alternative distribution channel
•
Enhances the image of the brand
•
Build brand awareness
(Current Placement found in One Source, Annual Report)
Promotional Activities
“The company has made a point to not advertise in
traditional media like print; instead, their growth has relied on word-of-mouth and grassroots efforts to spread their brand message” (Slide Share, Lululemon MBA Marketing Plan).
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Promotional Activities
Lululemon relies on social media such as Facebook, Twitter,
YouTube, Flickr, Foursquare, Tumblr, Instagram and Pinterest. They also rely on special events.
In some Lululemon locations they have a free yoga class
once a week, and sometimes Lululemon staff will go teach at local yoga studios. “Each Lululemon location is responsible for marketing and building a reputation in their local community, making it very decentralized approach. Lululemon’s corporate headquarters does not even have a marketing division; instead it only has a community relations department” (Slide Share, Lululemon MBA Marketing Plan.)
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Promotional Activities •
Partnering with local health food stores to offer a healthy,
fresh in-store breakfast to customers before a morning run
or yoga class
•
Organizing a picnic in the park event featuring an outdoor
yoga class and light refreshments
•
In-store fashion shows, where employees can model and
display the latest Lululemon apparel
•
Lululemon app
(Promotional Activities found on Slide Share)
In 2013, Lululemon spent a total of $410,106.00 on adver-
tising (Annual Measured U.S. Media Spend, Redbooks).
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Promotional Activities
(Graph from Redbooks)
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Promotional Activities In-store fashion show
Lululemon Instagram
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Size of the Market •
Swimwear experienced 8% current value growth in 2013
•
Sales of swimwear volume in 2013= 195.4 units
•
Sales of swimwear value in 2013= $3,465.2 Million
•
Sales of swimwear volume growth in 2013= 24.6%
•
Sales of swimwear value in 2013= 29.5%
(Size of the Market found in Passport Womenswear in the US, Euromonitor International)
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Size of the Market Key Players •
L Space
• Lululemon
•
Trina Turk
• Talulah
• ViX
• Athleta
•
La Blanca
• Lole
•
Body Glove
•
Victoria’s Secret Swim
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Target Consumer Demographic Segmentation: Gender: Women Age: 20-50 Income: $50,000+ Education: College education and post-graduate degrees Lifestyle/Psychographic/ Behavioral Segmentations: • Generation Y • Savannah, GA • Teacher • Yoga • Aquatic Activities • Walking in the park/beach • Loves reading • Self aware • Natural • Wants quality, longevity over fast fashion (Adapted from One Source, Annual Report)
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Target Consumer Demographic Segmentation: Gender: Women Age: 20-50 Income: $70,000+ Education: College education and post-graduate degrees Lifestyle/Psychographic/ Behavioral Segmentations: • Generation Y • New York City • Fashion Publication • Fast-paced • Self aware • Brand conscious • Natural • Appreciates quality • Running (Adapted from One Source, Annual Report)
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Swimwear Lineup
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Swimwear Lineup
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Swimwear Moodboard
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5Ps
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Product Strategy
We chose to design the swimsuits as shown because we
really feel like it fits the aesthetic of Lululemon. They are functional yet fashionable. We chose black and white stripes because we found that Lululemon uses a lot of stripes but we also put in little pops of color. We kept the bathing suit tops similar to the sports bras so we know they would have support.
Pricing Strategy
We chose to stay within Lululemon’s price range by
researching competitors’ products of a similar nature. As a result of the findings shown on the Perceptual Map, we strategically based our pricing research to focus on a company that ranked one step above our company in addition to one step below. This strategy was formulated to ensure that the swimwear pricing fell in the middle of these two to be concise with Lululemon’s current standing within the market space. In keeping with the Lululemon strategy, we compared the price points based on their current selection of sports bras and active shorts.
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Pricing Strategy Top: $52 Bottom: $50
One piece: $98
One piece: $80
Top: $60 Bottom: $62
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Pricing Strategy Top: $52 Bottom: $58
Top: $50 Bottom: $48
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Top: $58 Bottom: $50
Rashgaurd: $98
Flats
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Flats
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Placement Strategy Direct to Consumer: We are choosing to launch our swimwear line in three locations. The locations are the Santa Monica flagship, The Gardens Mall in West Palm Beach, Florida, and Ala Moana Center in Honolulu, Hawaii. We chose Santa Monica because it is the only flagship store in the US. We chose West Palm Beach and Honolulu because they are near the water and upscale areas that target our specific market. E-Commerce: We are also choosing to launch online. We think it is a great idea at this day and age to launch swimwear online. It will be easier for a customer to get swimwear if there is not a Lululemon store located near them.
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Promotion Strategy
We will let our consumers know about our brand extension
through social media marketing. We will use Twitter, Facebook, Instagram, YouTube, and Tumblr. We will also do in-store fashion shows to showcase our new line of swimwear. We are choosing to do social media marketing because we are sticking to what Lululemon does already. Lululemon does in-store fashion shows which is what we will be doing as well.
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Conclusion
In conclusion, this brand extension, more than anything, is
a proposal of growth for the company. We think it would be a great thing for the company especially since some of their competitors carry swimwear as well as athletic wear. We can keep our current customers but also branch out and gain new customers as well. Lululemon will not just be for yoga, running, and cycling anymore, but for water and beach sports as well.
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Bibliography Apparel Retail in North America. Rep. Euromonitor International, Aug. 2014. Web.
Feb. 2015.
Financial and Strategic Analysis Review. Rep. One Source, 22 Jan. 2015. Web. Feb. 2015. “Google Images.” Google Images. N.p., n.d. Web. 04 Mar. 2015. Lululemon Store Finder. N.p., n.d. Web. 20 Feb. 2015. “Lululemon Athletica Inc. Annual Reports.” (2014): 1-99. One Source. 2014. Web.
Feb. 2015.
“Lululemon Athletica Inc., Lululemon Founder Chip Wilson and Advent Interna
tional Announce Stock Sale and Support Agreements.” Lululemon Athletica
Inc., Lululemon Founder Chip Wilson and Advent International Announce
Stock Sale and Support Agreements (NASDAQ:LULU). N.p., 07 Aug. 2014.
Web. 27 Feb. 2015.
“Lululemon Bras For All The Ways You Love To Sweat.” YouTube. YouTube, n.d. Web.
04 Mar. 2015.
“Lululemon MBA Marketing Plan.” Lululemon MBA Marketing Plan. N.p., n.d. Web.
27 Feb. 2015.
“Lululemon Summer’s Coming.” YouTube. YouTube, n.d. Web. 04 Mar. 2015. “Lululemon.” Timetoast. N.p., n.d. Web. 27 Feb. 2015. “Redbooks.” Redbooks, N.p., n.d. Web. 04 Mar. 2015 Womenswear in the US. Rep. Euromonitor International, July 2014. Web. Feb. 2015.
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Appendix
GlobalData
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Appendix
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Appendix
GlobalData
Euromonitor International
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Appendix
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Appendix
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Appendix
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Appendix
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Appendix
One Source
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Appendix
Perceptual Map numbers, Paige Cheshier
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