Lululemon Geographical Expansion MA Final Project

Lululemon | Brazil

Shaniya Shabrach-Ortiz MA Final Project LXFM 749

“Elevating the world from mediocrity to greatness�

- Chip Wilson

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Table of Contents Abstract

4

In-store observations

44

Introduction

5

Focus Group

51

Company Overview

6

Interview

52

Mission/Vision

7

Key Takeaways

53

Current Status

8

Strategy

55

Distribution

9

Placement

56

Target Consumer

10

Moodboard

59

Customer Profiles

11

Product

60

Future Outlook

13

Price

62

SWOT Analysis

14

Floor Plan

63

Competition

16

Pop-up shop Renders

64

Perceptual Map

19

Human Resources

70

Price Accessibility Matrix

21

Promotion - Ambassadors

71

Merchandising Strategy

22

Launch Plan

72

Pricing Strategy

23

Pre Launch

74

Promotion Strategy

24

Launch Event

76

Market Research

26

Launch

78

Why Brazil

31

Post Launch

80

PESTLE Analysis

32

Measuring Success

82

Business in Brazil

39

Financial Plan

84

Rio de Janeiro

40

Conclusion

85

Direct/Indirect Competition

41

Biographical Statement

86

Consumers in Brazil

42

Works Cited

87

Primary Research

43

Appendix

94

Abstract The fitness industry is booming and globally has generated more than 80 billion in revenue. It has been increasing each year and shows no signs of slowing down anytime soon.

This has attracted not only numerous brands to the activewear market, but also consumers. Lululemon Athletica is one of the top companies who produce activewear.

This Canadian brand offers technical athletic apparel for yoga, running, training and most other “sweaty pursuits� (Lululemon Athletica). Most of their revenue comes from the North American market. However, there is vast room for expansion in the South American region. This project proposes a geographical expansion of Lululemon into the Brazilian market. This is an opportunity to test the South American market and raise awareness about Lululemon in Brazil. The proposal will be based on primary and secondary research collected on the brand, consumers, and the current market, as well as, an in-depth look at the overall stability of Brazil and key competitors. The report will conclude with my deliverables: a design branded retail space, distribution plan, IMC plan, assortment plan, an action plan, and the overall timeline of this project.

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Introduction Today there has been a widespread shift to a focus on health and fitness. Consumers are seeking active and more health-conscious lifestyles. By offering pieces that don’t compromise style and personal fashion, the activewear market is meeting those needs.

It has evolved from a trend and become more of a lifestyle. The demand for activewear is expected to continue growing strongly over the next few years and many brands have created their own lines to try to break into this growing market.

The project will target the ideal consumer based on the secondary and primary research and will give full insights into the consumer behavior and purchasing powers. It will deliver a well-researched proposal of a geographical expansion of Lululemon into the Brazilian market and also introduce a distribution plan and a design-branded retail space that will gain the attention of the Brazilian consumer and attract our target demographic. An IMC plan will be included to evaluate the marketing and communication strategy for Lululemon to help build awareness and enthusiasm during the pre-launch, launch, and post-launch.

Mockups of marketing collateral will be created to help to support the IMC plan.

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Company Overview “Lululemon was founded by Chip Wilson in Vancouver, Canada in 1998. It is a yoga-inspired, technical athletic apparel company for women and men” (Lululemon Athletica).

Chip was originally in the surf, skiing, and skatewear industry, but fell in love with yoga and saw an opportunity to bring more technical and performance-oriented products to the market. He used word of mouth as a way to raise brand awareness. He also sold his products inside yoga studios and recruited the instructors as ambassadors, which is something the company still does today. The first store opened in November of 2000, on West 4th Avenue, in Vancouver (Lululemon Athletica).

Before stepping down from his role as CEO in 2005, Wilson sold 48% of his company to Advent International and Highland Capital Partners, and by 2007 the company went public. Christine Day, who was the former co-president of Starbucks took over as CEO in 2008 only to resign in 2013.

That same year Wilson announced his resignation as chairman of the Lululemon board and Laurent Potdevin, the president of TOMS shoes, was appointed to CEO. Potdevin was with the company for 5 years but was forced to resign due to failure to meet Lululemon’s standards for integrity. Calvin McDonald, CEO of Sephora in the Americas, was appointed in August of 2018 and currently maintains the position (Sherman).

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At first, Lululemon solely focused on products for women to wear during yoga. Today they design for running, yoga, cycling, and training for both men and women. They also offer fitness-related accessories, including an array of items, such as bags, socks, underwear, yoga mats and water bottles. “Lululemon’s goal is to empower people to reach their full potential through providing the right tools and resources, and encouraging a culture of leadership, goal-setting, and personal responsibility” (Legacy West).

Lululemon promotes a set of core values in their business, which includes developing the highest quality products, operating with integrity, and leading a healthy balanced life.

Mission / Vision

Lululemon’s original vision was to be a “community hub to provide their guests with knowledge, tools, and the components for people to live longer, healthier and more fun lives” (Marati). However, as the company began to grow, they redirected their efforts to focus on staff development, particularly in goal-setting and personal responsibility. Today the vision has evolved and is now “To elevate the world from mediocrity to greatness” (Lululemon Athletica). When it comes to a mission statement, Lululemon doesn’t have one. Instead, they have a manifesto, which is a list of 31 inspirational sayings.

“These sayings allow Lululemon to reach a broader audience. With plenty of sayings to choose from, the customers are able to personalize their purchase and connection with the brand and the products they buy” (LoGiudice).

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Current Status

Lululemon is performing exemplary in the athletic wear market. “Their total net revenue increased 25.7% to $1.2 billion in 2017”. This increase primarily resulted from a couple of factors. One, the opening of 36 new Lululemon branded company-operated stores since Q4 2017 including 11 new company-operated stores in both the United States and Asia, eight in Europe, four in Canada, and two in Australia and New Zealand. Second, a total comparable sales increase of 17% on a constant dollar basis, comprised of a comparable store sales increase of 7% and an ecommerce increase of 39%. Lastly, net revenue from company-operated stores they opened or significantly expanded subsequent to Q4 2017, and are therefore not included in comparable store sales, increased net revenue by $48.3 million.

The company-operated store revenue totaled $730.0 million, or 62.5% of total revenue, compared to $618.9 million, or 66.6% of total revenue, in Q4 2017.

Ecommerce revenue totaled $344.2 million, or 29.5% of total revenue, compared to $236.1 million, or 25.4% of total revenue, in Q4 2017. Other revenue, which includes outlets, temporary locations including seasonal stores, sales to wholesale accounts, showrooms, license and supply arrangements, and warehouse sales totaled $93.2 million, or 8.0% of total net revenue, compared to $73.7 million, or 8.0% of total net revenue, in Q4 2017.

-Lululemon opened 14 new company-operated stores in Q4 2018 including six in Asia, three in each of the United States and Canada, and one in each of Europe and New Zealand. At the end of Q4 2018, they had 440 total company-operated stores compared to 404 at the end of Q4 2017. Of the 440 company-operated stores, 361 were in the comparable store base, including 240 in the United States, 54 in Canada, 33 in Australia and New Zealand, 22 in Asia, and 12 in Europe. At the end of Q4 2018, they had a total of 13 showrooms compared to 23 at the end of Q4 2017. Of the 13 showrooms, six were in Europe, four in Asia, and three in the United States.

The company classifies its geographic operations into three regions: Canada, the US and Outside of North America, which includes Asia, Australia and New Zealand. In FY2018, the US region accounted for 72.1 % of the company’s revenue, followed by Canada with 18.6% and Outside of North America with 9.3%.

Within their growth pillars (product, digital, and international) the company saw an increase in each pillar. In product there was a 21% increase in women’s bottoms and a 28% increase for men’s bottoms. Digitally, their site traffic grew by 30% and their email list by 70%. Internationally they saw a 70% increase in their Asia growth and a 55% increase in their Europe growth.

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For Q1 of 2019 Lululemon is projected to reach $740 million in revenue and for FY2019 $3.700 billion in revenue. Overall, Lululemon has been opening numerous stores and really focusing on their global expansion. This strategy has been successful for them and they are projected to continue to reach their goals.

Distribution

Lululemon operates four distribution facilities located in Vancouver, British Columbia; Sumner, Washington; Columbus, Ohio; and Melbourne, Victoria. Furthermore, it acquires various fabrics related to its products through a network of 65 suppliers. It also manages third-party warehouses in the Netherlands, Hong Kong, and China. Their research and development takes place at its headquarters in Vancouver as well as New York.

Lululemon currently manufactures its products in several different locations including Canada, the United States, Peru, China, Bangladesh, Indonesia, India, Israel, Taiwan, South Korea, Malaysia, Cambodia, Sri Lanka, Vietnam and Switzerland.

Most of their manufacturing is done in Asia however, they do have 3 manufacturers in Peru: Garment Industries SAC (2 different facilities) in Lima Peru and Textil Del Valle S.A in Ica Peru.

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Target Consumer

Lululemon’s target consumer looks for a combination of style, comfort, and performance in their athleticwear, choosing products that allow them to feel good in all of their athletic endeavors. The company offers authentic community experiences and strong brand credibility that allows them to reach a broader target market than just athletes, targeting those who want to lead an active and well-balanced lifestyle. Their customers have similar views about maintaining a healthy lifestyle through exercise, clean nutritional habits, love for the great outdoors, and an aspiration for connecting to their community and outside world.

Lululemon’s main customers are women, however, since adding a men’s line their customer base has grown immensely. Their largest market is the US, but the company has been working on expanding globally. The increase in global expansion will require Lululemon to think about how its connecting with its customer and how they will reach their target customer on a global scale.

The company’s demographic is men and women ages 18 to 45. Their annual income is $55,000+ putting them into the middle to upper class. They reside in metropolitan cities and are academically accomplished. They are also well-established, driven individuals with a fitness mindset. Their customers are focused on living a healthy lifestyle and are drawn to fitness trends such as yoga, cycling, and CrossFit. They are concerned about their workout clothing and are drawn to high quality products. When it comes to activewear, they look for products that will better them in their practice and still hold up in the fashion aspect. They are extremely busy in both their work and personal life but working out is a part of their daily routine. They are constantly setting goals for themselves. Their family and close relationships are what they value. They are inspired by their community and love getting involved. In their free time they enjoy hiking, reading, Zumba, and going to local farmers markets.

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Customer Profiles

The College Student

The Housewife

Name: Nyah Jackson Age: 22 Marital Status: Single Lives: 1 bedroom apartment Location: Ann Arbor, Michigan Education: BA in Kinesiology and Exercise Science, University of Michigan Occupation: Full time student Income: Works part time ; relies on her parents for financial support Activities: Running, and Zumba Favorite item: Align crop 21

Name: Monica Carrington Age: 40 Marital Status: Married with two kids; Emma and Bradley Lives: 5-bedroom house Location: Atlanta, Georgia Education: BA in Communications Occupation: Stay at home mom; Husband Lawyer Income: 1 million + Activities: Hot yoga and Pilates Favorite item: Energy bra

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Customer Profiles

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The Professional Female

The Professional Male

Name: Maria Santiago Age: 29 Marital Status: In a relationship Lives: 2-bedroom apartment with her bf Location: Dallas, Texas Education: BA in Accounting Occupation: Accountant Income: 150K Activities: Swimming and kayaking Favorite Item: Coastline one piece

Name: Henry Bishop Age: 33 Marital Status: Single Lives: Condo Location: Las Vegas, Nevada Education: BA in Finance MA in Real Estate Occupation: Real Estate Agent Income: 500K Activity: Mountain biking and hiking Favorite item: ABC pant classic

Future Outlook

Global expansion provides Lululemon with the opportunity to increase brand recognition and grow their global community. Being that Lululemon’s largest and most prominent market is the US, in order to continue their success in the future it is essential they tap into other markets and focus on building a loyal customer base. “By 2020, they want 20-25 % of their total sales to come from outside the United States” (Trefis Team). “As the company is also rapidly expanding into Asia and Europe it expects international revenue to quadruple by 2023” (Bhattarai). Based on Lululemon’s current and projected numbers, there is a high demand for quality athleticwear. “The company is on track to achieve their goal of earning four billion of revenue by 2020” (Trefis Team).

“Lululemon also plans to double its men’s business in the next five years as it looks beyond its women’s and accessories business for growth. They recently introduced two styles of boxers - priced between $28 and $68 - and plans to expand its line-up of men’s running gear in the coming months. The company, which last year had $3.3 billion in revenue, says it expects men’s business to become a $1 billion-a-year business by 2020” (Bhattarai). Chief executive Calvin McDonald said, “We’re ready to build upon our success and embark on the next phase of growth at Lululemon to realize the full potential of our brand.

We believe Lululemon has a unique opportunity to push beyond traditional expectations.”

“Lululemon is opening an “experiential store” in Chicago with yoga studios, a meditation space and a juice bar and also adding travel and office products, starting a self-care line” (Bhattarai). “The self-care line will include a deodorant, dry shampoo, facial moisturizer, and lip balm to cater to its fans’ post-workout needs. The foray into self-care, which Lululemon describes as a natural extension, seeks to combine its athletic credentials with the kind of cruelty- and irritant-free ingredients dear to its customers. The company will roll out the assortment, online and in 50 stores in North America in June” (Rastello).

The last idea Lululemon has in store for the f uture is getting into the footwear market. “CEO Calvin McDonald confirmed that the team has been developing an in-house shoe range that will build on the success of its collaboration with sneaker label APL (Athletic Propulsion Labs), which launched in August 2017” (George-Parkin). “We tested, and we learned a lot on footwear, and what we learned is: The guest resonates with us selling footwear,” said McDonald. “We believe we’ve identified an opportunity that will be unique to us and unique within the marketplace.” If Lululemon’s success continues, they will become a global lifestyle brand.

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SWOT Analysis

S One of Lululemon’s greatest strengths is the high quality of all the products they offer. Their products have been specially engineered with the needs of the target consumer in mind. Lululemon has patented 45 materials and has trademark registrations for several of its products, fabric names, and images. The fabric is specifically designed to absorb sweat and is described as a four way stretch fabric that has a cotton feel. Since this fabric is trademarked, it gives Lululemon an advantage when it comes to comfort and overall branding. By doing so, Lululemon is differentiating themselves and protecting themselves from competitors. This is a key selling point for many customers and one of the reasons the company has been so successful. Innovation is another key component of Lululemon’s success. They put a lot of focus on their R&D. They have a specific department within the company that is continually committed to developing new products and improving previous ones. The constant innovation and changing of products keeps customers coming back for something new. Lululemon’s customers are extremely loyal and one of the reasons the brand has been so successful. Having this strong following allows the company to be sure that their customers are satisfied with their product and that they will continue coming back. Lululemon does a very good job at retaining customers through current marketing techniques, as well as attracting new customers throughout the years.

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W One of Lululemon’s weaknesses is their brand perception. Many consumers view it as just a yoga brand geared toward female yoga enthusiasts, rather than a lifestyle brand catered towards active individuals including both men and women. The company has to continue working on expanding its brand perception to reach that target customer. Lululemon also has limited global penetration, which ties into another weakness for the company: their loyal customers are predominantly in the United States, which accounts for the majority of its sales.

They have done an exceptional job at reaching their target demographic and building customer loyalty. However, in order to continue growing it is imperative they diversify their geographic revenue stream focus and tap into other potential markets.

O There are a couple of opportunities that Lululemon can take advantage of. One of them being the rise in demand for athleticwear. This is being driven by a variety of social and demographic factors like consumers being more health conscious.

According to Statista, the consumption of health and wellness products is set to grow to $30.28 billion by 2020. Consumers are more attentive when it comes to their appearance which has driven the beauty industry and in return benefits the athleticwear demand. People are more concerned about their physical well-being and how they can stay in shape. They are engaging in more frequent physical activity and signing up for gym memberships. Therefore, the interest for sophisticated performance apparel is high. Consumers are spending more of their time in active apparel and therefore willing to spend the money on these products. All of these factors contribute to the growing athleticwear market. Another opportunity is new trends in the consumer behavior. This provides a great opportunity for the company to build new revenue streams and diversify into new product categories. In the end, allowing the brand to attract and target new customers as well expand their brand perception.

T A major threat that Lululemon faces is a highly competitive and saturated market. With the demand for athleticwear growing, more companies are trying to get in on a piece of the action, and the market has become even more difficult to penetrate. Lululemon’s biggest competitors have a more established global presence and brand recognition. Other threats that Lululemon faces are brands trying to copy their product and fabric, which as a result devalues the product significantly. Lululemon will have to keep these threats in mind moving forward.

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Competition

“Nike was founded in 1964 originally as Blue-Ribbon Sports by Bill Bowerman and Phil Knight” (Nike). Their first retail outlet opened in 1966 and they launched Nike shoes in 1972. In 1978, it was renamed Nike Inc and went public two years later.

Over the years, Nike has acquired several apparel and footwear companies. Today it owns two subsidiaries: Converse Inc, and Hurley International. Nike maintains its global leadership based on its strength in product development, branding, and significant market spending. Their consumer brand recognition is very high due to sport event sponsorships, endorsements, and its portfolio of globally recognized brand ambassadors like Michael Jordan, Cristiano Ronaldo, and Kendrick Lamar. Nike’s revenue for FY2018 was $36.4 billion. They have over 1,180 stores globally with over 73,000 employees. Their product categories are: golf, soccer, running, basketball, training and gym, yoga, football, baseball, tennis, skateboarding, and Jordan.

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“Adidas was founded in 1924 by Adolf “Adi” Dassler and his brother Rudolf” (Adidas).

It was originally under the name Dassler Brothers shoe factory. In 1949, the brothers split, and Rudolf established Puma. Adolf changed the name to Adidas, a combination of his nickname and last name. “Following the 1952 summer Olympics, Adidas acquired the 3-stripe logo from Karhu Sports and along the way a number of subsidiary companies: Reebok, Runtastic, TaylorMade-Adidas, and Ashworth” (Adidas). Adidas has pioneered designer collaborations to raise its brand image, create hype products and cultivate special relationships with Stella McCartney and Kanye West, boosting brand awareness, perception and engagement. As a way to reach out to a wider demographic, Adidas signed popular teenage performers, such as Selena Gomez and Rita Ora. Adidas has claimed that by 2024 it will only use recycled plastics, which would solidify its status as the most sustainable major sportswear company in the global market.

No other top sportswear or apparel company has fully integrated sustainability into its business strategy. For the (FY2017) Adidas’s revenue was 21.2 billion Euros. They have over 2,500 stores with over 49,000 employees. Their product categories are: training, skateboarding, snowboarding, tennis, golf, hockey, baseball, lacrosse, volleyball, yoga, weightlifting, boxing, running, soccer, football, basketball, and outdoors.

“Kevin Plank, a football player at the University of Maryland, founded Under Armour in 1996” (Under Armour). He was inspired after noticing how dry his compression shorts stayed in comparison to his t-shirt.

“His goal was to create a t-shirt made out of the same fabric that would wick away the moisture” (Under Armour). He sent prototypes to his friends in the NFL and that is when the business took off. Today, Under Armour is perceived as an athlete orientated, technologically accomplished producer. The company has built shares by focusing on a single brand and a core proficiency. This has helped it to achieve high levels of credibility, and to quickly build its position in the athleticwear market more effectively. Their growth has been driven by high levels of innovation and strategic sponsorship, in addition to the roll-out of its retail business and increased global awareness. For (FY 2018), Under Armour had $5.2 billion in revenue.

Today they have 319 stores and 7,000 employees. Their product categories are basketball, custom, golf, hiking and trail, running, sport style, and training.

The North Face began as a climbing equipment store founded in 1966, by Douglas and Susie Tompkins. “The North Face is the term for the coldest, most unforgiving side of a mountain” (The North Face).

They began creating apparel and opened up their first factory in 1970, in Berkeley, California. In 1993, they filed for bankruptcy and the next year the company was sold at auction for $62 million. In 2000, it was purchased by VF Corp, who today has a total of 24 brands. Today the brand delivers an extensive line of outdoor performance apparel, footwear and equipment that pushes the boundaries of innovation. They have over 100 stores with 2,600 employees. Their product categories are more focused on their outdoor activities as opposed to the other competitors. They are as follows: climbing, hiking, training, running, camping, backpacking, mountaineering, skiing, and snowboarding.

Gap’s broad portfolio, with brands at different price positions, allows it to target different consumers, as well as allowing the company to adapt more quickly to different trends shaping apparel and footwear. One of the brands they own is Athleta. It was founded by Scott Kerslake, in 1998, in Petaluma, CA. In 2008, the brand was purchased by Gap for $150 million.

“Athleta creates products that meet a woman’s needs, by breaking down stereotypes of female strength and beauty and uniting women to reach their limitless potential” (Athleta). Similar to Lululemon, they pursue a grassroots strategy that is in keeping with their core as a movement.

They run an affiliate program where fashion and active lifestyle vloggers talk about their merchandise. They also have a brand ambassador program. “The brand is trying to re vamp their women empowerment motto, by initiating the “Power of She” campaign. This campaign highlights that any woman of any age has the power to do what they want” (Athleta). Athleta has 161 stores with 2,000 employees in the US and lacks the global presence the other competitors have. Their product categories are running, training, hiking, yoga/ studio/dance, tennis, golf, and work/ commute/travel.

Victoria’s Secret was founded in 1977 by Roy and Gaye Raymond in San Francisco, California. The idea behind the brand began when Roy wanted to buy his wife sexy lingerie as a gift but did not want to appear weird buying women’s underwear.

“His goal behind VS was to facilitate shopping for underwear and make the process exciting so men felt comfortable and not perverted” (Schlossberg). The name was inspired by the store’s décor, designed to evoke the respectability of the Victorian era. In 1982, he sold the business to Leslie Wexner for $1,000,000. In 2016, Victoria’s Secret introduced their new sports line Victoria Sport. Their sport bras were different than their competitors because they came in regular bra sizes 30-40 A cup to DDD cup, rather than XS to XXL. There are over 1,100 VS stores with over 18,000 employees. Victoria Sport is very popular for all age groups, but lacks the brand creditability the other brands have, since it’s less than 3 years old.

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Competitive Analysis

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Perceptual Map

Lifestyle Brand

Focus on global community

Focus on local community

Performance Brand

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Competitive Analysis

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Price ($USD)

Price/Accessibility Matrix

Accessibility (# of countries distributed in) 21

Merchandising Strategy In 2018, Lululemon launched a new merchandising strategy. This started with a limited-edition collection for men in collaboration with Canadian apparel brand Roden Gray that intertwined Lululemon’s technical design abilities with streetwear. “The newest collaboration is with Francesca Hayward, a dancer at the Royal Ballet in London. This entailed pieces inspired by costumes from the Royal Ballet archives, as well as styles and colors that draw directly from Hayward’s input” (Ballard). “This strategy of releasing limited quantities of certain styles is consistent with the inventory management style started under former CEO Christine Day, which proved very successful in driving brand value and very high inventory turnover that was the envy of the retail industry” (Ballard). “By releasing these special edition collections, Lululemon is essentially turning its premium styles into one-of-a-kind collector’s items that cultivate a must-buy-now mentality among its loyal customers” (Ballard). “By collaborating with notable designers and celebrities, Lululemon is using the same play-book that top athletic apparel brands have used for decades to grow their brands. Nike and Adidas have grown their respective businesses by signing basketball stars to shoe contracts. Although Lululemon sells a more niche product than basketball sneakers, the yoga brand’s strategy to release limited edition collections could have a similar impact on its growth” (Ballard). Lululemon gains a lot of exposure each time they launch a new collection. Their goal is to build brand value over time.

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Pricing Strategy When it comes to price strategy, Lululemon keeps their discounts to a minimum, which is one of the reasons why the brand has been so successful. GlobalData Retail’s Neil Saunders said, “Lululemon’s price integrity is another reason for its out-performance. Promotional periods notwithstanding, products are not discounted, and customers know they must pay the full price if they want the product” (Hanbury). Retailers have begun to rely on promotions as a way to attract customers. This is successful in the short term, but in the long run it makes it more challenging to convince customers to pay full price for items. Lululemon sells their products exclusively in their brick and mortar stores as well as their ecommerce site. This means there is no risk of Lululemon items creeping their way into the clearance racks of department stores or ending up in the off-price channel.

“The brand stays desirable and exclusive, and ultimately, customers are prepared to pay full price” (Hanbury).

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Promotion Strategy Retail giants like Nike and Adidas are paying millions of dollars to dress the biggest icons in sports. This is where Lululemon stands out from their competitors. Lululemon has a grassroots approach to their marketing strategy. Up until 2017, they relied on word of mouth to promote their business. “They launched their first global advertising campaign in 2017 called This is Yoga, which emphasized how the meditation, breadth and self-discipline learned from yoga translates into other pursuits” (Pasquarelli).

Lululemon takes a very unconventional approach when it comes to their brand ambassadors. “The brand has built an ambassador program of local influencers, elite athletes and outstanding yoga instructors who create community, provide feedback on product and partner with Lululemon on social impact programs” (Fernandez). They divide their ambassadors into three categories: global yoga ambassadors who are instructors who bring different types of yoga practices to the community, elite ambassadors who are professional athletes, and store ambassadors who are local community influencers. “Our ambassadors are inspiring leaders, storytellers, and doers from around the world. They help us to keep our finger on the pulse of their communities and provide us with invaluable feedback so that we can improve and grow” (Lululemon Athletica).” “Through the program, ambassadors receive development tools and experiences, product to try out, a network of like-minded people, and a humongous cheer squad. This relationship also opens up the possibility to get up to big things together—to make a difference in our communities and beyond” (Lululemon Athletica).

In return they put in a certain number of hours inside the store running free classes.

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This was very beneficial to the local fitness/yoga coaches because they were able to meet more people and really help grow their businesses. For Lululemon, this allowed someone with a big influence and lots of connections to talk about the brand and showcase the clothes to a variety of new faces. At the time, CEO Christine Day said, “What having similar-minded individuals for store employees and free fitness classes in-store does is – it evolves customers’ perception of the brand from being an apparel company to an entity that embodies your ideals, and a community to find like-minded people.”

“Lululemon’s growth strategy is based on digital investments and global growth. Digitally, the company is investing in new CRM strategies and data analytics to help leverage personalization when engaging with customers. In return, is expected to boost traffic in stores and online” (Kitonvi). Lululemon also uses direct email as a way to boost traffic and connect with their customers, keeping them informed on upcoming promotions, events, and new products.

“In 2017, according to a report by Gartner L2 provided to Mobile Marketer, Lululemon saw a 38.5% open rate on emails with subject lines between 21 and 30 characters. That open rate outpaced the 24.4% seen by other brands using similar length subject lines in the report” (Kelly). “The activewear brand kept 50% of email subject lines in that range, and 86% at 30 characters or less, making it one of the few brands that sent its largest share of emails with this best practice. The copy itself was short and snappy, with lines like here, just for now and we’ve re-imagined a favorite” (Kelly). “Furthermore, Lululemon optimized 93% of its emails for mobile viewing, compared to 78% across the activewear sector, by featuring clear hero images above the fold and using a clean footer template with large clickable options” (Kelly).

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Market Research

“The global activewear market was valued at $351.164 billion in 2017. It is expected to reach $546.802 billion by 2024 with a growing CAGR of 6.5% (2018-2024)” (AP News). The growth is due to numerous factors including a growing fitness conscious population, an increased interest in participating in physical activities, the rise of disposable income, and the development of technology that has improved comfort and performance.

Sportswear in Brazil recorded a 5% current value growth in 2017, reaching BRL24.9 million. “It is predicted to record a 2% value CAGR at constant 2017 prices over the forecast period, reaching BRL27.8 billion in 2022” (Euromonitor).

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Brazil has the highest number of health clubs overall at 34,509 in 2017, just behind the US. The increase in the total number of gyms reflects the potential that sportswear in the country continues to face. “As an increasing number of Brazilians continue to engage in physical activity, the target audience for sports apparel also increases� (Euromonitor).

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Market Research

“In 2015, 45.7% of Brazilians said fitness had been their main sports activity and they engaged in it four or more times a week and 33.5% engaged in it three times per week” (Statista). An important part of the growing demand for activewear can be attributed to the work of fitness digital influencer’s and the technology. These influencers through social media promote not only the practice of exercise, but also the consumption of clothes and footwear specifically conceived for a whole lifestyle associated with each sport.

Within the technology sector, there are a variety of apps and gadgets associated with fitness. These help with the user’s overall fitness experience. “In 2017, 27% of Brazilians said they use a fitness or sport app and the use of fitness bands increased by 5% from 20152017” (Statista).

The Brazil apparel market was valued at USD 31.44 billion in 2017. It is expected to continue to increase over the coming years due to the spending power of consumers, coupled with a base of enthusiastic shoppers in the country. In addition, rising adoption of international fashionable wear among children and women is expected to drive the demand for apparel in the country.

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The consumption of Health and Wellness products in Brazil rose from $22.32 billion in 2014 to $28.58 billion in 2018. It is estimated to reach $30.28 billion by 2020. Overall, Brazil has remained a strong contender in every category in the Health and Wellness market. “Brazilians are known for being concerned about their physical appearance and many exercise on a regular basis. Even when Brazil faced one of its worst economic recessions, consumers did not drastically change their exercise habits and continually looked after their overall physical wellbeing” (Euromonitor). This demonstrates that health and wellness is becoming a lifestyle for people and not just a trend. They are willing to spend the money on products to maintain their health and it is becoming more important as the numbers continue to increase. One example of this behavior comes from the total number of sports clubs and gyms in the country. “Even when local economic activity declined, the number of establishments managed to marginally increase. Over the course of the review period, the total number of sports clubs and gyms increased by 10% and is estimated to increase to 17% by the end of 2021” (Euromonitor). Part of this increase can be attributed to the international sports events being held in the country: the FIFA World Cup in 2014 and the summer Olympics in 2016. At this time, this allowed for leading brands like Nike and Adidas to raise brand awareness by sponsoring teams, promoting events, and advertising during broadcasts.

Specifically, “Nike created a hotsite selling the entire collection designed for the Brazilian Olympic team with items exclusively created for the event and Adidas launched an exclusive line of performance footwear and the official soccer ball of the competition with the theme of the Olympic Games in Brazil” (Euromonitor).

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Market Research

Nike has dominated the Brazilian market. However, in 2017, Adidas managed to regain its number one position in sportswear in Brazil.

Adidas implemented several initiatives that contributed to its growth in the country. Adidas followed “a global strategy that prioritized products more focused on fashion than performance, the company benefited from the growing trend for athleisure. Locally, the company also changed its marketing strategy by focusing investments on influencer’s, such as the singer Anitta as a way to attract the consumers attention. One of her video clips featured outfits on which the Adidas logo was easily recognizable� (Euromonitor).

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Why Brazil

Brazil is the largest and most opulous country in South America. “It is the top ten list for biggest economies in the world.

It is a member of the G20, one of the four “BRIC” countries deemed to a be dominant economy by 2050” (Molson). “Ecommerce in Brazil has grown by over 20% over the last three years, and with approximately $14 billion USD promised in infrastructure including road, air, ports, airports and municipal water treatment, the time for small and medium-sized businesses to export to Brazil is now” (Molson).

Brazil’s strong clothing imports, high spending of people on apparel items, and shifting consumer preferences towards latest fashion are rendering Brazil a prominent destination for manufacturers and retailers in the apparel industry. Moreover, the status of Brazil being one of the top exporters of finest quality apparels and textile has worked in favor of the Brazil apparel market” (Hexa). However, when conducting business in Brazil it is essential to understand what is going on politically, economically, socially, technologically, legally, and environmentally.

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(P)ESTLE

Brazil has recently dealt with a lot of political corruption. The most well-known has been the Petrobras scandal. Since 2014, “Brazil has been gripped by a scandal that started with a state-owned oil company and grew to encapsulate people at the very top of business - and even presidents” (BBC). It originally started in 2014 as Operacao Lava Jato (Operation Car Wash), “an investigation into allegations that executives at the state oil company Petrobras had accepted bribes from construction firms like Odebrecht, in return for awarding them contracts at inflated prices” (BBC). However, once officials dug deeper it was concluded that money was then passed to political parties for use in elections and payoffs. More than 130 businessmen and politicians in Brazil were convicted in the case, including former President Luiz Inacio Lula da Silva also known as “Lula” who served from 2003-2011. “He was found guilty of the first of five charges against him: that he had been given a beach front apartment by engineering firm OAS in return for his help in winning contracts with Petrobras” (BBC). Lula denies all of the charges and says, “the trial and investigation were politically motivated to prevent him from running for president again the next election” (BBC). He was sentenced to 12 years in prison. Both Petrobras and Odebrecht executives, including former chief executive, Marcelo Odebrecht, were sentenced to jail time. In April 2017, a U.S. federal court ordered Odebrecht to pay $2.6 billion in fines to authorities in Brazil, Switzerland, and the United States. During that time the company also fired more than half of its employees. The scandal had a devastating effect on Petrobras - which dropped from 4th place to 22nd place in the rankings of world oil companies in the span of two years - and on Brazil’s offshore oil industry” (Marex).

Many other investigations were conducted as a result of the Lava Jato, one of them being Operacao Carne Fraca (Operation Weak Flesh). It looked into allegations that employees of BRF and JBS (large beef and poultry exporters) bribed food inspectors and politicians to approve the sale of spoiled products and get government certificates for their products. One of these politicians was president Michel Temer, who took over as president in August 2017. Temer is accused of receiving some of the bribe money but denies all charges.

He remained in office until the term ended January 1st. In March 2019, he was arrested and charged with corruption and money laundering.

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(P)ESTLE

Within the past couple of years, Brazil has had two presidents charged with corruption, which has made the country politically unstable. Now recriminations, mass protests and general condemnation are the new normal. The public confidence has been shot to pieces due to these scandals, which made the October 2018 election even more vital. Retired army officer Jair Bolsonaro won and took office in January 2019. He won because he was the candidate under the Social Liberal Party and the infamous Petrobras Car Wash scandal that nearly destroyed Brazil occurred under the Workers Party. Within hours after the election, Brazils stock market increased by 5% and Petrobras shares increased by 7%. It may have been a small sign, but it was still a sign to show Brazil moving in a positive direction.

Brazil is at the forefront of international politics. It is a founding member of the Southern Common Market (Mercosur) which includes Brazil, Argentina, Paraguay, and Uruguay. Mercosur functions as a customs union and free-trade area whose goals include the harmonization of the economic policies of its members and the promotion of economic development. Brazil was also a part of the formation of the Union of South American Nations (Unasul), which aimed at promoting regional integration. “The formation of Mercosur and Unasul demonstrates Brazil’s pioneering efforts toward economic integration and co-operation that would be beneficial to most countries in the region. The incumbent government maintains strong ties with the BRICS nations. It also endorsed the setting up of a bank to cater to their developmental needs. These growing ties are expected to strengthen the influence of Brazil in global policymaking bodies” (Business Source Premier). Brazil has also applied for a membership in the Organization for Economic Co-Operation and Development (OECD), which is a group of 35 countries, “aimed to promote policies that will improve the economic and social well-being of people around the world” (OECD). Lastly, Brazil has been trying to improve its ties with the United States and Mexico. In May 2018, Brazil and the US started the open-skies agreement allowing for increased air services between the two countries and greater competition between airlines. In addition, Brazil and Mexico signed a trade agreement regarding the automotive industry. Overall, Brazil has dealt with a lot of political turmoil, but with the introduction of a new president the future looks promising for Brazil to become politically stable once again.

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P(E)STLE

Brazil is South America’s most influential country, a rising economic power and one of the world’s biggest democracies. However, the numerous scandals, took a major toll on the country. The political crisis caused one of the worst recessions the country has had in decades. In 2015, the GDP decreased 3.9% and in 2016 by 3.6%. In 2017, the country saw some relief when the GDP increased by 1% due to “a strong rebound in exports, an improving labor market and a pickup in investment, supported in part by lower interest rates” (Euromonitor). The momentum continued in 2018 with an increase by 1.4% and is set to continue in 2019 with a growth rate of 2.4% While the GDP has been improving, unemployment has progressed in a positive direction. In 2017, it was at 12.8% and during 2018 it was at 11.8%. An improvement in household consumption lead to this decrease. When it comes to the currency, “although the Brazilian real appreciated annually against the US dollar in 2017, expectations are that the exchange rate will exhibit weakness against major currencies over 2018-2023, owing to uncertainty over Brazil’s political direction; doubts over the implementation of reforms; and continued revelations arising from corruption probes” (Euromonitor). The inflation rate is expected to increase from 2018-2023 by 4.2%.

Brazil has a strong agricultural base and according to the OECD-FAO 2015-2024 Agricultural Outlook report, “Brazil is expected to become the leading exporter of agricultural and food products worldwide” (Business Source Premier). In 2017, the country’s major export markets were China at 21.8%, EU at 16.0%, and the USA at 12.4%. Brazil is the world’s largest exporter of beef, sugar, coffee, orange juice, and soybeans. The export of soybeans is expected to double between 2017 and 2024 and sugar production exportation is projected to soar. The agricultural sector employs 13.1% of the workforce in Brazil and the government has been trying to promote agricultural activities through a number of programs. For example, The Policy of Guaranteed Minimum Prices (PGPM), The National Food Supply Company (CONAB), and The National Programme for Strengthening Family Farming (PRONAF). As a result, the food and crop production index experienced upward trends. The other major industry in Brazil is manufacturing, as it accounts for 11.8% of the GDP and employs 11.1% of the workforce. Their biggest manufacturers produce automobiles, computers, software, and electronics.

Specifically, in the car industry, Brazil is expected to see a surge in exports, where in 2017 they shipped more than 700,000 units. “The merger of two large pulp producers in 2018 created one of Brazil’s biggest industrial companies and is expected to greatly enhance its international role. The manufacturing sector is supported by solid gains and domestic demand and job creation” (Euromonitor).

Brazil is one of the most expensive countries to conduct business in because of its poorly structured revenue system and high taxes.

The government has passed a couple of reforms through its Programa de Aceleraco de Crescimento (PAC 2) program as a way to boost the business climate and attract foreign investment. “They include improved access to the oil sector for foreign investors, reforms to bankruptcy procedures, a reduction in bureaucracy and the sale of infrastructure concessions for airports, roads, electricity and ports” (euro monitor). For example, “in 2018 Valter Casimiro, the Brazilian Minister of Transportation, announced a government investment of BRL250 million ($64 million) for infrastructure projects in Alagoas. This investment covers the state port, road and airport sectors.

Furthermore, the government official also signed a BRL5.1 million ($1.3 million) investment to build a port terminal at Maceió Port” (Business Source Premier). The total of these investments were around BRL 989 billion ($303.91 billion). Brazil went through a terrible recession but has been slowly improving its economy through reform programs and their agricultural and manufacturing sectors.

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PE(S)TLE

In 2018, Brazil’s population was at 209.21 million and by 2022 is expected to reach 214.77 million. One of the biggest social issues Brazil faces is poverty. According to the Brazilian Institute of Geography and Statistics (IBGE), more than 50 million people (about 25% of the population) are below the poverty line and have a family income of $387.07 Brazilian Real per month which is just $5.50 a day in the United States. The government began taking measures to improve this issue through a couple of reform programs. One being the Zero Hunger Campaign to provide basic food to millions of families. Another is “Bolsa Familia,” which transfers money to low income families on the condition that their children have to attend school, get vaccinated, and have preventive health care visits. “In May 2011, the government announced a new definition under which citizens earning BRL70 ($21.32) or less a month are qualified as living in extreme poverty. The definition meant that 16.2 million citizens were covered under the Brazil Without Poverty program. The program was extended in February 2013 to cover around 22 million people” (Business Source Premier). These poverty eradication programs have allowed 35 million people to become part of the lower middle class.

Another key social factor to consider in Brazil is the high crime rate. The country possesses high rates of violent crimes like murder, robberies, and drug trafficking. In 2017, Brazil had 63,688 murders, which increased by 3% from 2016 and equaled around 175 deaths a day. Based on data from the Brazilian Forum of Public Security, the country’s murder rate stood at 30.8 per 100,000 people in 2017, up from 29.9 in 2016. The drug trade is a major factor in the violence. Rival cartels are fighting for the control of the routes that transport drugs coming from nearby countries. The government has been trying to crack down on the drug trade which has then contributed to overpopulated prisons. In the last 10 years the prison population doubled, and it is now the third highest in the world just under the US and China. Even though Brazil faces many issues, their situation has been improving, “they recorded a rate of 24.7 homicides per 100,000 in 2018, the lowest since its records began in 2011. The overall number of homicides was 51,000, a seven-year low” (Christofaro).

An additional imperative social issue facing Brazil is the inequality/violence towards women. According to the Labor Ministry, 60% of employees with a university degree are women, but they were paid 36% less than men with the same education level. Women struggle for equal pay as men, but also deal with challenges entering into the work field. 78% of men hold paying jobs compared to only 56% of women. It’s difficult to make changes when people in power continue to diminish women. For example, when Michel Temer was president, on International Women’s Day, he diminished Brazilian women’s role in society to solely housewives and caretakers. In his official Women’s Day speech he said, “I am absolutely convinced,…[that I know], how much a woman does for the household, for the home, creating a home for the children, and if society somehow goes well and the children grow-up well, it is because of its formidable home training and, surely, it is not the men who do it, it’s the women”. During his presidency, Temer was also the only president who nominated only men into his office. The current president Jair Bolsonario has made numerous comments against women saying they shouldn’t receive equal pay to men, as well as telling fellow congress member Maria do Rosário: “I would never rape you because you don’t deserve it” (Kaiser). Bolsonario makes jokes, but violence and rape is very serious problem for women in Brazil. “According to the violence against women statistics reported by the OECD, at least 15% of women in Brazil agree that a husband/partner is justified in beating his wife/partner under certain circumstances and at least 31% of women have experienced physical and/or sexual violence from an intimate partner at some time in their life” (Business Source Premier). Environmentalist and candidate Marina Silva has highlighted violence against women. In 2017, Brazil documented more than 60,000 cases of rape. Socially, Brazil has slowly been making 35 improvements, but they still have a long way to go in order for them to be considered socially stable.

PES(T)LE

Within the technology sector, Brazil is lagging and hasn’t contributed much to global R&D. The country is looking to develop its technological landscape by encouraging R&D investment through incentives. This includes an income tax deduction of up to 100% for R&D investments, the accelerated depreciation of R&D assets, and reduced IPI (Federal level VAT) on the acquisition of an asset. By providing these incentives, the government has been successful in encouraging foreign companies to strengthen Brazil’s technological sector. “Information and communication companies of international repute have cemented their bases in Brazil and signed pacts with either the government or private companies. These efforts to increase investment in Brazil are indicative of the favorable regulatory environment, which encourages R&D in the country” (Business Source Premier).

Another issue is the disconnect between research centers, universities, and the private sector that makes it so challenging to innovate in Brazil. This disconnect transpires from “legal framework that lacks the mechanisms required for implementation in practice, heavy tax burden, insufficient fiscal incentives that don’t reach all players in the ecosystem, lack of skilled workforce and shrinking government budgets for science and technology” (Mari). The government has put legal innovation framework in place as a way to minimize the disconnect. The Brazilian Innovation Law aimed to increase the participation of public research institutions, support independent investors, and create funds and technology centers where regional stakeholders could combine and discuss their R&D. The Innovation Law was updated in 2016 and 2018 with the hopes of generating more dealings between publicly-owned research organizations and the private sector and bringing more legal security to the parties around the technologies that are jointly developed. According to Luiz Ricardo Marinello, a São Paulo-based lawyer focused on intellectual property, “fiscal incentives need to be more significant and processes improved so that innovation can gather momentum in Brazil. The government needs to understand that innovation processes are directly relevant to economic development as a whole, they can create jobs and reduce inequality as a result” (Mari).

As a way to boost innovation, technology, and R&D the government launched the “Inova Empresa Plan” in 2013. The plan aimed to set up support instruments like credit, grants for companies, grants for research institutes, equity, and public procurements for the information and communication technology sectors. In 2014, a federal investment program was created guaranteeing BRL 13.5 million ($4.25 million) for Brazilian businesses or research centers engaged in technological innovation under the Inova Empresa Plan. With all of these initiatives put in place the goal is to boost productivity in the technological sector.

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PEST(L)E

A current challenge in the legal sector for Brazil is their complicated tax system. There are 3 levels of taxes: federal, state and municipal. Even though the federal constitution set forth general rules applying to all taxes, “each state and municipality has powers to enact their own laws and regulations for the collection of the state and municipal taxes” (Machado). As a result, there are more than 10 federal taxes collected, 2 state taxes collected by each of the 26 states, and 2 municipal taxes collected by each of the 5,570 municipalities. This creates a lot of issues for new businesses in Brazil. According to the World Bank Doing Business 2019 report, “it takes almost 2,038 hours (almost 85 days) to prepare, file and pay the corporate income tax, value added or sales tax, and labor taxes, including payroll taxes and social contributions” (Business Source Premier). Every consumer must also submit their tax forms electronically through the Sistema Publico de Escrituracao Digital (SPED). Due to the fact that it takes Brazilians 12 times longer to do their taxes than the average consumer and it is a barrier to long term growth, there is talk from the new president Bolsonaro about reforming the system. A source with direct knowledge of the proposals said, “right now, he is analyzing 3 models: a program of gradual adjustment, adopting a value-added tax, or a broader plan that could include a tax on financial transactions”.

Another legal factor to keep in mind is judicial delays due to an excess of appeals. Brazil has four instances up to the Supreme Court (STF) as opposed to typically two. Also, the Supreme court can’t choose which cases it hears, so it must rule on every appeal. According to Joaquim Falcão, dean of FGV-Rio, and graduate from Harvard, “there are now 52 ways to get a case into the STF, and all cases claim to be raising constitutional issues. Over 80% of cases reaching the STF are procedural rather than substantive appeals, and this has an enormous impact on the system at all levels” (IBA). Government attorneys will file an appeal even when they know they are going to lose because it will still finance the state. Not to mention, if cases are considered too old they will be dismissed, so some judges will delay a case just for that reason. Lastly, an external factor affecting the overall time are strikes because strikers normally get paid for the time stopped and will receive compensation after, with unpaid overtime. There are numerous factors contributing to the judicial delays both internally and externally. It is going to take restructuring the entire system before we see any sort of change.

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PESTL(E)

Brazil is home to the world’s largest tropical rainforest: The Amazon. It accounts for 26% of the world’s remaining cover and its biomes hold more than 20% of the world’s total species. The biggest threat to the Amazon is deforestation. If the deforestation continues at this pace, the region will experience a severe drought and rain fluctuations with a potential of global impact. The government has put forth environmental policies aimed at “alleviating environmental degradation and limiting excessive usage of its resources. Its policies further emphasize the urgency of protecting ecosystems and preserving representative areas that are home to rare species of flora and fauna” (Business Source Premier). In February 2018, the Director-General of the International Renewable Energy Agency (IRENA), Adnan Z. Amin, agreed with Brazil’s decision to start the process of joining the IRENA. The country’s decision to seek IRENA’s membership shows its commitment to multilateralism and sustainable energy. Adnan said, “Brazil is a pioneer in bioenergy and one of the leaders in wind and hydro in Latin America, Brazil has a vast, diverse and growing renewable energy portfolio which positions it to play a key role in the global energy transformation underway” (IRENA). For the future outlook, the government is aiming to reach an 80% decrease in deforestation by 2020.

As mentioned previously, the Amazon Rainforest is a key factor to the global climate and biodiversity, but it is also key for the ecotourism of Brazil. Ecotourism helps to preserve biodiversity, but also benefits the country’s economy. This can help provide employment for the population and conserve Brazil’s indigenous heritage. One example of this is the National Law Number 6938 of 1981, which establishes the Brazilian policy on the environment. “This indirectly influences the legality of ecotourism in Brazil by way of setting down policies through which the environment can be developed, and how it should be protected” (International Wildlife Law). Another example is the Amazon Cooperation Treaty (ACT). “It is a cooperative agreement between the major countries that sets down guidelines through which ecotourism must be developed, including the benefits that ecotourism must have for the local peoples that inhabit the forests of the Amazon, as well as the benefits it must have for the participating countries” (International Wildlife Law).

The agreement aims to enhance the lives of locals, but also make tourism in the region more accessible. Lastly, in November 2018, the Ministries of Environment and Tourism, the Chico Mendes Institute for Biodiversity Conservation (ICMBio) and the Brazilian Institute of Tourism (Embratur) signed an agreement, which focuses on promoting nature tourism to conserve protected areas. Brazil has 324 conservation areas that cover 9% of the country. Among these, 72 are national parks, which cover around 26 million hectares.

Brazil is one of the largest users of renewable energy in the world. The country has 61.85% of its energy needs being met by hydroelectric and their hydro-power capacity at 100,273 MW. By using hydro-power, Brazil can reduce their number of power-plants, which adds pollution to the environment. By 2021, Brazil is set to build 168 dams in the Amazon Basin at a cost of $150 billion. Some of the dams will be the largest in the world, with the goal to harness the river for hydroelectricity. Lastly, Brazil wanted to focus on climate change and agreed to source 20% of the country’s electricity requirements from renewable sources by 2030 and restore 12 million hectares of its forests in an effort to curb carbon emissions. The future for the environment will largely depend on the ability of the government to manage and conserve the ecosystem. Being that Brazil plays such an essential role it will be crucial to continue taking the steps to preserve and protect the biodiversity.

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Business in Brazil In Brazil, good personal relationships are key to success when conducting business. Brazilians place a strong importance on family relations and it is common to see numerous family members working for the same company. Brazilian companies are vertically organized, the person with the highest-ranking title will be the one making the final decision. What you wear to a business meeting is just as important as the business meeting itself. Brazilians pay attention to fashion and expect others to dress for the occasion. Men should come dressed in a suit and tie and women should come in feminine dresses or well-tailored trouser suits, with closed toed shoes with a little bit of a heel. Both genders should pay attention to small details like nails and teeth and be modest when using cosmetics. When conducting Brazilian business, it is recommended to have a “despachante� (middle man). It is important to schedule meeting times two to three weeks in advanced. When greeting one another, men will shake hands and women will be greeted with a kiss on each cheek, as well as addressing them by their title, followed by their surname.

A business card is usually exchanged at this time, with one side being in English and the other in Portuguese. Business meetings in Brazil are held in casual settings like cafĂŠs and restaurants typically in the morning or afternoon. It is also common to start out with drinks and small talk. It is very important to not rush this process. During small talk it is not appropriate to discuss the economy or politics. You can however mention art, culture, and soccer, as this helps to establish a personal connection beforehand. In giving the actual proposal, the presentation should be lively, expressive, and visually attractive. It is common to have interruptions throughout the meeting. Overall, the pace in Brazil is much slower and it may take several meetings to accomplish a task. Decisions are not taken lightly and are thoroughly thought over. If a decision is not reached, it is essential to schedule another meeting with a concise date, place and time (Communicad Group Limited).

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Rio de Janeiro

“Southeastern Brazil (composed of states Espírito Santo, Minas Gerais, Rio de Janeiro and São Paulo) is the nation’s wealthiest region, raking in approximately 60% of Brazil’s total GDP. This region also leads Brazil in population, industries, vehicles, hospitals and more” (Molson). Rio De Janeiro has the second highest population in Brazil next to Sao Paulo. It was chosen as “the site for the headquarters of many private, national, multinational, and state corporations, even when their factories were located in other cities or states. Despite the transfer of the capital to Brasília, many of these headquarters remained within the Rio metropolitan area” (Guimarães). Even though it is no longer the capital of Brazil, the city has evolved immensely.

The Greater Rio area is an important center for air services in Brazil, with flights to the world’s major cities. Airports include Galeão-Antonio Carlos Jobim, which offers domestic and international services, and Santos Dumont. “The port of Rio has a large market area and is among the country’s leading ports by tons moved. “In Greater Rio, which has one of the highest per capita incomes in Brazil, retail trade is substantial. Many of the most important retail stores are located in the Centre” (Guimarães). Rio de Janeiro is also one of the premiere tourist destinations, attracting hundreds of thousands of people each year for events like Rio Carnival. Rio is a major city which hosted the 2014 FIFA World Cup and the 2016 Olympic Games. This makes it a prime location for Lululemon’s pop-up shop.

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Direct/Indirect Competition

The direct competitors are Track&Field and Asics. They are the only stores who specifically focus on activewear. Track&Field was founded on February 1st, 1988 by Fred Wagner, Alberto Azevedo and Ricardo Rosset. While it isn’t very prominent in the US it is one of Brazil’s largest fitness apparel brands specializing in high-end sports and beachwear in bold patterns and colors for men, women, and kids. Collections include activewear and lifestyle apparel, as well as cross-training, triathlon, yoga, running, swimming and cycling, among others. Retail prices for the store’s apparel range from $40 to $180. Its winning strategy of offering both function and fashion, innovative and trend-right designs made of high-performance yet luxurious fabric, has resonated well with the Brazilian consumers. While Track&Field has a permanent collection, they release a new capsule collection every single week. “Our consumers in Brazil love the novelty of the special edition capsule collection,” Founder Fred Wagner explains.

“It works very well. It’s a totally different model than other stores” (McKillop). Today the company has over 120 stores in Brazil and is starting to make its presence known in the US. At the New York City store, Wagner says, “So far, Track & Field has not seen many big differences between its Brazilian and U.S. customers. Actually, the customer is quite similar.

Our clients here and in Brazil gravitate toward the products that are both stylish and performance based.” (Russell).

The second direct competitor is ASICS. Kihachiro Onitsuka founded Onitsuka in Kobe, Japan in 1949. Later the company name changed to ASICS, which was an acronym for “Anima Sana In Corpore Sano” (you should pray for a healthy mind in a healthy body). “It was founded on the belief that the best way to create a healthy and happy lifestyle is to promote total health and fitness” (ASICS). Their products were introduced to the US in 1977. In May 1990, ASICS opened the Research Institute of Sports Science in Kobe with one goal: “to enable professional and recreational athletes all over the world to perform better, to reach a higher level, and to enjoy themselves” (ASICS). Observing and analyzing physical movements is the basis of every product. Their goal was to create unique, innovative products with high added value.

That strong emphasis on technology is still carried through to this day. They conduct various research and design activities covering material design to structural design, aimed at enhancing product performance through human centric design processes. Their product categories are running, training, tennis, trail, wrestling, and volleyball. There are 226 stores with over 8,000 employees.

The major indirect competitors are Forever 21, Tommy Hilfiger, Gucci, and Farm. Even though they are not considered activewear lifestyle brands like Lululemon, each has an activewear section that could attract our consumer and meet their needs. They offer a variety of price ranges that appeal to a wide range of customers.

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Consumers in Brazil

In 2018, Brazil’s population was over 208 million. By 2047, that number is set to increase to 233.2 million. With the growing number of people, it is anticipated to have more demand for clothing and fashionable accessories through 2025 and the increase in consumer spending on these items is supported by rising income of the population. Digitalization also plays a crucial role in the development of the market as Brazilian people tend to use credit cards more frequently than in other countries. Changing consumer preferences towards latest fashions are poised to provide growth opportunities for market expansion over the forecast period.

With the rising growth in technology, consumers are easily influenced by social media. On average Brazilians spend 3 hours and 40 minutes on social media each day. “The Brazilian government has invested heavily in the country’s internet connectivity to bridge the technology gap between rich and poor. As a result, over a 100 million Brazilians are now on social media – 87.7% of the country’s total internet population” (Wordbank). Brazil is Facebook’s 4th largest market, making it the most prominent social media platform in Brazil. When it comes to Twitter, it hasn’t been nearly as popular. Brazilians are considered to be big video and image content consumers, which is why other platforms like Instagram and Youtube are used more. Being that SIM cards are extremely expensive in Brazil, texting isn’t as popular. One of the most common ways people are staying connected is through Whatsapp. Whatsapp is a free messaging and voice app that allows to connect internationally over WIFI or data. Today Whatsapp in Brazil has over 120 million users.

The recession in 2014 negatively affected the spending habits of the Brazilian consumer. A survey conducted by McKinsey and Co discovered that Brazilians were more cautious and conservative when it came to their spending habits. The consumers were looking to save money and “their buying behavior included: pro-actively searching for savings, shopping across channels, brand loyalty decided by price, trading down to less expensive brands, and splurging in select categories” (Donatelli). Although Brazilian shoppers love purchasing online they are very insecure when it comes to purchasing through an online store. There is a lack of trust when it comes to payments. They typically pay online using payment methods like Boleto Bancario. “Boleto Bancario is a push payment system and is used by consumers who don’t own a credit card or just prefer the security of offline or cash payments” (PagBrasil). “When it comes to shopping 80% of Brazilian consumers research online prior to purchasing and 71% find reviews from other buyers helpful” (Lopez). They also value personalization when it comes to their overall experience inside a store.

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Primary Research

While the secondary research provided a strong base for the overall industry and company information, it was decided that quantitative research would be deemed insignificant because of the inability to access the target demographic.

Instead, qualitative research in the form of interviews, a focus group, and observations were conducted. The primary research provided the opportunity to speak with a Lululemon employee to gain further insight about the brand.

Gathering information straight from the source allows for a better understanding of the current position of Lululemon and the activewear industry. The objectives going into the interview were to find out more about how Lululemon attracts their male consumer, what kind of events they host, and how they go about their promotions. The limitations are that this Lululemon store is smaller in scale and wouldn’t do as much as bigger stores in more prominent cities. The focus group conducted will allow for further insight about the Brazilian consumer and their shopping habits. The objectives were finding about what is most important when they are shopping for activewear, where they typically shop, and their spending habits. The limitations were finding people who were from Brazil, who agreed to be a part of the focus group. Store observations will demonstrate the differences between Lululemon and their competitors. The objectives were to see how Lululemon was differentiating themselves from their competitors through store atmosphere, technology, and product. The limitations for in-store observations were the locations of the stores. Some of their competitors’ stores were too far away to conduct a visit and observation, while the rest were in an outlet rather than their own brick and mortar store. Non-outlet stores tend to have less sale merchandise and potentially different clients looking for the “newest and latest” not “discounts”.

In-store observations were done at the Lululemon store located on Broughton Street in Savannah, Georgia, while the competitors were done at Tanger Outlets Savannah and Tanger Outlets Hilton Head Island. Both outlets have the same hours and offer VIP club parking, if you’re a member. The observations were conducted in Nike, Adidas, Under Armour, The North Face, Victoria’s Secret, and ASICS. All observations were during weekdays, between 11:30am – 2:00pm and lasted between 20-30 minutes.

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The first competitor was Nike. It had a store at both Savannah and Hilton.

When first walking into the Tanger Outlets Savannah, the store atmosphere was positive. It smelled like new shoes and they had upbeat music playing. They had 5-6 employees working, even though it wasn’t busy.

The foot traffic in the store was a 5 out of 10, ten being extremely busy.

The staff was greeting customers when they walked in and were very helpful. They wore all Nike gear. There was a display when first walking in that directed you to either go right to the men’s section or left to the women’s section. Nike had a lot of individual racks in the middle of the store with 2-4 items on each. They also divided some of the racks into different categories, for example, running, golf, sportswear, and training. The accessories were scattered around the store. The sneakers were located in the back of the store. The seating they had was in the back, so customers could try on shoes. While observing customers, most knew what they were looking for. Many people were shopping the sneakers and clearance. Most didn’t have any questions for the staff. The customers who did were asking if they had the sneakers in a specific size in the back. The customer base was predominantly men in their late twenties to late fifties. 85% of the customers who came into the store purchased something. In regard to technology, Nike had four cash registers with upto-date computer systems. In the near future, Nike is looking to replace cash registers with mobile checkout devices. When walking into the Nike at Hilton Head almost everything was the same as in the Savannah location. The major differences were the size of the store, the amount of foot traffic/seating, and customer observations. There was less foot traffic, 4 out of 10, and the size of the space was larger in Hilton Head.

The seating in this store had double the benches compared to the store in Savannah, giving their customers a lot more room to sit down and try on shoes. During store observations, most customers came in and walked straight to the back of the store, where the sneaker section was. The majority of customers shopping were an older demographic or parents with their children. Similarly, as in Savannah, when customers weren’t trying on sneakers, they were looking at clearance. Overall, Nike stayed consistent within both of their locations and were successful in meeting their customer’s needs.

The other competitor to have stores at both locations was Under Armour. At the Savannah Outlet, the store atmosphere was very open and more spacious than Nike, due to not having nearly as many products and fixtures. The pop music playing in the store added a nice touch to the overall feel. While the store atmosphere was pleasing, the staff was extremely standoffish and rude. They were not greeting customers when they walked in and continued to carry on with their own conversations. They all wore Under Armour gear. Like Nike, the shoes were located in the back of the store and where the only seating was located. They divided their store to men on the right and women/ kids on the left. During store observations, customers didn’t seem to have a specific item in mind when coming to shop. Under Armour had a lot of items on sale and clearance. The foot traffic was 3 out of 10. During the observation, a customer became frustrated with Under Armour’s checkout system. She wanted to order an item online and the staff was having technical issues which prevented the order from being placed. The order was finally completed ten minutes later. After further observation, it was concluded that they can only order an item through the mobile checkout device and not the register itself. Observations conducted at the store in Hilton Head had a similar outcome as in Savannah. The staff was again rude and standoffish to incoming customers. One difference at this location was the checkout area.

Instead of being in the right corner, it was in the middle of the store.

The customers shopping were again an older demographic, ranging from late thirties to late sixties and were browsing. Unlike Savannah, the customers at Hilton Head were asking a lot of questions to the staff. For example, they asked if they sold rain jackets, what sales were going on, and if there was a North Face store at the outlets. The overall experience and technology were both lacking in Under Armour.

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The last store located in the Tanger Outlets Savannah was ASICS. The store atmosphere was welcoming, and the overall feel was clean and pristine. Every item was well presented and replenished. The music playing was old school and the size of the store was quite smaller than its competitors. The clothes were located at the front of the store and the shoes in the back. The seating they offered was sparse, with only 2 small one-person benches for customers to try on shoes. The staff wore ASICS gear and were extremely knowledgeable about their products. During observations, the staff explained to customers the difference between their technology versus their competitors and what makes ASICS stand out. The checkout was located in the middle of the store.

Instead of regular cash registers, they used iPads to check out their customers.

Only two customers came into the store during the duration, which ended up having a 1 out of 10 for foot traffic. Both customers were looking for specific items but ended up not purchasing anything. Overall, ASICS was up-to-date with their technology, but there was a lack of foot traffic.

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One of the stores located at just the Tanger Outlets Hilton Head was Adidas.

The store atmosphere was pleasant; employees were greeting the customers and they had pop music playing in the background. The staff was wearing Adidas gear. This store was extremely tiny compared to its competitors. The men’s section was on the right and the the women’s/kids on the left, with a very limited selection. The shoes were located in the back, with a lot of display shoes missing price tags. Even though the store was tiny, they still offered 6 one-person benches for their customers to try on sneakers. Their checkout was in the left-hand corner and they had both cash registers and mobile devices, but the mobile devices were used infrequently. During store observations, the customers were mostly older men in their fifties and parents with their children. Many customers were looking for specific products: sneakers and t-shirts. There wasn’t a lot of foot traffic, so they received a 3 out of 10. Adidas didn’t offer a variety of products for women compared to their competitors and it showed when mostly men were shopping inside the store.

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The last store in the Hilton Head outlets was The North Face. The store atmosphere was peaceful. There was an employee standing right by the door to greet customers and answer their questions. Every employee was wearing North Face gear. The North Face played background music that was a mix of genres. For their product display, the women’s section was on the right and the men’s section was on the left, with kids in the back. Most of their sale items were in the middle of the floor and full price on the walls. They divided their product into categories: rainwear, fleece, and insulated. The foot traffic in the store was slow, receiving a 2 out of 10. The North Face did not offer any seating for customers unless they physically went into the fitting room. They had 5 registers to check customers out, but if they wanted to order online the associate would have to use an iPad. During store observations, the customers were older couples or parents with their children. The parents and their kids were specifically looking at jackets, while the older couples seemed to be browsing.

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The last store observation was done at Victoria’s Secret at the Oglethorpe Mall. The store atmosphere was a little disorganized. Many of the clothes were displayed sloppily and not in the proper place. The music was contemporary and upbeat; customers were singing along to the songs. The staff was very attentive and helpful. They wore all black and looked professional. The employees greeted customers as they walked in and asked them what they were shopping for. The store was divided into 6 different rooms. Victoria Sport was located in the very first room on the left side. For checkout, they had 7 registers in the back. Each side of the store also had a mobile device, which was used to checkout customers with small items, look up items online, and see if customers qualified to receive an Angel card (store credit card).

They had stools for customers who wanted to relax in the fitting room and to on the floor. During in-store observations, all of the customers in the store were women because they don’t sell activewear for men. The foot traffic was a 4 out of 10. The customers ranged from teenagers to older women in their late fifties. Most of the customers were browsing the sports bras and leggings commenting on how they liked the variety of colors and prints. Many of the customers did not purchase anything or have questions.

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Lululemon’s in-store observation was done on Broughton Street in Savannah, Georgia. The store atmosphere was very chaotic. The music was blasting in the background, so that it was difficult to have a conversation. A positive factor was that they had a table offering water and mimosas to their customers. The space itself was small and a little cramped in certain sections. When you first walk in, there is a table with flowers, clothes, and accessories, so you either have to go right to the men’s section or left to the women’s section.

Most of their accessories were next the register offering a variety of yoga mats, headbands, hats, book bags, and water bottles. Their men’s shorts and pants were located in cubes at the front of the store and the women’s leggings in the back with the fitting rooms, and a small rack of clearance. All of their fitting rooms have a white board on the outside, so when a customer tries something on the associate will ask them their name and write it on the white board as a way of connecting to the customer. This is one way that Lululemon stands out from their competitors. Outside of the fitting rooms they had a desk and two stools for customers to sit on and a water fountain in case they got parched. Employees were not greeting customers when they came in. They were also dressed very unprofessional.

Some employees were in non-Lululemon t-shirts, hats, and looked disheveled as if they had just finished a workout. Most customers didn’t even realize they worked there and thought they were other customers shopping around. The overall foot traffic was a 4 out of 10. During in-store observations, the customers shopping consisted of an older demographic along with millennials. Customers seemed to just be browsing the clothes, especially the clearance, but not purchasing anything. Numerous customers were asking employees for a fitting room and one customer was being measured so they could hem her long sleeve shirt.

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Focus Group

A focus group was conducted to gain more insight about the Brazilian consumer. The group consisted of both males and females ranging from ages 19 to 32. All consumers partake in a variety of physical activity ranging from lifting, dancing, soccer, Zumba, yoga, and running. They all exercise at least 3-4 times a week for 1-2 hours. One question the group was asked was “how do you shop for athletic apparel?” All members said they shop for athletic apparel through brick and mortar stores because they are able to see the apparel and physically try on the clothing. When asked, “What do you look for when purchasing activewear?”, the majority answered comfort, design, and high quality. They were also asked to rate comfortability, quality/durability/ stylish/ fashionable, color, and price in order of what is most important to them when purchasing activewear of 1-5 (1 being most important 5 being least important). Every person rated comfortability as the most important to them when purchasing activewear. The second most important characteristic was a tie between stylish/fashionable and price. Half of the focus group knew the brand and recognized the logo, while the other half had never heard of Lululemon. When asked where else they shop in Brazil, the group said Nike, Adidas, Track&Field, and Forever 21. When purchasing activewear, the majority said they would spend around $60-$100 and buy new activewear every month. Each person said they would shop at Lululemon if it was in Brazil. Other comments made were that they believe it would be successful because Brazilians love American brands and yoga and Pilate’s are extremely popular in Brazil, specifically in the bigger cities of Rio de Janeiro and Sao Paulo. One of the main reasons is due to Brazilian consumers caring about their appearance and wanting to always look their best.

There are an exorbitant amount of gyms in Brazil and the demand for a fit healthy lifestyle is high. The warmer weather in those cities also contributes to consumers wanting to engage in physical activity. Lastly, the group consensus was if that if a product is good, they are willing to spend the money on it.

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Interview

The last form of primary research was an interview with Lululemon’s store manager Brit, as a way to gain further insight about the brand. Lululemon offers yoga classes a couple of times a month in their store. They also include massages and food and drinks as a way to attract more customers to join in. Being that their target consumer is predominately female, as a way to appeal to the male customer, they have hosted the event “Yoga Just for Men.� Lululemon will bring in yoga instructors from around the local area to teach the classes. This really allows everyone to connect to their local community and meet other people in their area who share the same passions. They have also done an event in Forsyth Park to change up the scenery for classes and get people outside to enjoy the lovely Savannah weather. They promote all of their events through their customer email list, as well as, on their Facebook page.

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Key Takeaways 1. Brazilian consumers are more cautious with their spending habits, but are willing to splurge on personal care products and items where they deem the price justifiable.

2. Comfort is most important when Brazilian consumers are shopping for activewear.

They also keep in mind how fashionable it is and the price point.

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Key Takeaways 3. Healthier lifestyles and exercise habits are key elements that will continue to drive sales performance of the activewear market in Brazil.

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4. Brazil’s Internet users spend more time browsing on social media than all other Latin American countries on a daily basis, mastering the social media landscape is the best way to attract consumers and boost brand engagement, loyalty, and sales in Brazil.

Strategy The strategy will be based on the key takeaways from the primary and secondary research. This will, in turn, help to create a successful IMC plan for Lululemon. Marketing strategies will be divided into placement, product, price, and promotion to distinguish Lululemon from its competitors.

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Placement - Village Mall

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Choosing the right location for Lululemon’s pop-up shop will be essential to the overall success of this geographic expansion. The pop-up shop will be located in Village Mall. This exclusive shopping center is in Tijuca, one of Rio’s most elegant neighborhoods and is a part of the BarraShopping complex. The Village mall brings a mix of the best national and international brands of fashion, culture and food. Village Mall opened on December 4th, 2012. The mall includes a theatre: the Bradesco Village which has a capacity of 1,060 people, along with 4 VIP movie rooms. It has a space for events of 1,560 m² and restaurants on the terrace overlooking the Barra da Lagoa. The mall has 105 stores spread across three floors. When building the Village Mall, they wanted the outside to be just as grand as the inside. Overall, they had 8,000 m² of glass in skylights and atrium’s to allow in the most natural light as possible. “In 2011, it received the VIII Grand Prize for Corporate Architecture, as a highlight of the commercial sector, category building project. In 2014, it also received the award for Best Project and Development: New Ventures and Sustainable Design, from ICSC (International Council of Shopping Centers)” (Village Mall). The mall is a strong complement to the BarraShopping complex, the New York City Center and the BarraShopping Business Center (Village Mall). It is located near the Universidade Estacio de Sa, terminal Alvorada train station, Barra de Tijuca Airport, Jacarepagua Airport, and Aeroleo taxi service.

Area attractions include the New York City Center, Barrashopping mall, amusement parks, Barra de Tijuca beach, and Rio helicopter tours.

The Village Mall even offers a VIP program to its customers allowing access to exclusive experiences and privileges the VIP lounge has to offer. For example, special courses, and tastings, conferences and workshops, entertainment and culture, and exclusive services. Once you sign up and shop, all you have to do is show your receipts to the concierge and credit your points. For each Brazilian Real 1,00 you earn one point. Once you reach a certain number of points you are able to cash them in for vouchers and tickets for shows, spas, and dinner. They also offer a company program called Clube Empresa aimed to offer special advantages to employees of organizations that are in the region of the enterprise. As a benefit they receive discounts on numerous stores. Lululemon stores are located in well-off areas or high-end shopping centers. Overall, this is a great location that will attract the target customer and bring them into

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Placement

This pop-up shop will be open for three months from December to February. This is considered summer in Brazil, as the school year typically begins during the first week of February and ends the first week of December. Also taking place during this time period, is Carnaval in Rio de Janeiro. Carnaval is known as the Mardi Gras of Brazil. It is a week-long celebration that people from across the globe come to see. “More than 1.5 million tourists attend Carnaval and fill the streets often wearing masks and colorful costumes, while dancing to the beats of drums and music” (Statista). As lots of tourists and people will be in Brazil, this will be the perfect opportunity for the pop-up shop to be open.

A floor plan and design-branded retail space will be created through Roomstyler to showcase what the pop-up will look like. It will be 1,600 square feet, located on the first floor of the VillageMall, next to Osklen and Gucci. Community is at the heart of who Lululemon is and that’s something they want to translate into their stores. The goal is to create a “community hub”, but still differentiate each individual space by taking in influences of the local culture. The overall feel will be clean and minimalistic with the use of wood and accents of white.

Being that the Amazon Rainforest plays such a huge role in Brazil, the pop-up will incorporate a lot of greenery and plants. The goal is to give the customers of sense of being in a luscious environment like the Rainforest. Lululemon wants to address the trend of a “hangout space,” creating an environment where people can not only shop, but also work and socialize. Fixtures will have outlets and shoppers will have access to free Wi-Fi as a way to promote the community hub. The store will also have a “Instagrammable wall” with a hanging chair for customers to pose on, and a water wall in the background. This will give them a different photo opportunity for social media and help raise awareness about our pop-up shop. All photos that tag the brand and use the hashtag #thesweatliferio will be entered in a contest to 58 win a Lululemon gift card.

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Product

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Product

An assortment plan will be produced to show the variety of items in the pop-up shop. The Lululemon website is divided into 6 activity categories: running, training, yoga, office / commute, swim, and golf. Being that Lululemon is a lifestyle brand and the Brazilian consumer is very active, there will be products for every activity with the exception of golf because it is not a popular sport in Brazil and it is only offered for men. The assortment plan will showcase Lululemon’s most popular pieces specifically in tops, bottoms, intimates, accessories, and swimwear that focus on a combination of comfort and fashion. Normally swimwear is an online exclusive, however, being that Rio’s climate is warm most of the year and close to the beach, this is the perfect opportunity to attract consumers to the space. The products will be sold through three channels: the pop-up shop, website, and app.

Assortment Plan

Women's Products Cool racerback II Swiftly tech short sleeve crew Love tee V Love sleeveless tank Non stop bomber Swiftly tech long sleeve crew Define jacket Tracker short V Hotty hot short II Wunder Under High Rise 25" Wunder Under High Rise 28" Align crop 21" Fast and free tight 25" Energy bra Enlite bra Free to be bra Free to be wild bra Namastay put thong II Namastay put hipster Simply there cheeky bikini Mula bandwear bikini Beach boss bikini top Beach boss low rise bikini bottom Clear waters bikini top Clear waters high rise skimpy bottom Clear waters mid rise med bottom Poolside pause one piece Coastline One piece Will the wave long sleeve one piece Reversible mat 5mm The towel Uplifting scrunchie On my level duffel Men's Products Mental vent tech short sleeve Evolution polo Mental vent tech long sleeve 5 year basic tee Mental vent tech muscle tank ABC pant classic 34" ABC pant slim warpstreme 34" ABC pant slim warpstreme 32" Surge shorts 6" T.H.E short 9" Always in motion boxer 3 pack 5" License to train boxer 7" No boxer boxer 3 pack 5.5" Current state board short 9" Namaste at the beach short 8" Channel cross swim short 7" Channel cross swim short 5" Lightspeed run hat Intent crew sock 3 pack No sock sock 3 pack Command the day backpack

Category Price (USD) Price (BRL) tops $ 48 196 BRL tops $ 68 278 BRL tops $ 48 196 BRL tops $ 38 155 BRL tops $ 128 524 BRL tops $ 78 319 BRL tops $ 118 483 BRL bottoms $ 58 237 BRL bottoms $ 58 237 BRL bttoms $ 98 401 BRL bottoms $ 98 401 BRL bottoms $ 88 360 BRL bottoms $ 128 524 BRL intimates $ 52 213 BRL intimates $ 98 401 BRL intimates $ 48 196 BRL intimates $ 48 196 BRL intimates $ 18 73 BRL intimates $ 18 73 BRL intimates $ 18 73 BRL intimates $ 18 73 BRL swim $ 68 278 BRL swim $ 68 278 BRL swim $ 68 278 BRL swim $ 68 278 BRL swim $ 68 278 BRL swim $ 118 483 BRL swim $ 128 524 BRL swim $ 128 524 BRL accessories $ 68 278 BRL accessories $ 38 155 BRL accessories $ 8 35 BRL accessories $ 158 640 BRL Category Price (USD) Price (BRL) tops $ 68 278 BRL tops $ 88 360 BRL tops $ 78 319 BRL tops $ 58 237 BRL tops $ 58 237 BRL bottoms $ 128 524 BRL bottoms $ 128 524 BRL bottoms $ 128 524 BRL bottoms $ 68 278 BRL bottoms $ 68 278 BRL intimates $ 68 278 BRL intimates $ 38 319 BRL intimates $ 58 237 BRL swim $ 98 401 BRL swim $ 88 360 BRL swim $ 78 319 BRL swim $ 78 319 BRL accessories $ 38 155 BRL accessories $ 38 155 BRL accessories $ 38 155 BRL accessories $ 148 606 BRL

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Price

Product Tops Bottoms Intimates Swimwear Accessories

Competitor Price Comparison Nike 90-500 BRL 80-500 BRL 90-500 BRL 180-280 BRL 30-400 BRL

Adidas 50-650 BRL 50-500 BRL 50-400 BRL 100-350 BRL 10-600 BRL

Track&Field 100-450 BRL 140-270 BRL 120-180 BRL 69-259 BRL 30-400 BRL

Asics 100-500 BRL 100-300 BRL 130-230 BRL 10-100 BRL

Lululemon 120-650 BRL 155-600 BRL 50-550 BRL 250-550 BRL 35-650 BRL

The price of the products will be based on our competitors’ prices, exchange rates, as well as the cost of living in Brazil. The goal is for Lululemon to remain competitive with existing brands, but also maintaining its luxury status. Prices will be as follows: tops ranging from 120-650 BRL, bottoms 155-600 BRL, intimates 50-550 BRL, swim 250-550 BRL, and accessories 35-650 BRL. Lululemon will also be partnering up with a local payment partner and accepting local payment methods for example, Boleto Bancario and domestic cards. This will allow all customers to be able to purchase Lululemon while still immersing the brand into the culture and gaining the consumers’ trust.

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Floor Plan

Entrance

Instagram Wall

Product

Product

Product

Community Hub Fitting Room Area Bathroom Backroom Checkout Fitting Rooms Storage 63

Front View

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Community Hub

65

Clothing space

66

Checkout Area

Fitting Room Area

67

Instagram Wall

Fitting Room

68

Backroom

Storage

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Human Resources Manager

Full Time

Part Time

Human Resources

Employees Manager Staff - full time Staff - part time 70

Hourly Rate Hour/Week Total Pay $ 23.16 40 $ 926 $ 19.30 40 $ 772 $ 19.30 3 $ 58 $ 1,756 14 $ 24,588

Promotion - ambassadors

Juliana Luna

Christian Coelho

Paola Crespi

Brand ambassadors are key part of Lululemon’s overall success. Lululemon takes an unconventional approach and chooses people “who create community, provide feedback on product and partner with Lululemon on social impact programs” (Fernandez). For the pop-up shop in Rio de Janeiro, Lululemon will choose three brand ambassadors.

The first brand ambassador is Juliana Luna @julianaluna. She has 40.5K followers on Instagram. “Rio de Janeiro-based Luna isn’t a blogger per se, but rather an artist, stylist and consultant who co-founded a global platform for women called Project Tribe. Her feed reveals her penchants for activism, travel and maximalist style” (Fernandez). She also is a certified yoga teacher and meditates regularly.

The second ambassador is Christian Coelho @christiancoelhoyoga. He has 2.5K followers on Instagram and was born and raised in Brazil. He was initially trained in Ashtanga & Rocket Vinyasa Yoga and found inspiration in the slower and intuitive style of Forrest Yoga. He graduated from SOAS University with a Master’s Degree in Yoga History & Philosophy. After being based as a yoga teacher in London for over four years, he moved back to his home-city of Rio de Janeiro to open his yoga studio in 2018, called Casa 111. Currently, he is teaching classes, workshops and assisting TT courses in Brazil and internationally. He is also the founder of Rueda de Janeiro, which is a Cuban dance group that organizes classes, events, and parties around the city.

The third ambassador is Paola Crespi @paolacrespi_gym. She has 68K followers on Instagram. She is a 43-year-old, married, mom of two.

Even with a lot on her plate she still works and makes time to train. She is a life coach as well as a CrossFit athlete. Paola demonstrates how even at an older age you can still be in amazing shape. She remains extremely active, while still spending quality time with her family.

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Launch Plan

Sponsorship Instagram Facebook Twitter Pinterest Email Yoga session beach Yoga session lake Boxing session julianaluna christiancoelyoga paolacrespi_gym Event

Pre Launch September October

Launch Plan November

December

Launch January

Febuary

March

Post Launch April

May

The objective of the promotions is to increase awareness about the geographical expansion into Brazil and to encourage consumers to visit the pop-up shop. The launch plan will showcase what Lululemon will do during pre launch, launch, and post launch. Within the promotional strategy, Lululemon will use influencer’s and ads on social media as a way of advertising the pop-up shop. One of the key takeaways from the primary and secondary research was mastering the social media landscape in Brazil because Brazil’s internet users spend more time browsing on social media than all other Latin American countries on a daily basis. This is essential to attracting customers, boosting brand engagement, loyalty and sales throughout the launch.

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Store Ambassadors julianaluna christiancoelhoyoga paolacrespi_gym Total

Cost - Per IG Post $ 200 $ 20 $ 260

Social Media Advertising Instagram $ Facebook $ Total Total advertising cost Months Influencers Advertisments on IG/FB Total

Budget

10 12

Sep, Oct, Nov $ 490 $ 1,092 $ 1,582

Advertising

Cost - Per IG Story # of IG Posts # of IG Stories Total Cost $ 50 4 1 $ 850 $ 5 4 2 $ 90 $ 65 4 1 $ 1,105 $ 2,045 Duration 3 days 4 days

December $ 595 $ 468 $ 1,063

# of Ads 28 28

January $ 480 $ 312 $ 792

$ $

Cost

840 1,344

February $ 480 $ 312 $ 792

Total Cost $ 840 $ 1,344 $ 2,184 $ 4,229

$

4,229

MEDIA BUDGET ALLOCATION

27% Ambassadors 50%

Instagram Facebook

23%

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Pre Launch Pre-launch will focus on creating buzz and hype about the expansion through social media platforms like Facebook, Instagram, and Twitter. Lululemon will post on their social media as well as putting ads up on Facebook and Instagram specifically targeting men and women, ages 18-45 in the Rio de Janeiro area, who enjoy yoga, meditation, running etc. The three ambassadors will post about the upcoming opening on their Instagram’s. Lululemon will also sponsor the 2019 Ironman held in Rio de Janeiro on September 22, 2019.

Lululemon’s customer is an active individual, who partakes in a variety of physical activity. The people participating in the Triathlon are a part of the target demographic Lululemon is trying to reach. Three kinds of limited edition Ironman Marathon branded water bottles by Lululemon, will be available.

The bottles will be inspired by the Amazon Rainforest with different prints to attract all age groups. Race participants will be able to pre order their items for pick-up with their race packets. Both Lululemon and Ironman will post this on their social media platforms. This will also allow Lululemon to raise brand awareness to their target demographic before the opening in December.

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Launch - Event Hotel Santa Teresa

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Total Products (mechandising mix) Tops Bottoms Intimates Swim Accessories Total

100% Avg Retail Price $ 75 $ 100 $ 40 $ 80 $ 30

Expenses Cost of goods sold Human resource expenses Marketing Rent of the mall Promotional launch event Pop-up shop renovation Utilities and maintenance Total Expenses Operating Income Human Resources Manager Staff - full time Staff - part time

Marketing Influencers Advertisments on IG/FB Total

$

AVG Unit - DEC 1,067 1,200 2,000 1,000 1,333 Sep, Oct, Nov

Hourly Rate $ 23.16 $ 19.30 $ 19.30

Sep, Oct, Nov $ 490 $ 1,092 $ 1,582

Promotional Launch Event Venue + (catering included) $ Fashion show $ Invitations + wax seal $ Total $

7,581 10,000 400 17,981

400,000

$

1,582

$

50,109

Hour/Week 40 40 3

$

105,000

AVG Unit - JAN 280 315 525 263 350

$

112,500

AVG Unit - FEB 300 338 563 281 375

$ $ $ $ $

December 188,000 8,196 1,063 64,944 17,981

$ $ $ $

January 49,350 8,196 792 64,944

$ $ $ $

February 52,875 8,196 792 64,944

$

400

$

400

$

400

14

$ $ $ $ $

December $ 595 $ 468 $ 1,063

$ $ $

Total 1,647 1,853 3,088 1,544 2,058 10,189 $ $ $ $ $ $ $ $ $

Total 290,225 24,588 4,229 194,832 17,981 50,109 1,200 583,164 34,336

Two days before the official opening of the Total Pay pop-up shop, Lululemon will host a launch party on Saturday November 30th at 6pm.

926 It will be hosted at the beautiful Hotel San772 ta 58Teresa in Rio de Janeiro. Invitations will be sent out to Lululemon ambassadors, in1,756 fluencers, and the media, with the goal to 24,588 receive a lot of coverage about our launch event. A fashion show will take place on the January rooftop February lounge area as a way to showcase 480 $ 480 will be available in the the products that 312 $ This will 312 pop-up. give the guests a first-hand 792 $ 792 $ 4,229 and food look at the merchandise.

Drinks will be served to guests. Our ambassadors will post about the launch party on their Instagram stories. The objective of the launch event is to continue building our presence and brand awareness about the products and pop-up shop.

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Launch Event - Ig Stories

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Launch

The launch of the pop-up shop will be in December. It will be live streamed on Facebook and Instagram, allowing more people to be a part of it. Brand ambassadors, celebrities, influencer’s, and the press will be invited to the opening. The 3 store ambassadors will post about it on their social media pages. This will allow Lululemon to reach a broader audience and get customers excited about the launch. Champagne and hors d’oeuvre will be served, along with a raffle to win gear and plant succulents. Once officially open, Lululemon will keep track of their customers through CRM. It will keep track of their information and purchases. Direct emails will be sent to customers to inform them about new arrivals, events, and promotions going on. Some of the events Lululemon will host are two free yoga sessions: one at the beach and one at the lake beside the Village Mall, Barra da Lagoa. Local instructors and brand ambassadors will come teach the classes. As a way to attract our male consumers, the pop-up shop will also host a boxing class in the store.

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Post Launch During post launch, Lululemon will be continue to promote their products through social media and encouraging customers to purchase online. To keep the engagement post launch, Lululemon will post the background stories of their brand ambassadors on Instagram IGTV, as a way for consumers to get to know and connect with them. Through social media, Lululemon will host the “Sweaty Pursuit” contest on Pinterest. Participants must follow Lululemon on Pinterest and launch a new Pinterest board entitled "My Sweaty Pursuits" and pin at least ten items that represent their sweaty pursuits (two of which need to be pinned from Lululemon social media), all tagged with #sweatypursuits and #lululemon. To submit their entry, pinners will be required to comment on the contest’s pin with a link to their pinboard. Entries will then be judged by a panel of Lululemon executives based on criteria including originality, creativity, adherence to the rules, and "a general sense of the Lululemon’s aesthetic." The winner will be rewarded will a free item from Lululemon.

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Measuring Success Lululemon will measure the success of the overall pop-up shop through four ways: social media, direct email, classes, and PR & events.

Tracking will start just before the beginning of the pre-launch in order to obtain a pre-campaign benchmark. It will continue until the end of post launch. The focus will be on the brand awareness raised, not the overall profit. One goal is to increase brand engagement by 10%. Another goal is to test the Brazilian market to see if Lululemon can gain enough traction and awareness to open up and brick and mortar store.

Social Media (Instagram, IGTV, Facebook, Twitter, Pinterest) Objective - Creating brand engagement by providing consumers with content that will grab their attention and create buzz - Getting the consumers excited about the pop-up shop - Reach more people within the demographic through ads and influencer’s Task - Posts on influencer’s accounts - Live streams of our opening and launch event - Sneak peek shots of the store and product Lululemon will be selling Measurement - Number of followers gained - Number of impressions on social media (likes, views, comments, shares) - Number of mentions and use of our hashtag #thesweatliferio - Number of participants in the “My Sweaty Pursuit” contest

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PR & Events (Launch Event, Sponsorship) Objective - Create brand awareness about Lululemon’s pop up shop to the target demographic - Get them excited and familiar with the products - Create hype through influencer’s, ambassadors, and the press Task - Booth at the Ironman Triathlon - Offering 3 different kinds of limited-edition water bottles - Launch event at the Hotel Santa Teresa - Fashion Show Measurement - Number of tags and mentions - Number of visitors at the booth - Number of water bottles sold - Number of articles and press about the pop-up

Classes (Yoga on the lake, Boxing for men)

Social Media (Direct Email)

Objective - Attract the male consumer to Lululemon - Attract new consumers to the brand - Obtain brand loyalty through repeating customers - Create a sense of community

Objective - Keep the customers updated on the pop-up and brand - Inform customers about new arrivals, promotions, and events - Attract customers to the pop-up

Task - Yoga next to Lagoa de Tijuca - Boxing class inside the store Measurement - Number of attendees at both events

Task - Send effective and enticing emails to consumers Measurement - Number of visitors through email 83

Operating Income

Financial Plan

Location Foot Traffic Per Month Percentage of Conversion Traffic

4,000,000 0.02 Month December Footfall 80,000 Conv % 0.05 Avg Basket $ 100 Total Revenue Financial Plan $ 400,000 4,000,000 $ 3,000,000 COGS 188,000

Financial/Assortment Plan Location53%) Foot Traffic Per Month (MKUP Percentage of Conversion Traffic Product Tops Footfall Bottoms Conversion % Intimates Average Basket Swim Total Revenue Accessories Cost of Goods Sold Total Gross Margin Expenses(mechandising mix) Products Human resource expenses Tops Marketing Bottoms Rent of the mall Intimates Promotional launch event Swim Pop-up shop renovation Accessories Utilities Foot and Traffic maintenance Location Per Month Percentage of Conversion Traffic Total

% 20% 30% 20% 20% 10% 100% Sep, Oct,Price Nov Avg Retail $ 75 $ 1,582 $ 100 $ 40 $$ 80 50,109 $ 30

Total Expenses Operating Margin Expenses

Cost of goods sold Human resource expenses Marketing (MKUP Rent of53%) the mall Product Promotional launch event Tops Pop-up shop renovation Bottoms Utilities and maintenance Intimates Swim Total Expenses Accessories Operating Income Total

Human Resources

Products (mechandising mix) Manager Tops Staff - full time Bottoms Intimates Staff - part time Swim Accessories Total

% 20% 30% 20% 20% 10% 100%

$ $ $ $

2% December $ 80,000 $ 5.00% $ 100 $ 400,000 $ 188,000 $ 212,000

$ $ $ $

December AVG Unit January - DEC AVG 8,196 $ 8,196 $ 1,067 1,063 $ 792 $ 1,200 64,944 $ 64,944 $ 2,000 17,981

Financial Plan

Hourly Rate

$

$ $ $ $

2,500,000 0.009 February 22,500 0.05 $ 100 Total Revenue $ 112,500 $ 52,875

0.9% February 21,000 $ 22,500 31,500 $ 5.00% 21,000 $ 100 21,000 112,500 $ $ 10,500 52,875 $ $ 105,000 59,625 $ $

22,500 33,750 22,500 22,500 617,500 11,250 290,225 112,500 327,275

February Total- FEB Unit - JAN AVG Unit 8,196 $ 24,588 280 300 792 $ 4,229 315 338 64,944 $ 194,832 525 $ 563 17,981 1,000 263 $ 281 50,109 1,333 400 $ 3502,500,000 400 $ 3751,200 3,000,000

Human Resources Manager time Location FootStaff Traffic- full Per Month Staff part time Percentage of Conversion Traffic

Hour/Week Total Pay AVG Unit - DEC AVG Unit - JAN 40 $ 1,067 926 280 40 $ 1,200 772 315 525 3 $ 2,000 58 263 $ 1,000 1,756 1,333 350 14 $ 24,588

7,581

AVG Unit - FEB 300 338 563 281 375

January February 49,350 $ 52,875 February $ 480 8,196 $ 4808,196 312 $792 $ 312 792 64,944 $ 64,944

792

$

400

792

$

$

400

Total 1,647 1,853 3,088 1,544 2,058 10,189 $ $ $ $ $ $ $ $ $

Total 290,225 24,588 4,229 194,832 4,229 17,981 50,109 1,200 583,164 34,336

Hourly Rate Hour/Week Tota $ Financial 23.16 Plan 40 $ $ 19.304,000,000 40 $ 3,000,000 $ 19.30 0.02 3 $ 0.007 Month December January $ Footfall 80,000 14 $ 21,000 Conv %

$ $

0.05

0.05

Avg Basket $ 100 $ 100 617,500 Total Revenue Total Revenue 290,225 Marketing cost of goods sold cogs %. Was 47 Sep, Oct, Nov December Jan $ 400,000 $ 105,000 $COGS 490 $ 188,000 595 $ 49,350 (MKUP 53%)Influencers $ $ Product Advertisments on IG/FB% $ 1,092 $ 468 $ Tops 20% $ $ Total $ 1,582 $ 80,0001,063 $ 21,000 Bottoms 30% Intimates 20% Swim 20% Promotional Accessories 10%Launch Event Total 100% Venue + (catering included) $

Fashion show

Marketing Influencers Advertisments on IG/FB Total

$ $ $ $ $ 7,581

$ $ $

Products mix) Avg Retail Price Total (mechandising Invitations + wax seal Tops $ 75 1,647 Total Bottoms $ 100 1,853 Intimates $ 40 Swim3,088 $ 80 Accessories $ 30 1,544 Total2,058

400 $ 4,000,000 0.02 0.007 0.009 10,189 Expenses Month December January February $ 292,939 Cost of goods sold Footfall 80,000 21,000 22,500 $ 34,336 Sep, Oct, Nov December January February Total resource expenses Human Conv % 0.05 0.05 0.05 $ 100 188,000 $100 $ 49,350 100 $ 52,875 $ Marketing 290,225 Avg Basket $ $ of the mall $ 8,196Revenue $ 8,196 $ 8,196 $ Rent24,588 Total Revenue Total Total Revenue Assortment Plan Promotional $ $ 112,500 $ 1,582 $400,000 $ 1,063 105,000 $ 792 $ $ 617,500 792 $ 4,229 launch event Pop-up shop renovation COGS $ 188,000 $ 49,350 $ 52,875 $ 290,225 cost of goods sold cogs %. Was 47 $ 64,944 $ 64,944 $ 64,944 $ Utilities 194,832 and maintenance $ 17,981 $ Total 17,981 Expenses $ 80,000 $ 21,000 $ 22,500 $ 50,109 $ Operating 50,109Income $ 120,000 $ 31,500 $ 33,750 $80,000 $ 400 21,000 $ 40022,500 $ 400 $ 1,200 $ $ Resources $ 80,000 $ 21,000 $ 22,500 $ Human 583,164 Manager $ 40,000 $ 10,500 $ 11,250 $ Staff 34,336 - full time $ 400,000 $ 105,000 $ 112,500 Staff - part time

Avg Retail Price $ $ 7523.16 $ $ 10019.30 $ $ 4019.30 $ 80 $ 30

$

$ $ $ $

0.7% January 80,000 $ 21,000 120,000 $ 5.00% 80,000100$ 80,000 105,000$ 40,000 49,350$ 400,000 55,650$

Expenses Sep, Oct, Nov December Cost of goods sold $ 188,000 $ Marketing Sep, Oct, Nov December January Human resource expenses $595 $ 8,196 $ Influencers $ 490 $ Marketing $ Advertisments on IG/FB $ 1,092 $1,582 $468 $ 1,063 $ Rent of the mall $ 64,944 $ Total $ 1,582 $ 1,063 $17,981 Promotional launch event $ Pop-up shop renovation $ 50,109 84 Utilities and maintenance $ 400 $ Total Expenses Promotional Launch Event Operating Income

Venue + (catering included)

3,000,000 0.007 January 21,000 0.05 $ 100 Total Revenue $ 105,000 2,500,000 $ 49,350

10,000 AVG Unit - DEC 400 1,067 17,981 1,200 2,000 1,000 1,333

Sep, Oct, Nov

Hourly Rate $ 23.16 $ 19.30 $ 19.30

Sep, Oct, Nov $ 490 $ 1,092 $ 1,582

Promotional Launch Event Venue + (catering included) $ Fashion show $ Invitations + wax seal $ Total $

7,581 10,000 400 17,981

120,000 80,000 80,000 40,000 400,000

$

1,582

$

50,109

Hour/Week 40 40 3

$ $ $ $ $

31,500 21,000 21,000 10,500 105,000

AVG Unit - JAN 280 315 525 263 350

$ $ $ $ $

December 188,000 8,196 1,063 64,944 17,981

$ $ $ $

January 49,350 8,196 792 64,944

$

400

$

400

14

$ $ $ $ $

December $ 595 $ 468 $ 1,063

$ $ $

Total Pay

926 772 58 1,756 24,588

January

480 312 792

$ $ $

February

480 312 792

Conclusion Lululemon is a retail brand specializing in fitness and healthy lifestyle apparel. Today, Lululemon has become one of the top brands in the athleticwear market. They have created a niche for themselves and filled a void in the market. The North American region has been their main source of revenue, allowing them to become very successful. However, in order to keep growing they must tap into other markets. The South American market is a great opportunity for Lululemon to expand. Brazilian consumers are concerned about their appearance and leading healthier lifestyles. The increase in participation of exercise has driven the demand for athleticwear. Primary and secondary research was conducted in order to gain insights about the Brazilian consumer, their spending habits, and how to best target them. The results showed they are willing to spend the money on a product if it’s high quality, comfortable, and fashionable and social media is the most valuable way to attract the Brazilian consumer. This pop-up shop is aimed to test the market in Brazil and to raise brand awareness about Lululemon, with the goal to open a brick and mortar store in the future and maximize profits.

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Biographical Statement

I was born in a small farming town in the back woods of Pennsylvania, where cable wasn’t even available.

I grew up playing sports as a way to keep myself entertained. My one love was soccer and I got recruited to play in college. I played my freshman year at Albright College in Pennsylvania and studied Fashion Merchandising. However, I realized I wasn’t getting the education I needed and if I wanted to be successful in the industry I had to make a change.

I transferred to SCAD my sophomore year and was studying Fashion Marketing and Management. Being in a new city and college, I wanted to focus all my attention on my academics, so I decided against trying out for the soccer team. I started weight lifting as a way to still stay active and found a new passion. Being a fashion marketing major, I wanted to look polished and sophisticated even in the gym. However, it was a struggle to find clothes that fit my athletic body type and still held up on the performance aspect. Lululemon was the answer I had been looking for. With this project I am able to intertwine two of my passion’s: fitness and fashion.

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Pop up shop costs Quantity Water wall 3 Circle hanging chair 1 Fabric hanging chair 2 Artificial grass 260 feet Hammock 1 Picnic table 1 Peacock Rug 1 Wood stool hub 2 Heracleum light 2 Tv 1 Tv stand 1 Mini fridge 1 microwave 1 Kitchen cabinet w/ sink 1 Hanging wall plants 6 Bathroom sink 1 Bathroom mirror 1 Toilet 1 Waste basket 1 Toilet paper stand 1 backroom lights 2 Backroom table/chairs 1 Display counter 1 Cubed storage unit 4 Lantern light 1 Fiting room stools 3 Leaning mirror 3 Tables 4 Begonia hanging baskets 9 Outside FR stools 3 Fitting room lights 3 Wall shelves 1 Fitting room rug 1 Hanging shelf displays 3 Single shelf display 2 Trouser racks 4 Shirt Racks 3 Shirt Rack 2 1 Fatboy block seat 8 Camellia Tree 1 Sugar cane plant 2 Olive tree 1 Dracena Marginata 1 Kelly pendant light 1 Snake grass 3 Monstera deliciosa 1 Weeping plant 1 Whiteboard 3 POS system 1 Ficus lyrata 1 Galvanized herb plants 1 Greenery bonsai 1 Fern 1 Windows 8 Flooring 1600 sq ft Total

Price $1,000 $300 $150 $30 sq foot $100 $300 $100 $50 5,000 $200 $120 $100 $50 $300 $25 $175 $35 $100 $20 $15 $30 $75 $250 $100 $25 $50 $75 $250 $15 $50 $200 $75 $100 $300 $50 $100 $125 $90 $250 $170 $35 $170 $40 $1,000 $130 $20 $25 $20 $1,500 $150 $50 $30 $11 $1,000 $5.03 sq ft

Total $3,000 $300 $300 7,800 $100 $300 $100 $100 10000 $200 $120 $100 $50 $300 $150 $175 $35 $100 $20 $15 $60 $75 $250 $400 $25 $150 $225 $1,000 $135 $150 $600 $75 $100 $900 $100 $400 $375 $90 $2,000 $170 $70 $170 $40 $1,000 $390 $20 $25 $60 $1,500 $150 $50 $30 $11 $8,000 $8,048 $50,109

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