Lululemon's secrets for beating all the competition

Retailers are racing to catch up to the wildly popular Lululemon.

As athleisure, the trend of wearing athletic clothing as casualwear, becomes more popular, companies such as Nike, Under Armour, and Victoria’s Secret are trying to cash in on the trend.

But Lululemon has an incredibly loyal customer base, and keeps customers coming back through offering events like free yoga classes and running clubs.

This strategy creates what retail expert and author Robin Lewis refers to as “addictive experiences,” on his blog, The Robin Report.

“They are addictive,” Lewis claims, “because each time customers co-create the experience with the brand, they are shaping it to their mood of the moment.” This gives customers “such a rush” they want to come back over and over again, according to Lewis.

Lululemon is also compelling to customers because it stocks very few of each item and updates selections often, meaning shoppers never know what they will find.

This tactic is also effective because some customers might impulsively buy clothes out of fear they will sell out, helping Lululemon sell most of its clothing at full price.

“So, not only does the co-created experience entice them to keep coming back, more often and more quickly for their fix, they stay longer and buy more,” Lewis writes. “Thus it increases the value of the store and everything in it.”

Lululemon girls cheering on the runners.Julia La RocheLululemon offers event that provide a sense of true community.

“[They] had a particular business model…the community, involvement, the way they motivate people in the store.” Erich Joachimsthaler, CEO and founder of Vivaldi Partners, told Business Insider. Joachimsthaler highlighted the importance of “differentiating” one’s brand — a category in which Lululemon has proven successful.

Another trait helping Lululemon stay strong is that its product is solid — further, Lululemon essentially built the athleisure category.

“[Lululemon] provided a good quality product … [they] basically created the category,” Joachimsthaler said.

The brand has distinguished itself by selling high quality products. Some may scoff at the high pricetag for gym clothes, but they might be worth it.

“Lululemon…had discovered earlier [a] better product and better product quality,” Joachimsthaler said. “Companies have avoided [improving the quality of athletic wear] for many, many years.”

These strategies will help Lululemon stay on top — especially as competition emerges.

Lululemon model millennial girl athleisureLululemonYoung women love Lululemon.

Now, everyone else is trying to jump on what Lululemon discovered.

Under Armour has been an obvious competitor for sometime with its female-friendly ad campaigns starring Misty Copeland. Dick’s Sporting Goods launched a label to compete with Lululemon. Levi’s, who won’t budge or sell anything but jeans, has tried to compete by selling more “comfortable” jeans.

Victoria’s Secret has its highly profitable Sport line. And recently, Abercrombie announced it would be extending its athleisure offerings.

But quite simply, there’s not enough room in the market for everyone.

Erich Joachimsthaler, CEO and founder of Vivaldi Partners, warned Business Insider that “six months from now” there will be an “extremely crowded market — it’s already now.”

Lululemon athletica yogawww.facebook.comLululemon offers yoga classes, which people love.

But as more competition emerges, only a few companies are actually valid competitors to Lululemon.

“I think the biggest ones — the biggest company to watch out for, in my opinion, are the [athleisure] brands that come out from the big [companies] — Adidas and Nike and Under Armour, for example,” Joachimsthaler said to Business Insider.

He thinks Under Armour is particularly strong competitor, because like Lululemon, the brand appeals to women’s empowerment. “Under Armour has a most incredible positioning with the Misty Copeland [ad] — ‘I will what I want.'”

“At a scale, it’s those companies that are going to make it difficult for Lululemon,” he said.

Further, while athletic apparel copmanies certainly target teens, athletes, and young women, Joachimsthaler said Luluemon is about more than just a customer — it’s a “mindset.”

“There’s a bit of this empowerment — that mindset of being able to crack through the ceiling, that you can do it, and…that’s to me, the Lululemon position.”

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