Focused customer segments lead to extraordinary sales of garments

Focused customer segments lead to extraordinary sales of garments

By Virginia F. Bodmer-Altura

Most of the offerings in e-commerce and stationary network are many times lacking a specific focus on customers’ requirements, not so at Lululemon the Canadian specialist for yoga inspired apparel. We try to analyse its outstanding success and the findings might suit other companies to more focus on their customers’ needs

Lululemon is a success story in view to exactly positioning the company’s offerings tailor made for its actual and potential customers. The company writes outstanding results and in a row of years which lead to conclusions that might serve other clothing companies as an example to follow.

The company reports strong sales figures even in times when the demand for general apparel is lacking response from customer and it is a very profitable company for the happiness of those having invested in its shareholdings and the company is doing things right and has managed to turn yoga gear into a mini-empire of a market value of USD 10.4 billion with sales in 2011 of just USD 712 million and in the last quarter sales registered a new record of USD 1800 per square feet thus above three times more than Neiman Marcus’s sales for its full fiscal year. Lululemon, in contrast to other apparel companies, is not priding itself to collect data on customers, it does not expand by adding a lot of new stores (but carefully target ones) and it does not offer discounts to add sales but it stores less inventory other than it keeps on its shelves. The secret of such behaviour lays in the distinct attitude to stay in close contact with its customers and to cultivate a sense of scarcity. The engineer behind is CEO Christine Day who took the helm in June 2008 and so far her strategies paid off well for all stakeholders and customers concerned.

Christine Day does not work in the glass palace, no, she takes the time to spend hours each week in Lululemon’s stores observing customers on how they shop. She is also listening to their complaints and using the feedback to adjust products and stores. Before, she has spent 20 years of service to Starbucks (coffee shops). She notes at such visits if a sleeve of a product is too tight for many customers and she immediately cancels future orders for that item. The company has also a specific training for its workers to eavesdrop and in placing clothes-folding tables on the sales floor near fitting rooms rather than in a back room and in that manner the store personnel is overhearing complaints. A chalkboard allows the customer to write suggestions and complaints being sent to headquarter. Her overall attention is to get the products right and to keep the lines scarce in order to sell gears such as Wonder Under Pants, Scuba hoodies and racerback tanks at their full price (95 % of all products) and to condition customers to buy when they see the products instead of waiting (for discounts that are rarely exist on certain products) and she is creating products for fanatical shoppers. New colours and seasonal items have six or 12 weeks life cycles and thus stores feel fresher all the time leading to the fact that sometimes items supposed to have a two month life cycle are already sold out in one week. To countervail this position the company has made some logistical changes in order not to lose additional sales and by focusing on core products that don’t change from season to season such as black yoga pants (never on sale) while keeping limited-time items scarce. Such pants range from USD 78 to USD128 whereas competition sells those in a price range (stationary and online) between USD 25 to USD 50. In addition the returning of items is limited, no products are accepted after 14 days and they must be unwashed, unworn and with original tags.

It is worthwhile also to have a look at the website below because the presentation of Lululemon speaks for itself.

www.lululemon.com


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