Author Ye Jing

Editor sang

Founded less than 10 years ago, its market value soared from1600 million US dollars to more than 40 billion.

Compared with established sports companies such as Nike and Adidas, Lululemon has a very small background in selling yoga pants. Peter drucker believes that if the growth layout is the purpose or result of an enterprise, then the key to promote the growth performance variable is the user. When people sum up the successful experience of this company, they often attribute the secret of its growth to brainwashing marketing: the brand has become a belief, and consumers have become irrational faithful believers.

How did Lululemon in Yoga and the new eyes in LV do it? In the article, Lululemon's marketing rules are explained in detail: on the one hand, build a KOL team to enhance brand trust with professional reputation; On the other hand, by experiencing the exhibition store to reflect the community effect, Lululemon follows the typical law of circle of friends.

They are also yoga pants, and the price is 300 yuan and 1000 yuan. What would you choose?

The retail price of a pair of yoga pants in Lululemon is higher than that in 750 yuan, and the price of Nike tights next door is still hovering in the range of 300-700 yuan. Even so, yoga lovers are still keen to pay for the former.

In fact, the brand starts from positioning and construction in order to realize the premium effect. Tracing back to the reason of Lululemon's high pricing, first of all, it depends on its portrait of the target users: women aged 24-36, with an annual income of more than 80,000 US dollars, high education level, own their own house, exercise for one and a half hours every day, and have a positive attitude towards life.

From 2000 to 2008, the "yoga craze" that swept across the United States made women groups neglected by sports brands emerge.

In Lululemon's eyes, girls under the age of 24 are in their youth and don't need to spend too much money to manage their bodies. In contrast, women aged 24 to 36 are more eager to keep their bodies. Among them, people with high education and economic independence are not only willing to pay a high premium for the United States, but also need the inherent social currency function of high-end products to meet their strong demand for identity information.

By investigating the official website data of various brands, it is found that domestic brands such as Li Ning, Peak and Anta. Most sportswear are generally around 200 yuan, and they often sell new products at a low price through 4-6 discount promotion, thus occupying the market. As for Nike and Adi, the brands that entered the China market in the early days, most of them will offer differentiated products at the price of 200-800 yuan, with a discount of 7-8% during the activity, which depends on agents and distributors.

In contrast, Lululemon's product pricing strategy is different from skimming pricing and differential pricing commonly used by Chinese and foreign sports brands. At the initial stage of sales, the price of its single product yoga pants was 2-3 times higher than that of the market, and there were few activities such as discount promotion and low-priced similar products.

Brand is the sum of consumers' perceptions of every contact in their work and life, which always makes people feel strange. In this way, on the one hand, Lululemon keeps the concentration of users and avoids the psychological gap caused by price reduction; Advertise their strategic strength and high standardization of products, which is actually the reason why fans insist on repurchase.

"Wearing the same as not wearing it" is the most unified feeling of users who wear Lululemon Align series yoga pants. In the early days, Lululemon aimed at the market segment of yoga clothing, and this customer group paid more attention to the fabric quality and elasticity of sportswear and the fit between clothing and body. At that time, there were no professional yoga clothes and equipment on the market, so a pair of breathable ladies yoga pants became just needed.

In the product design, Lululemon has made improvements with reference to various body characteristics, such as stretching the tight vest to cover part of the buttocks, and adding fashion elements such as "hidden bag", "double-sided wear" and "night flash". Interestingly, Lululemon positioned itself as a technology company. By the beginning of 2020, Lululemon*** has nine fabric technologies and produced 22 fabrics with different textures, among which bare tights made of patented materials are the most popular.

Although competitors such as Nike and Adi aimed at women's yoga pants, sports bras and other products and began to set foot in the field of leisure sports, this happened after 20 14, and the lag of decision-making made them unable to fully explore the women's market. But today, Lululemon can still outperform the industry position because of the pricing power derived from brand and product innovation, especially its star product yoga pants category, which is highly similar to Maotai's situation in the liquor industry.

Positioning+marketing+innovation used to be the third axe for Lululemon to occupy the market.

With the normalization of Athleisure, consumers' acceptance of products is getting higher and higher, and brand positioning seems to be no longer as important as it was at the beginning. Today, Lululemon's dynamic P/E ratio is still as high as 46 times. It is true that the enthusiasm of the market stems from its excellent performance. Let's look at some data.

The latest financial report shows that Lululemon's annual revenue increased by 42% to $6.257 billion, and its net profit was $975 million, up 65.53% from $589 million in the same period last year. In the conference call, CEO Calvin Mc Donald said that the price of products will be selectively increased by 65,438+00%, and it is estimated that the sales of Lululemon will reach 7.5 billion dollars in 2022. From the outside world, because Lululemon has high-priced and high-quality products, it is not difficult to raise prices.

Compared with Nike, the leading brand in the industry, and Andema, which is divided into tights, higher pricing makes Lululemon get higher gross profit, which is one of the reasons why the revenue of old brands such as Puma, VF, Skye exceeds Lululemon, but their market value is far lower than it. Lululemon's current assets are stable and strong, and the average collection period is about 4 days, which is much lower than that of Andema's 34 days and Nike's 29 days. In addition, Lululemon has also achieved good results in the level of total assets profitability.

Figure: Comparison of net interest rate and gross profit rate of Nike, Andema and Lululemon.

On the sales side, unlike Nike, Adi and other brands that used to sell through dealers, Lululemon has always adopted the vertical DTC mode, directly facing consumers through community direct stores and direct e-commerce. The advantage of this method is that it not only establishes the customer's loyalty to the brand, but also strengthens the pricing power and profit rate.

In 20 19, more than 70% of Lululemon's income came from self-operated channels. Although the epidemic has impacted the revenue of direct stores, with the rise of the concept of home fitness and the continuous development of e-commerce business, Lululemon's e-commerce business has achieved a contrarian growth, and the proportion of revenue has increased from 29% to nearly 60%, making the overall revenue increase substantially.

Figure: Income of Lululemon from 20 14 to 2022

Undoubtedly, in the post-epidemic era, when the global sportswear market is growing and recovering, such transcripts are handed over to the secondary market, which is quite favored by capital. However, with the increase of product range, problems such as the expansion of internationalization process, intensified competition and channel management have surfaced one after another, which is very similar to Andema's experience, but the latter has stopped growing and once suffered losses in recent years. Similarly, Lululemon is not completely out of the risk zone.

From 2065438 to 2007, the net loss of Andema was $48 million. Kevin plank, then CEO, admitted that the past pursuit of rapid mass production made the cost structure unreasonable and the operation could not keep up.

How to solve it? In terms of product categories, Andema adjusted and focused on men's training, running and women's training products. By increasing low-cost channel sales, clearing inventory has become Andema's way to cope with the crisis. As the distribution scope expanded to some low-priced discount stores, the brand image and reputation were affected, which eventually led to Andema losing its market position higher than Nike and becoming a second-tier international brand.

Did Lululemon take any measures to reduce the price?

Official website shows that according to the style, series and color, Lululemon can reduce the price of a few products by 300-500 yuan, and most of them have been sold out. Compared with other sports brands in special festivals, Lululemon's price reduction is very restrained. Although there are many discounts on price adjustment, the reduction in quantity has played a role in hunger marketing.

From this point of view, since we want to be a full-category consumer brand, it seems that Lululemon's game of increasing prices instead of reducing prices deviates from the mass line. But in fact, in the process of product diversification and expansion, Lululemon has lowered the overall price bottom line.

According to the existing product matrix in official website, Lululemon has six categories of tops, bottoms, shoes and accessories on the basis of "yoga", which extends from a single field to sports forms such as running, cycling, training, swimming and boxing, and expands the categories of office, travel, commuting and personal care, among which more than 20 products for men and women are subdivided.

In the initial stage of category expansion, in 20 19 years, the female business of Lululemon increased by 13%, and the male business income increased by 35%, reaching 220 million US dollars, accounting for nearly 25% of the total business. In the China market, sales of Lululemon increased by nearly 70% year-on-year. E-commerce channel sales increased by nearly 30% to US$ 265,438+07 million, accounting for 24.6% of total revenue. Men's wear, China market and e-commerce have become the new growth engines of Lululemon.

However, although Lululemon, which mainly focuses on yoga clothes, is growing rapidly, its current revenue scale is still far behind that of Nike and Adidas. The latter's enterprise history of nearly a hundred years, whether it is mature and comprehensive product category or SKU number, has an overwhelming advantage over Lululemon. According to the statistics of SWS research, in 20021year, the revenues of Nike and Adidas reached 46.3 billion dollars and 2 133 billion euros respectively, and only in terms of volume, Lululemon was several places behind the first two.

Compared with Nike and Adidas, as a new brand, Lululemon has always advertised its functionality and professionalism, but it is still difficult to feel its product spirit and characteristics in most people's cognition. With the expansion of the audience and potential consumer groups of Lululemon products, a more efficient brand exposure method is imminent.