Case study · Marketing 465 · Community vs. Audience
Lululemon grew by recruiting local instructors, hosting free classes and turning stores into gathering places, which shows that community can be a business model and not just a campaign.
Brand
Lululemon athletica
Year(s)
1998 to present (ambassador program and store classes documented 2012 to 2013; experiential store 2019)
Channel(s)
Local ambassadors, in-store classes and events, experiential retail, store staff
Goal
Build loyalty and word of mouth through local fitness communities
Topic
Community vs. Audience
147
North American stores in 2012 (The Robin Report, 2012)
$1,731
sales per square foot, among the highest in retail (The Robin Report, 2012)
20,000 sq ft
Chicago experiential store with studios, workshop space and a restaurant (Glossy, 2019)
The situation
Chip Wilson founded Lululemon in Vancouver in 1998 and opened its first store in 2000. It entered athletic apparel, a category dominated by giants like Nike that spend heavily on star athletes.
Lululemon took a different path. Instead of paying famous athletes, it went to the yoga teachers, run coaches and trainers in each store’s own neighborhood.
The challenge
A small brand cannot outspend Nike on reach. It can, however, earn trust in a local yoga studio, where people already listen to their instructor about what to wear and how to move.
The question was how to turn that local trust into a lasting relationship with the brand, and not just a one-time sale.
What they did
Lululemon built community into how its stores operate.
- Ambassadors: local instructors and athletes received free clothing and discounts. They met regularly with store managers to give product feedback, appeared on in-store posters and the website, and taught classes (The Robin Report, 2012; Fortune, 2013).
- Free classes: nearly all stores hosted free weekly yoga classes, usually on Sunday mornings (The Robin Report, 2012).
- Educators, not salespeople: store staff were called educators and explained fabric and fit (Fortune, 2013).
- Community events: in 2012 the brand held “The Gospel of Sweat” at Riverside Church in New York, inviting people to “build community” and “celebrate fitness” (The Robin Report, 2012).
- Stores as gathering places: in July 2019 Lululemon opened a 20,000-square-foot store in Chicago’s Lincoln Park with two fitness studios, a lounge and community workshop space, and its first restaurant (Glossy, 2019).
What happened
The approach supported fast growth. By 2012, Lululemon had 147 stores in North America and about $1 billion in sales the prior year, with sales per square foot of $1,731, among the highest in retail (The Robin Report, 2012). Even through its 2013 troubles, the company reported revenue growth of more than 20% a year (Scripps, 2013).
Ambassadors also worked as a feedback loop. Because they wore the clothes while teaching and met with store managers, the company heard about product problems from the people who used the gear most.
Why it worked
Lululemon applied several keys of real community. It put customers first by building around what they already did, which was practice yoga and train. It gave members status: an ambassador’s photo on the store wall is recognition that money alone cannot buy. And it gave up some control by letting local instructors represent the brand in their own voice.
This is the difference between an audience and a community. An audience watches your ads. A community shows up to a Sunday class, talks to each other and brings friends.
Where it gets complicated
Community can turn on you, and it is hard to manage. In 2013 Lululemon recalled yoga pants that were too sheer. Months later, founder Chip Wilson said in a Bloomberg TV interview that “some women’s bodies just don’t actually work” for the pants. The remark drew wide criticism from the brand’s mostly female customers, and in December 2013 the company announced Wilson would step down as chairman.
Some ambassadors also walked away. In a 2013 post republished by Philadelphia Magazine, the owners of Dhyana Yoga explained why they left the program after a year. They said the free in-store classes were often too crowded to teach safely and called the arrangement shallow on both sides. When the people who give a brand its credibility feel used, the community loses its value.
The marketing principle
Community is a business strategy, not a marketing tactic. Lululemon shaped hiring, store design, product feedback and events around local people. That earned loyalty, but it also means the brand’s behavior has to match the values the community signed up for.
Sources
- Do you speak Lululemon?, Fortune (2013)
- lululemon: A Cult, a Phenomenon or Just a Great Brand?, The Robin Report (2012)
- Lululemon makes its biggest bet on experiential retail in Chicago, Glossy (2019)
- Dhyana Yoga: Why We’re Not Lululemon Ambassadors Anymore, Philadelphia Magazine (2013)
- Lululemon gets new CEO; chairman steps down after comments, Scripps News (2013)
Group activity for this case
Local Legends Draft
A short list of local people who could represent your brand and a fair deal for them. A 22-minute group activity. Dr. Morris gives the password in class.
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