Lululemon’s competitive advantages include its brand positioning as a specialist in the production of yoga wear, the high quality of its products, as well as its strong community of loyal customers.
This business corporation was established in 1998 by Chip Wilson in Vancouver, Canada. When he established the brand, Chip focused on making comfortable, high-quality yoga wear available for women.
The store served as a design studio and retail store by day and a yoga studio by night. A considerable number of Lululemon stores still function in a similar way now; the only difference is that more fitness activities aside from yoga have been added such as strength circuits, cross-fit, and boxing.
Lululemon Athletica Inc. has expanded beyond just the sale of yoga wear for women to include other activewear for men as well. These include apparel for running, tennis, cycling, training, and most other fitness-related activities.
They have also included other types of apparel, personal care products, and accessories such as yoga mats, jackets, shorts, shoes, shirts, water bottles, deodorants, shampoo, bags, and undergarments.
As of this year, 2023, the company boasts about 34,000 employees worldwide and over 660 stores scattered across Canada, the United States, Tokyo, Australia, China, and the United Kingdom. The company has two main divisions which are Ivivva Athletica and Lululemon Athletica.
The diversification of the brand has presented additional competitive advantages to Lululemon including a broader market base and increased brand recognition.
Lululemon’s competitive advantages and sales strategy have also aided its consistent revenue growth. The company recorded an increase from its previous revenue of $6.25 billion in 2021 to $8.1 billion in 2022.
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What makes Lululemon unique?
Lululemon is unique due to the unique and high-quality products it sells. These products are the result of the brand’s extensive research, innovation, and development of products that are centered on meeting specific consumer needs.
The company prides itself on developing designs and selling products that are not only stylish but equally comfortable. This is to ensure that their customers can move freely without restrictions.
Lululemon products also prove to be useful beyond fitness activities but for other formal and informal activities as well. It is therefore not uncommon to see people wearing Lululemon apparel to meetings, outings, or even to the market. Thus, the company has carved a niche for itself as a premium athleisure brand.
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Lululemon’s competitive strategy
In order for Lululemon to gain a competitive advantage over its competitors in the activewear and athleisure industry, the company has implemented certain strategies which are commonly referred to as competitive strategies.
The concept of competitive strategy was formulated by Michael Porter in his book titled, Competitive Strategy: Techniques for Analyzing Industries and Competitors where he discussed 3 distinct strategies that businesses could use to distinguish themselves from competitors.
These competitive strategies include cost leadership, differentiation, and focus. Lululemon uses differentiation and focus competitive strategies to stand out in the industry. By implementing these competitive strategies, Lululemon offers high-quality products to a specific consumer demographic.
Lululemon’s differentiation strategy
Lululemon’s competitive advantages are closely linked to its differentiation strategy. Through this strategy, the brand seeks to create and retail products that are distinct from those already obtainable in the fitness clothing industry.
The brand began when the founder noticed that the pants women used for yoga were too thin and became transparent when a person bent over. He therefore wanted to create yoga pants that were of high quality, thicker, and comfortable. He puts it this way:
Transparency was the first issue that I wanted to solve. I believed that if I could solve the transparency problem, address camel-toe, and thicken the fabric to mask any imperfections, I could create a perfect athletic garment for women. If I could get a technical fabric that felt like cotton instead of plastic, then add properties to make it moisture-wicking and anti-stink, I could create the perfect pant. Nothing like this existed in the world.
Chip Wilson
The brand has been able to achieve making this type of yoga pants through consistent research, development, and improvement of its yoga pants. The feedback received from the brand’s customers, ambassadors, and influencers is also actively utilized in product improvement and development.
Through the effective use of the differentiation strategy, Lululemon products have been associated with being able to withstand the rigors of different fitness activities including yoga, running, cycling, and workouts.
Due to Lululemon’s differentiation competitive strategy, the brand provides its customers with high-quality, sweat-absorbing, and long-lasting active wear. This enhances the company’s position as a premium athleisure brand.
Focus strategy of Lululemon
Focus is a key aspect of Lululemon’s competitive strategy. Focus generally involves focusing on the sale of a brand’s products or services to a particular consumer segment, a particular geographic location, or specialization in one segment of the market.
Focus as a competitive strategy rests on the premise that a brand is better able to serve its customers through niching down its target market. Hence, gaining a competitive advantage over other brands whose consumer base is broader.
Through demographic marketing, Lululemon initially focused its products on women who are yogis. Currently, however, the brand has expanded its target consumer base to include men.
Hence, the focus target market of Lululemon now comprises women and men between the ages of 18 to 35 who are fitness enthusiasts and belong to the middle or upper class. This is because only individuals within these social classes can afford Lululemon products due to their high prices which is a type of pricing strategy known as premium pricing.
As a result of focusing on this consumer demography, Lululemon has achieved differentiation in the market because it has been better enabled to meet the needs of this particular target.
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Lululemon competitive advantages
- Specialization in yoga wear and equipment
- Creating athleisure wear
- High-quality products
- Exclusive clothing materials
- Robust digital presence
- Consumer loyalty
- Brand recognition
Specialization in yoga wear and equipment
In 1998 when Lululemon was established, yoga was not as popular as it is today. However, the brand’s founder, Chip Wilson noticed that his yoga class grew from having only 6 students to having 30 students within just one month.
This, coupled with a lack of dedicated yoga apparel led to the creation of the brand that became known as a premium provider of high-quality and comfortable yoga pants.
Lululemon’s dedicated team of designers who also happen to be fitness enthusiasts were able to come up with a unique pant that was thick enough to accommodate an extensive level of stretching without becoming sheer.
The yoga pants are also created from a material, Luon which is lightweight, can wick away sweat from the body, dry quickly, reduce bacteria-causing odors, and feel great on the skin.
These combined features made Lululemon yoga pants the go-to brand for yogists who were looking for pants that made their yoga classes more comfortable by helping them achieve challenging poses without having to worry about their pants becoming sheer or uncomfortable.
The brand also makes other items that are useful for yogis such as headbands and yoga mats. Additionally, most Lululemon stores are also used as spaces for yoga classes in the evenings at the close of business for the day.
The brand’s concentration on a specific fitness activity and its specialization in the creation of comfortable apparel for females distinguished it in the market. This is because most other popular activewear brands like Adidas and Puma had active wear for several sporting activities and were centered on making products for men.
Therefore, specializing in the creation and sale of yoga wear which has been engineered to achieve maximum performance for female yogists is one of Lululemon’s competitive advantages.
Creating athleisure wears
Another Lululemon competitive advantage is its creation of apparel that can easily be used both during high-intensity workouts and other non-fitness activities.
As people got more concerned about keeping fit, pursuing a healthy lifestyle, and achieving a better balance between fitness, work, and leisure; the athleisure industry began to boom.
One way Lulumenon utilizes its competitive advantage in the athleisure industry is by creating apparel that can easily be used both for athletics and leisure.
For instance, due to the fashionable design of the brand’s yoga pants and its high-quality fabric, it has been commonly used by women outside the gym as a statement of their fashion sense as well as a symbol of their high social class.
Another example of how Lululemon has been able to break through in the athleisure industry is through the creation of its bras that could be used both for workouts and as regular undergarments.
Before this, most women struggled with having different sets of bras for the gym and a different set for other activities. This implies that it was impossible to go straight to the gym from work without having a change of bras.
Lululemon solved this problem through its bras which were made from light ultralu. The bra had a feel of not being there when worn and it perfectly suits both high-intensity activities such as running, cycling, and rigorous workouts as well as leisure.
Aside from apparel for women, Lululemon has diversified its product offerings to capture men thereby expanding its market share in the athleisure industry. The company now sells several male apparel including trousers, button-down shirts, coats, sweatshirts, joggers, polo shirts, and jackets.
Due to the diversity of products and the possibility of using these products both for workouts and other activities, lululemon’s competitive advantage in the athleisure industry is unmatched.
High-quality products
The sale of high-quality products is one of Lululemon’s competitive advantages. Right from its inception, the brand has stood out from its competitors due to the high quality of its wear.
Lululemon implements several strategies to maintain the quality of its products. One such way is the strong business relationships the brand has developed with its raw material suppliers and product manufacturers.
The brand gets its fabrics from about 25 different suppliers and collaborates with over 60 manufacturers scattered across North America, Asia, and China. Through these collaborative relationships, Lululemon is able to stringently monitor the quality of raw materials as well as the finished products.
Another strategy that has aided in maintaining the quality of Lululemon’s products is the fact that all the stores that sell its products are owned and directly operated by the brand. As a result, counterfeiting of Lululemon products has been easily tackled.
It additionally creates a certain level of product scarcity which drives demand, consequently, maintaining the brand’s position as a retailer of high-quality premium products. Hence, the quality of Lululemon’s products is an additional competitive advantage for the company.
Exclusive clothing materials
The use of exclusive clothing materials in the products sold by Lululemon is one of the brand’s biggest competitive advantages. Through the company’s innovation and research hubs in Vancouver, Canada, and New York, United States, the company comes up with unique fabric and clothing designs. These fabrics and designs are then produced in large quantities by its raw material suppliers and manufacturers.
The brand has been able to maintain its vast exclusive fabric supply by having several patents to protect the fabric blends it develops. They also have patents to protect their designs.
Currently, in 2023, Lululemon has over 600 patents in about 14 countries including Canada, the United States, China, Australia, and the United Kingdom.
This patent means that other activewear manufacturers and fabric suppliers cannot make or sell the fabrics or designs that have been patented by Lululemon while the patents still last.
In most countries, patents may last up to 20 years from the day they are granted. This gives Lululemon as they have exclusive rights over all fabrics and designs that they patent. In addition, the fabrics or design may become obsolete by the time the patents expire which means other brands cannot benefit from them.
To continue enjoying the competitive advantage granted by patents, Lululemon consistently carries out research to enable them to develop newer fabric blends that they can patent.
The creation of novel products that are patented by the brand continues to provide a competitive advantage for Lululemon since customers will continually be on the lookout for new products from the brand.
Below is a table outlining some of Lululemon’s exclusive fabrics, their features, and the products made from them.
| Fabric | Features | Product |
|---|---|---|
| Boolux | A blend of rayon derived from bamboo, tencel, and cashmere. The fabric is lightweight, warm, soft and breathable. | Sweaters |
| Coolmax | High-rise tights, polo shirts, tank tops, armbands, and tennis dresses. | Bras, shorts, and shirts. |
| Everlux | Quick drying, soft, stretchy, and sweat-wicking. | Tank tops, shorts, bras, tights, cropped pants, and short & long leggings. |
| Light Ultralu | Breathable, lightweight, sweat-wicking. | Bras |
| Luon | Stretchy, breathable, and lightweight. Other variants include the Seriously Light Luon, Light Luon, and Full-on Luon. | Yoga pants, leggings, tank tops, body suits, jackets, and shirts. |
| Luxtreme | Sweat-wicking, stretchy, provides support, and feels like a second skin. | Tights, bras, and pants. |
| Nulu | Lightweight and stretchy | Cropped jackets, bras, high-rise pants, and tank tops. |
| Nulux | Smooth and soft against the skin, lightening-fast drying, silky and cool-to-the-touch, and lightweight. | High-rise tights, polo shirts, tank tops, arm bands, and tennis dresses. |
| Silverescent | Anti-bacterial and anti-stink due to the embedded pure silver in the fabric | High-rise tights, polo shirts, tank tops, armbands, and tennis dresses. |
| Swift | Lightweight, strong, stretchy, water-repellent, and sweat-wicking. Other variants include Swift Ultra and Swift Ultra Light. | Shorts, leggings, skirts, rompers, zip-up sweatshirts, and jackets. |
| Tencel | Smooth and supple surface, fast moisture release, lightweight, and naturally breathable with good sweat absorption. | Cardigans, jackets, tank tops, leggings, and pullovers. |
| Vitasea | Made from seaweed and blended with cotton and spandex. Ultra-soft fabric that retains its shape and stays soft long after you wash it. | T-shirts and tank tops. |
| Warpstreme | High shape retention, lightweight, and sweat-wicking | Pants and joggers |
The patents that grant the brand exclusive access to their fabrics additionally mean they can charge a premium price for their products. This is another competitive advantage for Lululemon.
Robust digital presence
The competitive advantage of Lululemon through its robust digital presence is enormous. In this digital era which was spurred by the digital revolution, a lot of businesses use the digital space as a means of reaching out to their consumers as well as making sales.
Lululemon’s website offers customers an easy and seamless option of shopping for their favorite Lululemon products from the comfort of their homes, offices, or while on the move. This eliminates the stress of going to the stores and spending countless hours to check out merchandise.
The brand also utilizes various social media platforms such as Facebook and Instagram to engage its consumers, answer questions, make announcements, and reveal new products.
Lululemon is known to respond promptly to customer queries through its social media pages. They also offer quick resolutions to any challenge customers share through social media.
Additionally, the brand has created various social media campaigns such as #sweatlife which enable its consumers to share their experiences with the brand on social media. This is equally beneficial to the brand as it increases brand awareness and serves as a means of marketing for Lululemon and its products.
The company’s effective use of digital media has been a great competitive advantage for Lululemon.
Consumer loyalty
Consumer loyalty is an additional competitive advantage of Lululemon. Since the company’s inception in 1998, the brand has focused on selling products to individuals and building lasting relationships with them through various engaging and community-based initiatives.
For instance, the brand’s stores were usually converted to yoga studios in the evenings to allow customers to connect with each other. They also initiate and host various fitness and mental-health-related events to educate their customers concerning these issues.
Lululemon’s commitment to improving existing designs and creating new ones is another factor that encourages consumer loyalty. Most times, the brand utilizes feedback from its consumers, ambassadors, and influencers when improving existing designs or creating new ones. This increases consumer loyalty to the brand as they feel that their input matters in the company’s processes.
The brand’s commitment to hosting various fitness and charity initiatives also builds a strong community of loyal followers who want to be part of the driving force in making people more aware and get involved in keeping fit and prioritizing a healthy lifestyle spurred by Lululemon.
Through the company’s influencer and ambassadorial programs, they partner with various professionals in diverse fields such as running, yoga, tennis, and swimming. These professionals often offer free training and sessions at Lululemon events. They also serve as catalysts who encourage their fans and followers to patronize the brand.
The effectiveness of Lululemon store employees who they refer to as educators also plays a significant role in building consumer loyalty. This is because they offer meaningful guides to consumers to help them choose the right outfits to get the best result for the particular fitness activity they want to engage in.
Brand recognition
Lululemon’s competitive advantage also includes the high level of the brand’s recognition across the globe. The brand leverages this brand recognition in its relationship with suppliers, manufacturers, and consumers.
Both the suppliers and manufacturers work side-by-side with the brand to ensure that they supply and manufacture the right products for the company so as to maintain their patronage. This enhances brand recognition as both their fabrics and designs are unique.
Consumers also want to be associated with Lululemon because the brand has positioned itself as a retailer of high-quality athleisure apparel and accessories. The brand’s community initiatives are another rallying point for customers. These give consumers a sense of being part of an elite group of athleisure users.
All these combined give Lululemon a competitive advantage which is driven by its unique brand recognition
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Who are Lululemon’s competitors?
Lululemon competitors include retailers of yoga and active wear such as Sweaty Betty, Alo, Gymshark, Athleta, Patagonia, and Fabletics. Additional competitors include multinational brands such as Nike, Under Armour, Puma, and Adidas.
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What makes Lululemon different from its competitors?
Lululemon is different from its competitors due to several reasons. For starters, the brand’s products are made from exclusive fabrics that are designed to enhance comfort while pursuing an active lifestyle. They are also a customer-centric brand that is focused on giving its consumers the best experiences and connecting them with a strong community of sweat-minded individuals.
Additional factors that have differentiated Lululemon from its competitors are its specialization in yoga wear, strong brand recognition, robust digital presence, and premium products.
Conclusion
Lululemon’s competitive advantages include their specialization in yoga wear and equipment, the creation of apparel that can be easily switched from athletics to leisure, high-quality products, and exclusive clothing materials.
In addition to the above, the brand’s robust digital presence, consumer loyalty, and brand recognition are also competitive advantages for Lululemon.
The brand enjoys these competitive advantages due to its competitive strategy of differentiation and focus. These have aided the brand in carving a niche for itself in the athleisure industry.
Last Updated on November 2, 2023 by Nansel Nanzip Bongdap
Blessing's experience lies in business, finance, literature, and marketing. She enjoys writing or editing in these fields, reflecting her experiences and expertise in all the content that she writes.
