It seems every brand is rushing to embrace personalized content, but we should remember success isn’t just about product recommendations or including first names in emails. Personalization is an experience where brands understand their market well enough to provide value to each customer as an individual. By this standard, lululemon is on track to become a personalized marketing leader thanks to enormous investments in data analysis, virtual communication services, and a personalized retail business model.
To kick off Postfunnel’s new Nailed/Failed series, let’s take a closer look at lululemon’s personalization initiatives and how they emphasize a complete brand experience.
The data-driven origins of lululemon
Before it was an international brand, lululemon was a standalone store in Vancouver, British Columbia. Founded by Chip Wilson in 1998, the outlet featured sports apparel with an emphasis on yoga outfits and athletic wear. But lululemon’s success wasn’t thanks to some groundbreaking clothing innovation — it happened because Wilson embraced data.
Wilson used market and demographic data to discover a niche audience among women — one that prioritized exercise, travel, work-life balance, and stress reduction. As a result, lululemon geared its clothes and marketing towards a growing number of educated women interested in fitness who also wanted their outfits to fit comfortably.
Thanks to these data insights, lululemon became an immediate success. It raised over $300 million during a 2007 IPO and eventually became a renowned brand name. But it never forgot its data-backed roots — customer research and forecasting remain a vital part of its modern personalization strategy.
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As it grew, lululemon set a major goal: to reach one billion people. To achieve this benchmark, the brand needs to reach beyond that initial niche audience without losing the sense of personalization. Once again, data was the solution to understanding all target markets to craft the right offers and experiences.
To that end, lululemon invested in a new CRM engine for its entire customer base – an early adopter of such technology. This enabled them to perform robust analyses of shopper behavior across digital and physical channels, accounting for shopping habits, customer feedback forms, call center interactions, social media posts, and more. While lululemon already proved itself when it came to data insights, using a dedicated technology solution to help with that supercharged these abilities and made it far easier for the brand to reach customers at scale.
As a result, lululemon uncovered enough insights for deeper personalization, richer support experiences, and more accurate product recommendations. In addition, its online deals and in-store events led to impressive web and foot traffic surges. Most importantly, lululemon found new target audiences, particularly among men, who represented 30% of incoming customers in 2020.
But lululemon was just getting started.
lululemon, personalized retail, and experiential storefronts
Personalized retail is a term for providing every shopper with unique, personalized shopping experiences by drawing on data from every available touchpoint. Lululemon is pursuing this goal with a series of “experiential storefronts,” the first of which opened in Chicago in 2019.
These stores are smaller compared to lululemon’s traditional retail outlets, specializing in carefully curated stock and in-person events. In addition, many offer cafe and gym services, run community-led classes, and host guest speakers.
These storefronts offer several benefits to lululemon’s customers. First and foremost, they create a branded anchor point for loyal shoppers — you’re not just buying clothes, you’re also enjoying a coffee, looking at gym classes, and making like-minded friends. The smaller environment is also more intimate, enhancing the ability to offer one-on-one customer service. Finally, and most importantly, the stores create even more varied touchpoints where customers can engage with the lululemon brand — such as memberships, class registrations, and more — all providing further insight into local markets.
It’s important to remember, however, that such a model only works if you prioritize personalized experiences. You can’t just offer cookie-cutter product deals available to shoppers on the other side of the country. Instead, lululemon’s experiential stores harken back to a classic retail model where every store was one-of-a-kind and employees could give you special attention. All while shoppers can seek out deals of interest and become part of a larger community.
Surviving COVID with virtual personalized shopping
For all the benefits of personalized retail, lululemon’s strategy did suffer a blow in 2020 due to the COVID-19 pandemic. In response, the brand unveiled more robust digital offerings that still emphasize personal connections. The most notable of these is lululemon’s virtual personalized shopping service, which pairs customers with a digital educator who can offer one-on-one guidance.
To be absolutely clear, the digital educator is not an AI-powered algorithm — they are human beings who connect with shoppers over a video chat to discuss. Educators are trained to help customers find the right product, provide fitting support, recommend gift ideas, and more. The service is available on-demand by availability or by appointment to ensure each customer gets the attention they need.
Live support may seem quaint in an industry where many retailers manage customer interactions via chatbot. But, in practice, it’s a powerful solution to today’s lockdowns or social distancing habits. With so many customers left in their homes, lululemon provides an elegantly simple human connection that isn’t usually available from e-commerce storefronts. The brand continues to leverage the power of data collection to improve its service, but the experience is rooted first and foremost in a personal conversation. Sometimes the most straightforward solutions turn out to be the right ones.
lululemon’s personalized future
As a result of these strategies, lululemon gained new shoppers, retained many of them in good numbers, saw growth during COVID-19, and even secured brand of the year recognitions in 2020. So it’s no surprise that lululemon plans to double-down on personalized retail, pay full rent for all existing storefronts, and invest in new locations. When the pandemic finally winds down, the brand should find itself reaping the benefits of experiential stores and robust virtual services. And this success comes entirely from looking at customers as individuals, not a demographic. And finding the right technology to support such a vision. The next step of which, should come from an even more sophisticated Retention Marketing tech – the kind that lets AI map its customer journeys.