In strategy courses we are often asked the following question: What are some companies that changed the industry?
The top three companies that come to mind are Southwest Airlines, Apple, and Lululemon.
With two of the same Lulu sweaters (but in different colours!) hanging in my closet, it is unsurprising that I am writing my Business Design paper on the apparel company. Examining the company’s strategy reminded me of deviances I’ve noticed in the past few months. I am left wondering if Lululemon is changing it market strategy and overall strategy.
The 2014 Lululemon Annual Report reveals that the company believes a key component of their competitive advantage arises from their community-based grassroots marketing approach. Unlike their competitors, Lululemon does not employ the traditional advertising approach of print media, television commercials, and celebrity endorsements. I was unsurprised to read this. In conversations with Educators they proudly told stories of the company’s practice in gifting gear and discounts to ambassadors (local athletes, yoga teachers, and fitness instructors), as opposed to spending large sums on celebrity/pro athlete sponsorship/endorsements.
But Lulu’s Instagram posts showcase the brand’s strategy is changing. Two weeks ago it posted a photo to cheer on their elite ambassador Walter Wood, a professional freestyle skier. Andrew Ference, captain of the Edmonton Oilers, was featured in an Instagram video just before Christmas. And in July, Jamie Anderson (an American professional snowboarder) starred into a mini-campaign where she was given the keys to the Instagram account to let followers experience her Lulu life.
I am willing to bet Lululemon traded more than just gear and discounts to get these professional athletes to endorse the brand and star in these social media shots. With the employment of elite ambassadors I feel that it is without doubt that Lululemon’s strategy is changing but if the terminology is an indicator of anything, fear not, they have not forgotten where their grassroots lie.