While much of the fashion retail sector has suffered during the COVID crisis, one category that has boomed is that of ‘athleisure’ wear as millions of locked-down, gym-deprived people look to keeping fit from home.
A number of retailers are shifting their focus towards the category to tap into this boom, including Target, whose All in Motion range has grown to a billion-dollar business since launch a year ago, while in the UK, Marks & Spencer saw online sales of its athleisure range grow 200% in the 6 months to end of September last year. Meanwhile troubled GAP has committed to focusing on its Athleta brand, one of the few success stories at present in the group’s portfolio. As GAP CEO Sonia Syngal put it recently:
It's a relevant category…which has become even more relevant during COVID.
Then there are the pureplays in the space, among the most prominent of which is lululemon athletica, set up in 1998 as a yoga clothing provider, but which now has a global footprint covering the entire range of athletic and leisure wear. COVID has delivered a growth rate of 22% (as of November 2020), with e-commerce now accounting for 43% of total revenues ($478 million).
The pandemic has also seen some strategic expansion activities, most notably the acquisition of at-home e-fitness company Mirror last June, which has resulted in a dedicated Mirror tab on the US e-commerce site, including a hyperlink for guests to complete purchase transactions.
Increased awareness of the importance of personal wellbeing in the face of pandemic pressures has also played to the retailer’s strengths. It’s just published its first Global Wellbeing Report, a 10-country study that benchmarks the state of wellbeing worldwide in a Global Wellbeing Index. Among its key findings, only 40% of respondents feel optimistic about the future now, compared to 59% who felt optimistic about the future a year ago.
The top five drivers of strong overall wellbeing reveals a critical need to improve:
- Only 15% of respondents consider themselves in good physical health.
- Only 17% feel they are able to manage stress effectively.
- Only 19% feel like they have enough energy to be able to accomplish things they need to do every day.
- Only 19% feel confident in themselves most of the time.
- Only 18% have a good work/school/home life balance.
But this general decline has the effect of increasing the importance of wellbeing with half of the study respondents expecting to increase focus on physical and mental wellbeing this year, obviously good news for the athleisure retailers like lulelemon.
A good war…so far
All told, lululemon has had a ‘good war’ to date, as Celeste Burgoyne, lululemon President, Americas and Global Guest Innovation argues:
Leaning into our strengths, COVID has shifted the world in some ways and really allowed us to take advantage of all the investment we've made in our digital ecosystem, really leaning into our omni-channel strength. That has been one area that we have really pushed into, really leveraging physical and digital. We were set up to do so due to the last three years of investments and we'll continue to really lean into that omni-channel strength and then investing in the future.
While Mirror was the most obvious large scale investment, it fits as part of a wider long term game plan that has played out since COVID kicked in, says Burgoyne, a plan that has delivered some notable successes:
One is just our omni-channel capability with Buy Online, Pick-up In Store (BOPIS) as a key capability. During the Holidays, we were able to serve BOPIS in a two hour committed window…[using] our ability to leverage our physical stores and the great teams we have working in our stores to be able to fill BOPIS and curbside in such a fantastic way.
And for customers who wanted to keep standing in line to collect goods to an absolute minimum, the firm used digital tech to enable this as well:
Virtual Waitlist was another innovation that we came up with, which allows our guests to not stand in front of our stores and wait for 30,45, 60 minutes, but allows them to put their name in the queue and fulfil all their other needs and we will text them when ready. It's just a way to respect their time.
A particularly successful offering has been the Digital Educator, something that launched at the start of the COVID crisis, but which came into its own during the Holidays. Burgoyne explains:
This is where we leverage a lot of our store educators on video, chat, online,. It really helps us bridge that experience and really allows us to have our educators be at the center of both the physical and the digital experience. On Black Friday alone we had over 4,000 live video appointments with our digital educators.
With the emergence of a Vaccine Economy, lulelemon is convinced that the interest in keeping fit and general wellbeing won’t go away. Not will the behavioral shift to digital on the part of the consumer, suggests Burgoyne, which will shape omni-thinking going forward:
That is real and we do not believe that will go away. Yet, we believe strongly that the physical stores and our physical manifestation are still really, really important. So again it really goes back to our focus on the omni-guest experience, recognising that definitely there's been a shift to digital that won't go away, but we believe physical is as important as ever. We will continue to lean into physical, and as we think of physical, really understanding how physical can shift and change over the next five years.
That requires some work, she says:
We are in that work to really determine what do we really need those physical stores and our physical experiences and the physical interactions to be? How do we leverage our strengths within that? We have such strength in physical from the quality of the people we have working in our stores to the quality of the connections we have in our communities and to the guest interactions that we are able to create. We're really excited to see how we will continue to evolve that physical experience, while we continue to really understand that digital will forever have some momentum behind it. So we're really excited about investment in both and how to bring those together to create the ultimate omni-experience.