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Lululemon Athletica reported a better-than-expected second quarter revenue and earnings-per-share, easily topping the number that analysts had expected. The main driver behind this success is how Lululemon has built a seamless shopping experience for both store and e-commerce shoppers amid COVID-19 concerns.
Currently, the athletic apparel retailer has approximately 97% of its stores open globally and, on average, reopened stores are performing at 75% of last year’s volume. The retailer is still operating on limited capacity and shorter open hours in many locations. Luluemon also operated just over 50 seasonal stores in its second quarter 2020, planning to increase that to 70 in the second half of the year in markets where it has existing stores to help mitigate current capacity constraints.
“As we continue to operate under the COVID-19 environment, we are seeing a shift in behavior in terms of working from home, sweating from home and the increased importance of living an active and healthy lifestyle,” said CEO Calvin McDonald on its recent earnings call. “These trends play to our strengths and set up an opportunity for us to continue to innovate and gain market share.”
Some examples of the innovations that Lululemon has implemented demonstrate its consistent ability to be agile and anticipate the evolving needs of this shoppers:
The apparel retailer has added curbside pickup to its buy-online-pickup-in-store (BOPIS) functionality.
It has enabled a virtual waitlist so shoppers do not have to wait in line to enter a store. The new function allows shoppers to be notified via text when it is their turn to enter the store. In the month of August, lululemon had nearly 400,000 individual shoppers utilizing the virtual waitlist across nearly 280 locations where it has implemented the technology.
Lululemon has continued to expand its number of “omni educators.” These associates receive special training enabling them to help shoppers both in-store and virtually through the guest education center.
The retailer continues to offer digital educator and virtual concierge programs.
Many of the ambassadors have been offering live streams on social channels, and the retailer now offers digital content as part of its membership program in the cities where tests are underway.
The retailer spent approximately $53 million in the second quarter, primarily on store capital for renovations technology spent to support business growth, digital channel and analytics capabilities and supply chain investments.
Lululemon has also acquired in-home fitness platform provider MIRROR, which sells a high-tech mirror to stream live workout classes. Lululemon said it expects MIRROR to generate more than $150 million in revenue for the full year 2020.
Although many retailers are concerned about whether they can survive this crisis, Lululemon demonstrates how creating a seamless shopping experience can encourage customers to shop at their stores and excel.
This is not the time for the retail industry to try to simply ride out the storm. With a more proactive, progress approach to both digital transformation and a new era of customer experience and service, the future might look brighter.
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