a fresh start or a way to spend time with friends. This commu- Questions for Discussion nity focus is core to the company's marketing strategy and can be seen in promotional materials, its Web and social media pres- 12-33. Lululemon's experiential stores offer customers an op- ence, and most notably in its brick-and-mortar stores. portunity to use its products with other customers. While the community focus is central to Lululemon's Choose a favorite brand and describe a retail format approach, the company is also hedging its bets with a more for that brand that could provide an experience similar personalized approach to fitness. In 2020, Lululemon Athletica to the Lululemon store experience. purchased Mirror, the company behind the $1,500 device with 12-34. Lululemon's acquisition of Mirror was not without speakers and a camera that lets home exercisers stream work- risks. What were the potential benefits and potential out classes and allows them to watch both themselves and the risks of the purchase for Lululemon? What are two workout on the innovative technology. Of course, home ath- other strategies Lululemon might consider for future letes need workout clothes, too, and seeing Lululemon fash- growth? What are the pros and cons of each? ions worn by the virtual instructors provides a not-so-subtle suggestion for how that need can be met. 12-35. Lululemon's competitor Nike has tried experiential retail During the height of the 2020 pandemic, Lululemon tem- formats, including its Nike Live stores (see https:/ews. porarily closed its North American stores, ending its in-store nike.comewsike-live-launches-in-long-beach-and- experiences and helping to make at-home exercise options like tokyo). Compare the Lululemon and Nike approaches Mirror a popular alternative for workouts. Post pandemic, the and evaluate the effectiveness of the two approaches. approach to yoga and other workout classes will likely change, Which strategy best promotes customer engagement but the larger spaces in stores like the experiential Lululemon with its company's brand? Chapter Notes 1. Micah Solomon, "The Power of the Customer Experience (CX) 4. "History of the Sears Catalog," http://www.searsarchives.com/ during the Current Crisis," Forbes, May 9, 2020, https:/ /www. catalogs/history.htm (accessed January 15, 2021). forbes.com/sites/micahsolomon/2020/05/09/the-power-of-the- 5. Stanley C. Hollander, "The Wheel of Retailing," Journal of Retail- customer-experience-cx-during-the-current-crisis/#e5c7e62323bd ing, July 1960, 41. (accessed June 20, 2020); Shama Hyder, "Three Principles for Nav- 6. Benna Crawford, "Lululemon Yoga Classes," https://yoga. igating and Mapping the 'Connected' Customer Journey," Forbes, lovetoknow.com/yoga-centers/lululemon-yoga-classes (accessed April 13, 2018, https://www.forbes.com/sites/shamahyder/ June 5, 2020). 2018/04/13/three-principles-for-navigating-and-mapping- 7. Bianca Bahamondes, "The 25 Most Bizarre Things You Can Buy the-connected-customer-journey/#23d9a40233b1 (accessed from Vending Machines around the World Slideshow," The Daily June 16. 2020): Michael R. Solomon. The New Chameleons: Con- Meal. June 22. 2017. https:/ /www.thedailymeal.com/travel/ Real Choices of Lululemon A'rhle'riCCt Consumers' use of online retailers to purchase general mer- chandise continues to increase. As a result, some major retail chains, such as Gap and Macy's, have closed many locations and others, like Pier 1 Imports, Neiman Marcus, JCPenney, and Forever 21, have filed for bankruptcy. When shoppers can find anything they want online and have it delivered directly to their homes, what does it take to get consumers to go to the trouble of making a trip to a phySicaI store? Popular athleisure retailer Lululemon Athletica seems to have found the answer: expen'en tiai rerar'iing. Chip Wilson got the idea for Lululemon while he attended his first yoga class at the age of 42. He noticed that while the instructor wore thin and sheer dance clothing, most of the stu- dents wore baggy clothes. He realized that sweaty clothes meant ciothes that bind, and those baggy ciothes also made it harder for the yoga instructor to check students' form. Wilson had developed a stretch fabric for other clothing that he believed would be perfect for yoga enthusiasts. This patented lycraylon mix known as "luon" stretches four ways and wicks away moisture. The company's Wunder Under stretchy pants were a big hit, and a new category known as arhfer'sure was born. The Luluiemon product line is primarily focused on higher~ quality, stylish workout ciothes that can stand up to the rigors of a workout. The clothing also comes at a higher price that fans of the brand say is worth the cost. In addition to workout clothing, the company offers water bottles, backpacks, and personal care items. As a vertical retailer, Lululemon controls the entire supply chain and sells the products it creates exclu- sively at Lululemon stores. As of February 2020, the company had 491 stores that fall into one of four categories: a pop-up store, a 3,000-square-foot store, a 5,500~foot version and its most impressive format, the 25,000-square-foot esqrzierientr'arI store, with one each in Chicago and at the Mall of America in Minnesota. At the massive Chicago store, Lululemon customers will find many of the Lululemon products they love and a whole lot more. A restaurant will serve you $12 " power bowis" that contain kale and roasted sweet potatoes. Or, if you prefer, you can order a burger and a beer, or maybe some chocolate cov- ered bacon. Then, to work off those calories (or to think deepiy about what you just ate), you can take a class in hip hop yoga or guided meditation, each offered for $25. Classes are also offered in packs of five at a discount; you can choose from 6 to 10 classes offered each day. Forget your workout clothes? No problem. Lululemon will let you try out its gear free of charge. Feel free to use the spacious locker rooms and showers avail- able in the store after your workout. Lululemon's approach with these experiential stores may at first seem like the \"retailtainrnent\" that other retailers and 476 PART FOUR | DELIVER AND COMMUNICATE THE VALUE PROPOSITION malls use to draw customers into those retail spaces. The stores should put the company in a better position than many Lululemon strategy is differentiated by the level of involvement smaller yoga studios to continue to hold such events. In June it offers customers and the customers' level of engagement of 2020, Lululemon management stated that they were com- with the company's products. Rather than just giving custom- mitted to continuing and expanding the experiential approach. ers something to observe, the company facilitates active par- Lululemon's strategy seems to be working. Between 2013 ticipation and that participation conveniently includes the use and 2019, revenue for the company nearly doubled, and in of Lululemon's clothing. A good experience with an expertly- 2019, the stock price increased more than 80 percent, consid led yoga class will also increase the likelihood of a successful erably more than rivals Nike and Under Armour. Plans for con- health outcome, continued involvement in exercise, and an tinued growth include international expansion and a major ongoing need for quality and stylish Lululemon athleisure push in their men's clothing line. The experiential store and its products. ability to foster a community of "Luluheads" will continue to The company's approach is also highly focused on be a key part of the strategy: Lululemon CEO Calvin Mcdonald community-it brings people together who live what Lulule- says the new format could eventually represent about 10 per- mon calls the "sweatlife." Instead of seeing customers as a cent of the company's store base. Emphasizing its importance, group of anonymous buyers, the company considers them as McDonald described the experiential store model as "the pin- people who buy Lululemon for a reason-sometimes emotional, nacle expression of our vision" and added that Lululemon is highly motivational reasons. Lululemon knows that the purchase "an experiential brand that ignites a community of people liv- of workout clothes can mean more than just acquiring a nice ing the sweat life. " 80 pair of yoga pants or gym shorts. These purchases could signify a fresh start or a way to spend time with friends. This commu- Questions for Discussion nity focus is core to the company's marketing strategy and can be seen in promotional materials, its Web and social media pres- 12-33. Lululemon's experiential stores offer customers an op- ence, and most notably in its brick-and-mortar stores. portunity to use its products with other customers. While the community focus is central to Lululemon's Choose a favorite brand and describe a retail format approach, the company is also hedging its bets with a more for that brand that could provide an experience similar personalized approach to fitness. In 2020, Lululemon Athletica to the Lululemon store experience. purchased Mirror, the company behind the $1,500 device with 12-34. Lululemon's acquisition of Mirror was not without speakers and a camera that lets home exercisers stream work- risks. What were the potential benefits and potential out classes and allows them to watch both themselves and the risks of the purchase for Lululemon? What are two workout on the innovative technology. Of course, home ath- other strategies Lululemon might consider for future