Living in Washington, D.C., I often play tour guide to out of town guests. When I ask them what restaurants they want to try or places they want to go, they always come back with similar answers:
“Oh, anywhere is fine… AS LONG AS IT’S NOT A CHAIN!”
In recent years, I’ve noticed more people bemoaning the idea of big corporate chains, turning instead to local small businesses. I find this particularly true in the fitness world – most of my friends who are runners swear by their neighborhood running specialty stores while shunning bigger retailers.
One global chain that hasn’t fallen victim to this trend is Lululemon Athletica.
The company is headquartered in Vancouver and has 142 locations across Canada and the United States. In 2010, when the recession hit North America particularly hard, Lululemon experienced significant growth in net revenue – +57% according to an earnings press release.
How did a store that sells a high-end, expensive product to a niche demographic fair so well in an economic downturn?
I believe it comes down to the community-centric model that makes Lululemon stores feel less like those of a faceless, international brand and more like the little shop around the corner where employees remember customers’ names and clothing preferences.
It begins with the company’s employees. Sales representatives at Lululemon tend to exemplify the famous company manifesto. They are athletes – runners, yogis, Pilates instructors, personal trainers – who are trained in goal-setting. Most locations prominently display their staff’s short and long-term goals in the store, reassuring customers that they are buying athletic wear from people who actually “get it.” Every Lululemon location is featured in the “community” section of the company website, inviting users to join email lists specific to their selected area, allowing stores to engage with nearby customers.
Beyond the point-of-sale, Lululemon is known for its ambassador program. Each store selects local talent, usually yogis or runners, to be ambassadors to the community. This group receives Lululemon gear at a discounted price that they model around town, but they are also encouraged to organize community activities such as “fun runs” and free yoga classes.
I can testify to the success of the in-store activities. When I started training for my first half-marathon, I knew I needed to find a running group to stay motivated. I learned that the Lululemon in my neighborhood hosts a weekly run club so I signed up without ever having visited a store.
After my first run club – which begins and finishes at the store – I stood around chatting with Lulu employees, ambassadors and other runners. Of course, I was surrounded by athletic gear emblazoned with the company’s logo.
Somehow, I managed to walk out of the store that night without buying anything (probably because I was too embarrassed to try on anything while covered in sweat…)
A couple days later, I popped back in and tried on a few pairs of running shorts… and ended up buying some.
And, now, I am one of the countless athletes who swear by Lululemon’s running shorts (I’ve already purchased two more pair). Without the Lululemon run club, I might not be a customer at all, let alone a loyal one who often sings the store’s praises to anyone who will listen.
So, while people might prefer using local businesses for some products and services, Lululemon demonstrates how global brands can still benefit from tying themselves to the communities they serve.
What large chains do you think do a good job of supporting local communities? Do you think this has an effect on revenue?