Why Lululemon Is Ahead of Its Time
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- Опубліковано 9 лип 2024
- Analysis of Lululemon's exceptional profitability and why as a business they are very much ahead of its time.
Although Lululemon operates in the same industry as Nike, Adidas and Under Armour, somehow Lululemon’s profit margins is by far the highest amongst its peers. With an average operating income margin of 20% over the last 5 years, it is 8% higher than Nike, 12% higher than Adidas, and an astonishing 20% higher than Under Armour, who struggles with an operating margin of literally 0%. For Lululemon to command such high margins within the cut throat retail apparel industry, it has to be doing something different from the rest of the crowd. While some people may think Lululemon’s success is a result of its higher percentage of female customers since it is often believed that women have a higher propensity to spend on clothing than men, the true drivers behind Lululemon’s extraordinary profitability lie in its innovative business strategies and unique competitive advantages.
Sources & footnotes:
docs.google.com/document/d/1r...
00:00 What Sets Lululemon Apart From The Crowd
01:01 How Lululemon Creates Value
05:12 How Lululemon Markets Its Value
09:35 How Lululemon Captures Value
15:13 Looking Ahead & Conclusion
![ОРБАН приехал к ПУТИНУ и "отчитался" о поездке в Киев 😁 [Пародия]](http://i.ytimg.com/vi/_0ukDovOWq8/mqdefault.jpg)
Thanks for watching. Sources & footnotes for this video: docs.google.com/document/d/1rSkaRsv5QnSrUWwtFzMjrjB1nfdnOTMK/edit?usp=sharing&ouid=105845290081458110690&rtpof=true&sd=true
Lulu was one of the first to realize that consumers DO NOT want a huge logo slapped all over.
This is absolutely false. There are tons of brand who do not have very present logo brands, from the beginning!
I prefer quality of apparel ，not only just focus it appearance
@@MrEmy85they said ONE of the FIRST, one of THE first, one of the first. Period. Think, before you talk.
They were not even in top 10 first. Wtf are you talking about? There are many brands with a long history. Period Period period @@avaavocado8840
However, it still costs more tha huge logo products
As a business student, I’m so grateful that this channel exists! The company analysis is very insightful and to topic is really intriguing. Love how your videos are structured and presented it such a clear and well-researched way!
Reminds me so much of the case analysis I’m doing
Super glad you enjoyed the videos. Thank you for watching and good luck with your studies!
Bro you're wasting your time learning business the best way to learn is to intern within a business or start one.
@@dopemusic6414and to get an intern, as a uni student you first need to study business lol
Agreed. Its so hard to find quality content like this thats purely focused on business strategies. @theartofbiz thank you so much for the good work
@@A-mz1bt Thank you very much for watching! Glad you enjoy the content!
I used to be a clothing reseller on eBay & Poshmark, and because I reside in Alberta, Canada (Lululemon is headquartered in British Columbia, Canada; the neighbouring province to Alberta), I came across a lotttt of Lululemon at thrift stores, etc. I would buy it for cheap, and resell it online to other Canadians, and even to the USA, and it would always be quicker to sell than most other companies that I was reselling at the time. I focused mainly on their scuba hoodies where I'd buy them for between $5-$20, and resell them online for $50-$100. It was amazing, and because I still have a good number of Lululemon in boxes, I'm glad to hear it's still doing well. :) Hmm, I should start reselling clothing again... I did it for roughly 5 years in total, but haven't done it now for roughly 2 years.
That's an interesting connection you have there with Lululemon, thank you for sharing!
I resell stuff on EBay as well… 1 month ago I came across a Lululemon hoodie to flip and that was by far the easiest flip ever. If I was you, I would do it again… easy money bro
It’s been a while! Im an avid lululemon fan so this was a rly insightful one for me since I’ve never considered why they’re so successful so deeply 🎉
Glad to see you again! Thank you for watching and I'm happy to hear you were able to learn something new!
Lulu’s ABC pants (and linerless shorts) are my go-to’s for everything from office to casual wear. I have some stuff from many years ago still going strong.
I'm a guy and I exclusively wear Lulu. The quality and design are THAT good. I still have t shirts that I bought 6 years ago.
Smart , cost effective marketing tactics coupled with overpriced apparels makes for a healthy profit margin .
Glad to see you’re back with a new video! Always looking forward to your uploads :)
Thank you very much! Hope you enjoyed the video :)
The quality, the fit, the innovative technology they use and minimal design, makes them 🔥🔥🔥 buy
What technology?
Just FYI Nike is a $49.1B, 7x of Lululemon. When the company this size the YoY growth and profit margin is a lot harder achieve than Lululemon (who is still growing really FAST) Also another thoughts on marketing expenses, Nike offers WIDER product portfolio.
I’m using lululemon products for 8 years now and counting and its still in good shape. Its expensive but its worth it.
I'm a huge Lululemon fan. I use to like Nike stuff but not anymore - their quality has gotten worse over the years (cheaper fabric, worser cut and fit, taking shortcuts on styling and sewing). It's why I've stopped buying from Nike. Whereas Lululemon's clothes last for ages, the fabrics are amazing, the cut always fit me, the styling is gorgeous, the sewing impeccable, and the customer service reps are helpful no matter which country's Lululemon I visit (Australia, US, China). With Nike, the customer service chick opened the security tag and left the sharp needle INSIDE the sportsbra!!
Lady’s and gentlemen We got a Pigeon 🤡🤡🤡
Phenomenal video analysis of Lululemon. Keep up the great work!!! Anticipating for more videos in the future!
I’m a huge fan. Started with the We Made Too Much section. Then found the outlet mall and never looked back. As cheap as $19! I usually pay $25-29, approx 1-2 pieces per time I visit. This last time, the only (ultra inexpensive) thing on offer was double layered Align. Passed. I didn’t need more bras either.
This was excellent. Great job and thank you!
Underrated channel. Thanks for the detailed breakdown. As a LULU shareholder. I am also concerned about how the company can diversify their business without going sideway (Mirror) and overly extending their product range (imagine Apple do everything like Samsung).
Thank you for watching!
They can collaborate with innovative brands like us! Good point on the mirror comment as well 👏
By acting this way their growth is capped. They would have to switch to more like Nike and Adidas to keep growing
1:40 Also Lululemon is made in Sri Lanka and they seem to have very good clothes production companies there that actually pay the staff far better than other apparel companies and countries. 🤔🤔
that could potentially be a reason why their clothes are more expensive. Think about it if they pay their workers stable wages, the quality of the material they source it from, and getting the finished product to stores and distribution hubs for shipping, their high prices make sense
@@goldfish3858High wages in Sri Lanka is still like $4 an hour, $4.50 once you turn 13 years old. They can charge more because of branding.
Just stumbled on this video, love the businesses analysis 👍🏼
What a great video! I used to be a person that made fun of people who loved LuLuLemon but now I am a cult member. I truly believe their items are high quality and they last so long. Worth the price for me.
As a lululemon fan, thanks for explaining why there are so successful. Loving all your content
Thanks for watching - really appreciate it!
@@ITSBOPLANETmost likely because he likes the stuff. The quality is pretty good - even tho I don’t really like lululemon.
I love your videos man. Keep it up
I’ve never set foot in a Lululemon store but I enjoy knowing things and found this very interesting. I’m also fed up of shite leggings.
Damn! Just 3 videos, well researched, great team! Do reupload them man with the CC part being rectified, you & your team deserves the $$$$$
Thank you very much for the support! What do you mean by the CC part being rectified?
Great video dude!! u got a new subscriber
I think the extension into shoes and other sports is probably an over extension. They need to better their main offering for comfortable athletic wear and lounge wear instead of trying to diversify into all of these different markets. They are able to stay unmatched with comfortable, stylish fitness/gym wear. Hopefully that will stay true regardless of their attempts at reaching other markets that have already been captured by Nike and Adidas.
I really like such brand story telling videos that are well-organized, clear and understandable. Hang-on dude, I would like to watch every of your video
Thank you very much!
Barring aside the business side of things
From a performance standpoint, Lululemon's products are top notch. It's amazing how every sport they penetrate, they do so with so much quality. I don't wear their leggings, but I own a lot of their running products and let's just say I would claim they helped me achieve my 2:40 marathon time
Stop it you know full well they've made no difference 😂
@@xgtwb6473 It did for me. I am a tech guy. Very much interested in knowing/learning a lot about tech, including tech in sportswear.
Lululemons are expensive, there's no other way around that. But the products they release are very comfortable and durable.
Hows their shoes?
Your video is amazing, thanks !
Outstanding video man
omg ur videos are amazing
Thank u for this videos. I like it a lot. Keep doing!
Glad you enjoyed the video! Thanks for watching :)
when next?@@theartofbiz
It is an interesting and informative description of Lululemon. It must be the dynamic that exists between the customers, where they recommend the product to each other, that is the company's moat, as it must be the reason for the low marketing costs in relation to the turnover relative to the competitors, perhaps also the functionality. The rest with direct sales and quality material is something that should be relatively easy to replicate.
Love your videos, was wondering what software you use to create your videos?
not me watching this in a lululemon top. i havent finished watching this but commenting here just because i know this channel rules and this is going to a superior video.
Thanks for the support! Hope the video lived up to your expectations!
I have all pants made by them and they last forever and fit great. The commission pant is amazing. They replace or fix any broken or defective items
I would look at it differently. Can you imagine someone searching lululemon first when he wants to play football or basketball? All other brands in the video are involved in a wide range of sports and struggle with higher margins, which means it would most likely be the same for lululemon if they enter.
Would love an episode about any of the most successful gym franchises.
Would be great if you did more Chinese companies maybe BYD for example. You got my sub after the Luckin Coffee video you did that very well 😊😊
Thanks for watching - will definitely be looking to do more Chinese companies in the future!
This is an excellent in-depth video.
Thank you very much!
I tried other brands just to see but they're not comparable quality wise, Lululemon is still a lot more flattering and nicer feeling.
So glad everyone has forgotten about how Lululemon was named intentionally to humiliate asians, the founder's own words being "It’s funny to watch them try and say it.". Now I can buy my Nulu yoga pants without guilt. Lululemon is truly ahead of its time in terms of business strategy, but i really hope it burns to the ground.
People will ignore it because their pants will last forever! Their consumers are part of a cult.
So far this is a 3rd Lululemon video from a 3rd channel that I've seen uploaded in the last 9 days. It is my belief that it is highly likely that they're paying channels like this one to make videos on them for PR. That many videos on Lululemon's "success" in such a short span of time is too much of a coincidence to anyone with a working brain.
Alot of influencers and social media ads have been popping up as well. Infact this entire video seems like an AD.
This video is not sponsored by Lululemon, nor is it sponsored by anyone else in fact!
good video . Awesome work.
Glad you enjoyed the video! Thanks for watching :)
Which software do you use to make videos and animations?
This looks like a promo material for lululemon. In Europe and Asia this is an UNKNOWN brand. For sure they do some things right but their growth will find a ceiling pretty soon. Growing faster than Adidas and Nike is absolutely normal as their business is 25% of that of Nike.
They are widely popular in Europe and Asia actually, especially among younger females! But yes agree with you that growing faster than Adidas and Nike is definitely justifiable given the difference in size
Would people say that at its core, Lululemon understands their customer’s needs so well they are able to provide the products for their needs?
I used to be shamed for wearing Lululemon merchandise…
By those willing to pour thousands into watches, handbags and jackets.
I don’t know…
Maybe I should get into the watch game? 🤷🏻♀️
Another amazing video my brother, your content is so good I stopped my music at the gym to listen to you between sets.
I'm the type of dude who has 1 gym outfit, but you're making consider some yoga pants...
Hahaha that's incredible to hear and thank you for watching and commenting! Hope you managed to get all the reps in in the end ;)
Really like channel
Interesting video
How come you guys don’t have any other socials? Great video too 👌👍
we don't have offline stores in all eu coountries. i think even online store came to market recently, but I might be wrong. I used to think that usual brands are the best, but when I visited Australia I was really surprised by lululemon, I still have leggins from it, they still look good, for me it's the best leggins I've ever had. Yes, puma, nike and adidas have great products too, but when it comes to lululemon there is bigger scope of leggins or items that would fit, which isn't always case with other brands.
Great video about business. Keep going!
Thanks for watching!
it’s not always that they are overextending themselves, but rather i believe it’s poor execution and not listening to the customers’ needs.
Did I hear the phrase.." years of washing ".......most clothes are produced with a max 20 wash cycles.....not like old clothes which can be handed down the generations...lululemon is a winner.😊
LULU is most definitely one of my best stock purchases ever.
As someone with superfluous amounts of lululemon from polos to shorts to ABC pants, just wait until you learn how bad polyester is for the environment and your body.
Growing is easy, to stay at the top is hard. Look at reebok, puma, under armour.
Great video !! excellent content!! Just came across this channel !! will be subscribing for more!;))
Thank you very much! Really appreciate it :)
I’m a marathon runner and lululemon is not my cup of tea, I prefer other brands, but I gotta admit that I respect the hustle.
I love lululemon and I cannot lie
they are doing what Decathlon has been doing for years but at cheaper rates and twice the quality. Lululemon seems promising quality wise, waiting on them to open stores in India soon.
I don't understand why all the major brands are not in India your middle class is same as the population of America.
@@dopemusic6414indians law tie the business to indian corporations. what it means is the profit sharing is highly inclined towards the indian partners. not really tempting for anyone outside india.
Lululemon is the single greatest clothing brand ever. Their quality is simply unmatached, and their clothes hold up even through much abuse.
More content please.
I basically only wear lululemon clothes. I train Muay Thai and that’s all I wear when I go to the gym. I also get to wear their pants to work. Their men’s underwear is the comfiest on the market as well.
That is sad
The thing is all the top brands have gone through this phase of success. It always catches up to the company. They are valued at 60billion dollar right now. They have not hit any speed bumps yet and any economic deflation so the outlook isn't all going to be sunshine and roses especially with their unit sale price. They will have to have sales and create cheaper products which could easily cut their value in half while leaving them with an inventory problem.
We need more videos!!!!
Thanks for watching :)
I always thought lululemon was some kind of new brand, I only found out about this brand because of asian influencers working in tech job, the new "it" brand
I like your work, however, consider crediting what images and videos you use in order to grow and not running into legal trouble. Looking forward to your future analyses.
I love your content, all of it has been so insightful, I recommend companies like Blackstone or BYD as interesting video topics
Thank you very much! BYD may be an interesting idea :)
lululemon fabric is amazing and doesnt store smell. even after sweating all day, my shirt smells nothing the next day, UNWASHED.
AllThO luluLEMON
Basically the quiet luxury for casual-athletic wear. An untapped market
1:47 once I fell on concrete and my skin broke at the knee but the lululemon legging did not rip lol idk how but yeah
If the quality is better, you should expect each customer to buy less often. Shouldn't the asset turnover ratio be lower than the competitors you are comparing with? And if so, does that mean that the return on assets, which is a function of the EBIT margin and the asset turnover ratio, is lower than the competitors?
They might buy the same product less often but the higher quality will drive the customers to buy more different products from them and also allow for a strong word to mouth, drawing even more customers
Several people also like to keep different iterations of the same product and this is especially common in clothing brands
@@dickgrayson4237 Your argument sounds reasonable. It is the network effect and pull strategy.
Here after Nikhil's podcast 😂
Modern mba? Can tell he is your inspiration
A fool and his money are soon parted. Nowhere is this more true than in the luxury fashion industry!
Can you do analysis on Li-Ning
Please do more videos about fashion brands ❤❤❤
💯 🎉
💪
Damn , I thought you are having a stroke every time you said Lululemon
selling wholesale wouldn't gel well with their advertising strategy of creating a network of local brand ambassadors. lululemon's marketing strategy only works because it's more than the sum of its parts.
Not professional runners Nikki hiltz and Colleen Quigley being hailed local fitness influencers 😭 that said, they definitely have a higher social media presence than many other pro runners. I bet their contracts are more content-based than performance-based like many professional Nike/adidas/ etc. athletes
When both you and modern mba upload, its like modern mba uploading 2 videos and I get confused 😅😂
I miss the old lululemon. Rhone, Alo, and Vuori are the new places to go
luluLEMON
If you sell good stuff which is quantity people gonna buy it!!
Never heard of it . Here gymshark is big as gymwear
are you Mordern MBA?
Btw, it’s Lululemon, just like a channel that only lady buy it most likely. Market only apply to female
4:50 bro really said Tesla is the best in their field😂
I never heard about this brand and I never see it anywhere 😅
Video could've been a lot shorter.
Please upload more bro!!! you and modernmba are my favorites
LV, Hermes, and all other fashion legacy brands have been doing DTC for ages.
lululemon for the Lulu-Amelu
How would gym shark compare to Lululemon?
Doesn’t. Gymshark makes gear for gym