Lululemon Consumer Insights Report

LululemonNo Sweat Research

Joe Fraser, Zach Lipson, Claire Mirsky, Cat Proulx

Introduction

No Sweat Research is a research company that focuses on holistic and

accurate research methods and results that help ensure that your newest brand

initiative is no sweat.

We decided to work with Lululemon because we were originally very

intrigued by their recent attention in the media. We wanted to see if their recent

controversy was having an affect on consumers, but we also wanted to explore

trends, as well. So though we focused on exploring the reputation of Lululemon in

college students’ eyes, we also tackled the task of how to increase brand loyalty and

there is support for the trend of wearing athletic wear for your day to day routine.

Secondary Research

The first insight that we made was that Lululemon is in a booming industry.

“The global sports apparel market — which includes women’s active wear — is set

to grow to $178 billion by 2019, according to Boston-based research firm Trefis. In

2013, in the US, sales of women’s active wear alone reached $11.5 billion, a 9

percent jump from 2012, according to market research firm NPD1.” Sales of athletic

apparel are steadily rising, in particular women’s athletic apparel. The fitness

industry continues to grow as exercise itself increases in popularity2. Lululemon is

fortunate enough to find itself in the middle of a marketplace that is trending

upward.

1 (http://www.businessoffashion.com/2014/01/activewear-lululemon-nike-hm-sweaty-betty.html)2 (http://www.businessoffashion.com/2014/01/activewear-lululemon-nike-hm-sweaty-betty.html)

Our next insight was that Lululemon’s products are much more popular with

women than with men. In fact, menswear accounted for only 12% of the company’s

sales as of January 20133. The company is looking to draw more male consumers,

even going so far as planning men’s only Lululemon stores for the future. Time will

tell if they’re successful in this venture, but as of right now their consumer base is

mainly female.

Another insight we discovered was that the brand hasn’t completely

separated itself from its see-through yoga pants controversy4. Chip Wilson’s

response to the situation only served to exasperate the controversy, one the

company would like to distance itself from as much as possible.

The core challenge that we identified for Lululemon was overcoming the

damage to the company’s reputation caused by Former LuluLemon CEO Chip

Wilson’s controversial statements about his brand as well as the company’s see-

through yoga pants controversy. When large groups of customers continued to

express their dissatisfaction with Lululemon’s yoga pants, Chip Wilson responded to

the controversy by claiming that some women’s bodies “just don’t actually work for

it.5” Lululemon is an expensive brand in the category, and as such many people

consider it an exclusive brand. When the CEO of an exclusive brand proclaims that

plus size women should not be wearing his products, exclusive can start to border

3 services, Bloomberg, with. (July 29, 2013 Monday ). Oh look, he's wearing Lululemon!; Now Vancouver-based 'women's

brand' is courting American men. thespec.com, Retrieved from www.lexisnexis.com/hottopics/lnacademic4

STRAUSS, MARINA. (September 13, 2013 Friday ). Delays prompt Lululemon to trim outlook; Steps to improve quality following see-through-pants crisis result in shipping issues and rising expenses. The Globe and Mail (Canada), Retrieved from www.lexisnexis.com/hottopics/lnacademic5

http://www.businessinsider.com/outrageous-remarks-by-lululemon-founder-chip-wilson-2013-12

on elitist. Chip Wilson is gone now, but the ramifications of his actions can still be

felt in the marketplace.

What information did you set out to gather through your primary research?

With our primary research, we hoped to gather qualitative as well as

quantitative data that would give us a more intimate knowledge of our client and

their situation. Our focus group would allow us to talk directly to consumers, in a

comfortable environment where they could speak freely and share with us their

perspectives. Our in-depth interviews would give us the opportunity to question

participants individually, and our surveys would allow us the chance to gather

valuable larger-scale data. Ultimately, we hoped to learn more about consumer’s

thoughts on Lululemon as a brand, and see if that would help us make a

recommendation to the company, which would help them overcome their core

challenge.

Methods

Our focus group took place February 17th in Ithaca College’s Park School of

Communications, specifically in room 279. We were in a medium sized classroom,

one designed to hold about 30 or so students as well as a professor. We had thirty

minutes to conduct our focus group, which ran from about 10:55 AM to 11:25 AM.

Our research team was comprised of 4 team members, three of us taking notes and

one person serving as the moderator.

Cat (the moderator) sat down, and we had our participants shift their desks

so that they were in a half circle, all of them facing Cat to help facilitate conversation.

Our participants were four female students here at the college, all of them between

the ages of 19 and 21. Similarly, our team consisted of four college students aged

19-21. However, our team consisted of two men (both of whom served as note

takers) and two women. The participants were about 2 or 3 feet away from Cat, and

the note takers sat off to the side about 3 or 4 feet away from Cat and the group.

Claire recorded the entire focus group using her laptop, but put a piece of paper

over the laptop screen so the participants wouldn’t have to watch themselves on

camera and feel uncomfortable. Zach left his phone on his desk to record what was

being said, and after a couple of minutes the phone was moved closer to the

participants in order to get better audio quality. I left my phone on my desk for the

duration of the focus group. On top of that, the three note-takers all took hand-

written notes while paying close attention to the proceedings.

The moderator guide was structured the way it was in an attempt to have the

conversation flow easily and make the most of the time we had to work with. At the

top of our guide was our focus group purpose statement, detailing what we hoped to

achieve. Next up we had a few “probe” questions written down for quick reference.

These questions are open ended, used to get the conversation flowing again or back

on topic. Then, there’s the discussion guide. The discussion guide sliced our

allotted thirty minutes into a few 5 or 6-minute chunks of time, each for a different

topic of conversation. We started out with an introductory phase, laying the ground

rules of the focus group and starting the conversation out with a couple easy

questions. From there, we spent six minutes asking about the relationship the

participants have with fitness, and how they view workout clothing in non-workout

settings. Then we spent six minutes discussing how they viewed our brand’s

competitors, and six minutes discussing what they all thought about Lululemon and

their personal relationship with the brand. Then we dedicated five minutes to a

conclusion, wrapping things up and making sure we covered everything. Our

moderator guide left two minutes open, giving our group some leeway in case one

part of the conversation ran too long.

For the interview portion of the primary research, in total, 8 people were

interviewed for No Sweat Research.

One interview was conducted on Thursday March 5th 2015 at 7:45pm at 214

S Albany, Ithaca NY (the interviewees home) at the kitchen table. The first

participant was chosen out of 3 potential participants in the home, based on the fact

that she was known to the moderator to be the most familiar with Lululemon (the

moderator had seen the participant wear lululemon as well as talk about it in the

past). The participant is a female Environmental Science Major at Ithaca College who

is 20 years old. Before the interview began the moderator gave the participant some

background on the project by introducing the project and research objectives as

well as the parameters of the interview itself. The moderator explained that a timer

would be set for 15 minutes in which they would discuss the research objectives.

The moderator asked permission to record the interview on a computer. The

moderator sat across from the participant in order to easily facilitate the

conversation.

Another interview was conducted on Monday March 9th, 2015 in Rochester

NY at 24 Turning Leaf Drive (the interviewees home) once again at the kitchen table.

The participant was chosen out of the other potential three participants in the home

because she best fit the target demographic as she was a female age 45 compared to

two males. The participant is a 45 year old Pilates Instructor/Mother. Before the

interview began the moderator explained the background of the project as well as

the parameters of the interview itself. Once again, a timer would be set for 15

minutes in which the research objectives would be discussed. The participant was

encouraged to ask questions or for clarification at any point throughout the

interview and was asked for permission to be recorded. The moderator sat across

from the participant in order to easily facilitate conversation.

Both of the interviews mentioned followed the basic structure of the

interview protocol which started with a question about the participant’s childhood

in order to capture their interest as well as to get them talking about themselves and

feeling more comfortable. The questions were purposely laid out from general to

specific in order to ease the participants into the more Lululemon brand-directed

questions. The interview protocol was based on questions that outlined the six

research objectives that had previously been established before the interview

began. First, the interview protocol asked about any physical activity that was done

by the participant as a child. Then, the protocol led to the participant’s personal

attitudes and fitness habits. Next, the specifics of how often the participant worked

out was asked as well as the correlation between weather and the participant’s

workouts. After, the convenience and comfort factor of workout clothes was

addressed. Then, the protocol asked about brand preferences in addition to brand

awareness of Lululemon’s main competitors, Athleta, Nike, and Underarmour.

Lastly, the participant was asked about their awareness of Lululemon as well as

their personal experience with the brand and its products.

Another set of interviews took place on March 20th, both in the afternoon,

and both in the Pub area on campus. Each interview lasted approximately 20-25

minutes. The two participants were chosen based off of their interest in fitness and

their knowledge of pop culture, as well as their interest in fashion. Participants were

both female, 19-20, and white. The interview was recorded with the interviewer’s

phone, and notes were taken with a laptop. The interview protocol was structured

pretty closely with the research goals, and the probe questions were both prepared

beforehand and thought of during the first interview, and then similar questions and

structure were followed in the second interview. The questions for these interviews

had a focus on brand reputation and loyalty, and also the acknowledgement and

participation in trends on campus. The research goal was mainly to find if college

students cared about brand reputation and corporate social responsibility, and to

what extent.

Another set of interviews administered by a different member took place on

Tuesday, March 3rd in Ithaca College’s Roy H. Park School of Communications room

#279. The interviews were fifteen minutes each, pairing up two randomly selected

students from our class two at a time. The pairs would conduct one interview, then

switch roles as the interviewer became the interviewee. Interviews began around

10:55 AM and ran until about noon.

The first interviewee was a woman between 19 and 21 years old, and the

second was a man in that same age range. Both were students at Ithaca College,

sophomore and Junior IMC majors respectively. The interviewer was nineteen

years old and also a student and IMC major at Ithaca College. Notes were taken on

the interviewer’s MacBook Pro laptop, using the Garage Band app to record

audio. There was slight background noise from other people in the classroom, but

not enough to disrupt the overall quality of the audio. The interview protocol is

structured in an attempt to facilitate conversation easily at the beginning, and then

ask more specific questions about the brand itself. It’s laid out in straightforward

format, having an introductory statement and then listing the main questions we

want the consumer to answer. Underneath all of these broader questions are a few

possible probe questions to ask, just to keep the conversation going.

For the last set of interview procedures, both were conducted in different

settings. The first interview took place in one of the hallways on the second floor of

the Park School at Ithaca College. It was at approximately 11:00 a.m. The physical

environment was quiet conditions with limited outside noise. The second took

place in one of the meeting rooms at the Park School at Ithaca College at

approximately 11:30 a.m. There were other students in this room that could have

served as background noise. Both interviews lasted approximately 15 minutes long.

Participants for the interviews were two females both chosen at random but

from the same research class. Both interviewees were female, 19 and 20 years old

respectively. The interviews were recorded with an iPhone recording app. Notes

during the interviews were taken by pen and paper on participant’s key phrases and

expressions to specific questions.

The research goal of these two interviews is to find out where Lululemon is

and isn’t connecting with their consumers. We also want to collect information on

how to help Lululemon be a more successful brand in the future.

The purpose of the interviews is to gain a better understanding of

Lululemon’s student demographic, and understand the public perception of

Lululemon’s brand and products. We want to know the consumers personal

relationship with fitness and workout habits. We also want to understand the

purchase decision-making process of consumers and what drives people to buy, or

not buy Lululemon products.

For our survey portion of the research, we chose to test all of our hypothesis

via correlation because it implies that there is a relationship between two variables.

Correlation can reveal whether scores on both variables increase or decrease,

scores on one variable increase while the other variable decreases, or if there is no

relationship present. In addition, the correlation coefficient (r) reveals to what

extent the two continuous variables are related. Our hypothesis are as follows:

i. *H1: Women are more inclined to purchase Lululemon clothing than

men

1. Independent Variable: Gender: Female

2. Dependent Variable: Purchases of Lululemon clothing

3. Predicted Direction of the relationship: Positive

4. Statistical Test Used: Correlation

5. Explanation: We predicted that there would be a positive

correlation between being a female, and purchasing lululemon

clothing.

6. R Value: .227 P Value: .286

ii. H2: People who work out more frequently are more likely to wear

fitness apparel

1. Independent Variable: Workout Frequency

2. Dependent Variable: Likeliness of wearing fitness apparel

3. Predicted Direction of the relationship: Positive



correlation between workout frequency and the likeliness of

wearing fitness apparel.


iii. H3: People who enjoy fitness activities are more likely to be

concerned about their appearance while working out

1. Independent Variable: Level of enjoyment of fitness activities

2. Dependent Variable: Level of concern about their appearance

while working out

3. Predicted Direction of the relationship: positive



correlation between the level of enjoyment of fitness activities

and the level of concern about their appearance while working.


iv. H4: People who work out more frequently are more likely to wear

workout clothing during the day

1. Independent Variable: Workout Frequency

2. Dependent Variable: Likeliness of wearing workout clothing

during the day

3. Predicted Direction of the relationship: positive



correlation between workout frequency and the likeliness of

wearing workout clothing during the day.


v. H6: In colder months people are more likely to wear athletic clothes

as daily wear

1. Independent Variable: Temperature

2. Dependent Variable: Likelihood of wearing athletic clothes as

daily wear

3. Predicted Direction of the Relationship: Negative


5. Explanation: We predicted that there would be a negative

correlation between temperature and the likelihood of wearing

athletic clothes as daily wear.


vi. H8: People who have a higher income are more likely to wear

Lululemon

1. Independent Variable: Income Level

2. Dependent Variable: Brand Loyalty

3. Predicted Direction of the Relationship: Positive



correlation between income level and brand loyalty.


vii. H10: Consumers who view Lululemon as an exclusive brand are less

likely to wear the product

1. Independent Variable: View of Lululemon as an exclusive

brand

2. Dependent Variable: Wearing Lululemon clothing

3. Predicted Direction of the Relationship: Negative


5. Explanation: We predicted that there would be a negative

correlation between people’s view of Lululemon as an

exclusive brand and the likelihood of wearing Lululemon

clothing.


viii. H11: Consumers who consider fashion a priority when purchasing

workout clothing are more likely to consider purchasing Lululemon

clothing

1. Independent Variable: Level of Priority that Fashion Plays

2. Dependent Variable: Likelihood to purchase Lululemon

clothing

3. Predicted Direction of the Relationship: Positive



correlation between the level of priority that fashion plays

when purchasing workout clothing and the likelihood to

purchase Lululemon clothing.

6. R Value: -.525 P Value: .008

Results

Our focus group had interesting results because we luckily had a very brand

loyal consumer of Lululemon. According to her, what the media was saying about

LuluLemon and the controversy there didn’t matter, because what she cared about

was the quality of the clothes and the customer service in the store, which in her

opinion, was excellent. The other students in the focus group didn’t shop at

LuluLemon very often, if at all, and one student wasn’t aware of what LuluLemon

was. For those students, brand controversy did have more of a weight, especially for

more expensive brands, because if there was controversy it would especially not be

worth the money. On the whole, because the students didn’t wholly participate in

the trend of wearing active wear as daily wear, what they wore to work out had to

be effective, but also inexpensive.

In our interviews, college students showed that a large part of the purchase

decision was the price of the product. Consumers really wanted to find “the best

quality for the lowest price,” as one participant said. There also was a theme of not

particularly brand loyalty, but store loyalty: “I buy Champion leggings because all

my workout clothes from Marshall’s and that’s what they sell there, and it’s

cheaper.” When asked about the reputation of the brand and how that affects their

purchase decision, most students wanted to be brand conscious, but found that they

“can't always afford to boycott companies if their prices are lower than others.”

However, that doesn’t necessarily apply in LuluLemon’s case because their brand in

controversial and expensive.

From our survey research, from our supported hypothesis, we concluded

that people that work out more often are more likely to wear and buy fitness

apparel, as well as be concerned more about their appearance while working out,

and wear more fitness apparel during their day to day activities. We also found that

the more exclusive Lululemon comes off as, the more likely people are going to buy

it, which was particularly interesting because it

From the hypothesis that weren’t supported, we found that women are not

more likely to purchase workout clothing than men, in the colder months people are

not more likely to wear workout clothes as daily wear, those with a higher income

are not more likely to purchase Lululemon, and also those that consider fashion a

priority are not more likely to purchase Lululemon.

Discussion

No Sweat Research has found that, typically, those that are brand loyal to

Lululemon will purchase the clothing regardless of the reputation of Lululemon or

the price, as seen by the participants in our focus group. As seen in our surveys,

consumers that work out purchase work out clothing that they think is trendy,

because they not only want to wear it as daily wear, but also want to look good

while working out. Because of these conclusions, No Swear Research suggests that

Lululemon continue to be trend focused, and design clothes that work with

everyday apparel, because the emphasis on trendiness will continue to attract their

brand loyal customers as well as hopefully bring in those that want to look their best

while at the gym.

Because our surveys concluded that people are more likely to shop at

Lululemon if they see it as an exclusive brand, making the brand too accessible by

the public isn’t a good idea for those that like the luxury aspect of it. However,

making the brand a little more accessible by opening more stores or launching a

campaign that emphasizes the wear-ability of the clothing might help with brand

awareness, which was a little bit of an issue we noticed with some college students.

It will also appeal to the store loyalty that a lot of college students experience by

continuously shopping at Marshall’s, if LuluLemon were available there, it might

help the brand image. Though price is a factor for college students, and ideally

Lululemon should lower the price of it’s clothing if they want to really attract a

larger audience, college students are not opposed to shelling out money if they

know they are getting quality clothing, as seen from our interview results. Because

of this, a quality focused campaign would not only help fix the bad PR gotten from

the Lululemon see-through pants scandal, but should boost sales with the younger

demographic as they commit to investing in the brand. From there, if they enjoy the

clothing, they will develop a loyalty to Lululemon, and as they get higher incomes

they will be more willing to purchase clothing.

Conclusion

Throughout the semester, we gathered an extensive amount of primary data

for Lululemon. In the focus group and the interviews, we experienced some people

who were unaware of the Lululemon brand. Because of this, we were able to extract

useful information from an outside perspective. Since we used convenience

sampling for our surveys, consisting of 22 females and only 3 males, it was hard to

get an accurate reading for the entire student body, much less the American

population. We also realized the importance of creating hypotheses that could

actually be tested and weren’t easily repeated by similar questions.

We started this project with a goal of making Lululemon a better brand by

with the results yielded from our research. Though our research goals did shift

somewhat throughout the semester, in the end I think we accomplished what we

were looking to do and were able to help make real suggestions. When this project

started, in our focus groups and interviews, we discussed more of people’s thoughts

on Lululemon and their competition, while in our surveys we went more in depth

about peoples workout habits and what they wear to workout versus what they

wear casually during the day.

By carrying out these projects we learned the amount of work it takes to be a

market researcher. Every individual aspect of each project must be well thought out

be understood by our test subjects. If there are just some minor mistakes, or if

someone we are testing doesn’t understand a question or what we are talking about,

the data becomes skewed. We learned the art of coding research information and

using SPSS to understand the statistical probability and relevance of our survey

hypotheses.

Research is one of most important aspects of strategic communications

because it is a starting point for all marketing and advertising campaigns. Research

acquires target demographics for companies and their products. We learn who the

target market and audience should be based off of the data collected, and how

different people respond to different products and different messages. All of the

things we learn in market research is used to create ideas to target the correct

people to gain the most revenue and success. None of the success of advertising

campaigns can happen without effective use of market research.

Marketing

Lululemon Consumer Insights Report