GeographyAnalysisofLululemon

Lululemonisadesignerandretailerofyogalifestyleapparelthatoperatesmainly
outofNorthAmerica.DennisWilsoninVancouver,BritishColombia,founded
Lululemonin1998asaresultofthegrowingtrendofhealthylifestylesthatincluded
athleticsandstayinginpeakphysicalshape.Wilsonsawanopportunityintheathletic
apparelmarketthathadnotyetbeenfilledinthefieldofyogawear.ItwasWilsonsgoal
tocreatealifestylebrandofcomfortableathleticwearthatwasspecificallytargetedto
yogaandpeoplethatwantedtolivelong,healthyandhappylives.(annualreport)
Products
Lululemonsproductsstriveforapremiumqualitythatismanufacturedwiththe
rightmaterialstoaccommodateperspirationduringathletics.Theseproductsinclude
tops,bottomsandaccessoriesformenandwomen.Therearemanydifferentoptions
whenchoosingaLululemonproductandeachproductfallsunderafamilyofadifferent
fabric.(lulufabrics)Luonisthesignaturefabricthatisdesignedtoensurecomfortby
stretchingandbreathingduringathletics.TherearefourgradesofLuonthatare
manufacturedfordifferentactivities.Theseinclude:regularluon,fullonluon,lightluon
andextralightluon.Theluonfabricgivesafeelingofnotwearinganything.Luonis
trademarkedbythebrand,madeof86percentnylonand14percentLycramandaccounts
for17percentofallwomenssalesattheapparelretailer.(businessinsider)Lululemons
otherproductlinesaremadefromotherfabricssuchasluxtreme,swift,naturalfibres,

meshandlinersandsilverscent.Theseproductsallhaveafunctionofprovidingcomfort
forcustomersthatliveanactivelifestyle.(lulufabrics)
Competition
Lululemonhasstrengthsthattherebrandimplementstodifferentiatethemfrom
theircompetitorsandcontributetothesuccessoftheretailer.Thefirstandmost
observantistherededicationtoapremiumactivebrandandprovidingcustomersa
superiorproductwithtrademarkfabrics.Thisfocusonapremiumactivewearismainly
focusedonwomensapparel,whichisalsoanimportantdifferentiatorthemfrom
competitors.Next,Lululemonpositionstheirretailerstoresinlocationsbasedonthe
expectationtobecomeanintegralpartofthecommunity.(annualreport)Employeesof
Lululemonaretrainedtodeveloparelationshipandpersonalconnectionthroughashared
activelifestylewitheachcustomerthatultimatelyaimstodevelopacommunityfeel
unlikeotherretailers.OnelastimportantcompetitiveadvantageofLululemonisthecore
valuesandmissionstatementthatsurroundthebrand.Thefoundingprinciples
establishedbyMr.Wilsondriveourdistinctivecorporateculturewithamissionof
creatingcomponentsforpeopletolivelong,healthyandfunlives.(annualreport)These
deeprootedbeliefsinemployeesandproductdesignersareallparttotheexperienceof
enteringaLululemonstorethatprovidesacommunityfeelfromtheservicereceivedto
messagesofgoalachievementandlovethataresubconsciouslyplantedinstoresandthe
customizedbags.

CompetitorsofLululemonarecompaniesthattargettheactivelifestylecustomer.
Competitioninthisindustryishighlycompetitivewithmanybigplayers.Direct
competitorsareNike,AdidasandUnderArmour.Thesecompaniesarewholesalersand
directsellersofathleticapparelforbothmenandwomen.Lululemonsmainproduct
focusesareonwomensoothercompetitorsincludeBEBEsport,TheGap,andLucy
Activewear.(annualreport)Thesecompanieshavetargetedwomenthroughthereathletic
apparelthatmirrorlululemonsluonpantsatalowerprice.TheGapsAthletabrandisa
perfectexampleofthis.Lululemonpantssellfor$98+whileGapsAthletapantssellfor
2030dollarsless.ThesepantsarebreathableandstretchlikeLululemonstrademark
Luonfabric.(athleta)
MarketSize
Lululemonisanationalchainthatoperatesin7provincesacrossCanadaalthough
majorityoftheirstoresarelocatedinOntario,AlbertaandBritishColombia.Thereare54
storesacrossCanadawith20inOntario,13inAlberta,12inBritishColombia,5in
Quebec,2inSaskatchewan,2inManitobaand1inNovaScotia.(AnnualReport)
LululemonCanadianLocations(annualReport)

ExamplesofLocations
Geodemographicsaddsgeographytosegmentationvariablesinrecognitionthat
peoplesbehaviourisalsoinfluencedheavilybywheretheylive.Thisformof
segmentationisnotjusttailoredtojustethnicandincomebasedclusteringbutalsoto
segmentpeoplewithsimilarattitudestopropertyandstatus.Geodemographicsshows
thattheneighbourhoodacustomerlivesinismeaningfultohisownbehaviourandwill
tellhowhemayact.ByanalyzingthreeofLululemonspopularstoreswecanexamine
thelifestyletypesofpeoplelivinginnearbyneighbourhoodstounderstandthestore
placement.AtoolwecanusetoobservestorelocationisPRIZM5whichclassifiesall
Canadiansintooneof68lifestyletypesbasedontheredemographics,marketplace
preferenceandpsychologybasedonsocialvalues(lowerrankingrepresentingbetter
lifestyle).(PRIZM5)Bytakingapostalcodeofahousefromaneighbourhood
surroundingthemallwhereaLululemonstoreislocatedthetargetmarketcanbe
observed.SamplescanbetakenfromsurroundingofonepopularlocationinToronto,
VancouverandEdmonton.

Toronto

(AmapofSouthernOntarioanditsLululemonlocations.)

ThepopulationofOntariois12,851,821,with908,607.67insquarekilometers
anda14.1populationdensitypersquarekilometer.ThecityofTorontospopulationis
5,583,064,with5,905.71insquarekilometersanda945.4populationdensitypersquare
kilometer.(statistics)ForTorontothelocationsampledisYorkdalemallandthe
neighbourhoodofWilsonheightsthatislocatedjustnorthoftheshoppingcentre.A
neighbourhoodneartheshoppingcentrefallsunderthe03clusterofArtsandAffluence.
Thisclusterisagroupofwealthyandoverwhelminglyurbanhouseholdswithlarge
families.Thesefamilieshaveloftyincomesnearing170,000andhaveachievedsuccess.
Theyalsoareinvolvedinextracurricularactivitiesandstayingingoodphysicalshape.
(PRIZM5)YorkdaleisCanadaspremiershoppingcentre,locatedintheheartofthe
GreaterTorontoArea.Itsexclusivelistofretailerstotalingmorethan240is
highlightedbymanyfirstinCanadaandflagshipstores,includingJ.Crew,ToryBurch,
Crate&BarrelandBurberry,aswellassuchsoughtafterdestinationsasTiffany&Co.,

HoltRenfrew,AppleandCartier.Yorkdaleranksasoneofthehighestperforming
shoppingcentresinNorthAmericawithsalesofover$1,300persquarefoot.(YD)
Vancouver

(AmapofSouthernBritishColombiaanditsLululemonlocations.)

ThepopulationofBritishColombiais4,400,057,with922,509.29insquare
kilometersanda4.8populationdensitypersquarekilometer.ThecityofVancouverhas
apopulationof2,313,328,with2,882.55ofsquarekilometersanda802.5population
densitypersquarekilometer.(statistics)ForVancouverthelocationsampledisOakridge
mall.Aneighbouringareafallsunderthe05clusterofAsianSophisticates.Onethirdof
peopleinthisclusterareAsianandarewelleducated.Theyenjoyupscaleincomesof
130,000$andareabletoenjoyactivelifestyles.Theyhavekidstheyalsoenrolinextra
curricularactivaties.(PRIZM5)OakridgeCentreisVancouver'smoststylishshopping
destination,withover150premiumshopsandservices.(oak)
Edmonton

(AmapofSouthernAlbertaanditsLululemonlocations.)
ThepopulationofAlbertais3,645,257,with640,081.877ofsquarekilometers
andapopulationdensityof5.7.ThecityofEdmontonhasapopulationof1,159,869,
with9,426.73squarekilometersanda123populationdensitypersquarekilometer.
(statistics)ForEdmontonthelocationsampledisWestEdmontonMall.Aneighbourhood
closebyfallsunderthe14clusterofDiversityHeights.Thisclusterismadeupofdiverse
middleagedfamilieswithanaveragehouseholdincomeof112,595andahigh
concentrationofolderchildren.Thesefamiliesareknowntoenjoyoutdoorsportsand
activities.(PRIZM5)WestEdmontonmallis5.3millionsquarefeetandisthesizeofa
smallcity.Itishometomorethan800storesandservicesandincludingnineworldclass
attractions.WestEdmontonMallhasvisitationof30.8millionpeopleannuallymakingit
thenumberonetouristattraction.(WEM)

TargetMarket
Lululemontargetsasophisticatedcustomerthatisindulgedinanactivelifestyle.
Thisismainlyfocusedontheyoungwomen,age1834thatenjoysahealthyl8lifestyle
andisactivethroughyogaorotheractivities.Lululemonoffersalinealineofapparel
designedforathleticactivitieslikeyogaandrunning.ItisimportanttoLululemonthat
customersthatareundertakingthestressofbalancingcareerandfamilyandhealthcan
escapewithexerciseanddosoincomfortofthereclothing.Thepricepointof
Lululemonsproductstargetspremiumcustomersthatarewillingpayforapremium
product.Theseproductsaremadefromtrademarkfabricsthatprovidecomfortthat
differentiatesthemfromotherchoices.AfterrealizingtheidealcustomerLululemoncan
nowlocatestoresinresponsetomarketconditionsandifthepopulationmixormarket
potentialisappropriateandcanattracttherightcustomer.Lululemoncanuseinformation
theyfindoutaboutcertainareasforpurposeofviewingclustersofpotentialcustomersto
identifyareasthatarelargeenoughformarketingpurposes,targetableandreachable
populations.Bydeterminingthattheseclustersmatchtheirpredeterminedtargetmarket
theycanmakeaninformeddecisiononwheretolocate.Itisclearthatfromthethree
examplesfromlocationsinToronto,EdmontonandVancouverthatthereisapotential
marketforgrowth.

KeySuccessFactors
TherearemanykeyfactorstoLululemonssuccessinCanadabutmainlyit
comesdowntotheirabilitytofindanemergingnichemarket.Theinceptionof

Lululemonwasforthepurposeoffillingamarketneedthatwasnotbeingmet.By
creatingaspecialtybrandforyogalifestyleanewbrandofathleticwearwasborn.The
changingdemandforhealthylifestyleisobviousasmanypeoplearenowbecoming
healthconscious.(healtharticleandstat)Lululemonbasestheircorevaluesonwomen
livingalongerhealthierandhappierlifestylethroughtheathleticexperienceofwearing
Lululemonapparel.Thesecorevaluesthatareembeddedintheemployeesandcustomers
createabrandloyaltythatenablesthemtobesuccessful.LastlyLululemonhasa
perceivedvaluetoitscustomersthatarewillingtopayapremiumprice.

ChallengeinCanadianMarketplace
OneofLululemonskeysuccessfactorshasrecentlybecomeoneofitschallenges
especiallyintheCanadianmarketplace.Manynewsubstituteproductshavecomeinto
themarketplacebyotherathleticwearcompanies.Onecompanythathascomeinto
directcompetitionwithLululemonsLuonpantforwomenisGapwiththeirAthletaline.
AtYorkdale,Oakridge,andWestEdmontonMall(thethreesampledlocations)thereisa
Gapstoreinthesameshoppingcentre.WithGapstoresincloseproximityitisadirect
challengeforLululemonslocations.TheAthletalineissupposedtoparalleltheLuon
fabricandprovidethesamequalityandcomfortforalmost30dollarsless.(Athleta)
LululemonsalesarealsoaffectedbyconsumerspendingInanerawherepeoplehave
historicallyhighdebtloadsandrelativelystagnantincomes,andthesenseisthecostof
livingcontinuestogoupandeconomicpessimismisrising,itsadifficultenvironmentto
projectalotofincreasedconsumerspending.(CutSpend)

FutureGrowthPredictions
FromLululemons2010fiscalyearendtothe2014fiscalyearendLululemongrewtheir
Canadianlocationsfrom45to54.ThreeofthesenewstoreswerelocatedinOntarioand
threewerelocatedinAlberta.AssouthernOntarioandAlbertabecomesmorepopulated
withhigherincomesasshownbytheneighbourhoodsbesidethesamplelocationsthereis
theopportunitytoopenupmorelocationsfornationalgrowth.(Prizm5)Manymallsin
Canadaareexpanding,asmetropolitanareasgrowlarger.Oneoftheirstrategiesfor
growthineveryannualreportsince2010hasbeentoiincreaseourBrandawarenessand
customerloyaltythroughthecorevaluesandmarketingeffortstoeventuallyleadtostore
expansion.ItisLululemonsbeliefthatincreasedbrandawarenesswillresultinincreased
comparablestoresales.(annualReport)Alongwiththisincreasedbrandawareness
Lululemonwilllooktoexpandintomenswearandotherproductdevelopments.These
productdevelopmentswilllooktoexpandtheirbrandtobecomealeaderinnotonly
yogabutalsoinotherphysicalactivitieslikeswimmingandtennisandexpandthere
targetmarketwithotherproductofferings.(annualreport)Thepastgrowthof20102014
showsLululemonsintenttoexpandnationallyandmoveintootherexistingmarketsand
competeforthatbusiness.

Refrences
http://www.businessinsider.com/whatisluon20133(businessinsider)
http://investor.lululemon.com/secfiling.cfm?filingID=13971871421(annualreport
2014)
http://info.lululemon.com/education/fabricsandtechnologies(lulufabrics)
http://yogabycandace.com/blog/athletavslululemon(athleta)
http://www.lululemon.com/stores(maps)
http://www.environicsanalytics.ca/prizm5(PRIZM5)
http://www.statcan.gc.ca/startdebuteng.html(statistics)
http://www.businessblueprint.com/posts/successstories/secretstosuccesslululemon/
(keyfac)
http://strategyonline.ca/2015/03/04/canadianconsumerstocutspending/(cutspend)
http://www.wem.ca/aboutwem/overview(WEM)
http://www.yorkdale.com/about/(YD)
http://www.oakridgecentre.com/(oak)