Amazingly, Lululemon Turned Yoga Apparel Into a Must Have Item

For various reasons, none of which really have to do with the quality of the product, I am not a huge fan of Lululemon ("Lulu") wear.  I prefer Lucy.  But, judging from the the Lulu to Lucy ratio at my gym alone, I think Lulu is the apparel of choice.  According to a recent Wall Street Journal article, Lulu has been growing at an exponential pace--posting nine quarters of a 30% increase in sales over the past three years.  Also, according to the article, Lulu does not use conventional marketing techniques to increase demand for its products.  Instead, Lulu uses good ol' fashion customer contact to create an aura of scarcity of their products in order to encourage the customers to keep their products flying off the shelves. Lulu's Chief Executive spends hours in stores observing customers, listening to their complaints and suggestions and using that information to change products or stores.

In addition, Lulu places its product folding areas near the fitting rooms in order to eavesdrop on customers and Lulu has a has a large chalkboard for customers to write their complaints.  The complaints are then relayed to headquarters. 

Lulu execs thing that the company's growth will slow down due to the fact that the brand grew so fast--at some point, it has to slow down.  However, in its most recent quarter growth softened from 29-16% which is still above the norms of the industry.  Lulu creates a sense of scarcity for products in order to sell its product at full price.  New colors and seasonal items can expect to be in a store only 3-12 weeks in order to keep the stores "fresh."  The constant changeover also keeps Lulu customers coming back often to get the "latest and greatest."  Moreover, Lulu has a very strict return policy.  They definitely are not Nordstrom in that regard.