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lululemon athletica PR Plan
Jessica Glackin Melissa Iarocci Maddie Ruberg
Kelsey Trif Mary Yeager
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Background lululemon athletica inc. is a retailer of high-end, yoga-inspired athletic clothing that operates primarily in North America and Australia, and is headquartered in British Columbia, Canada. When founded in 1998 by Dennis “Chip” Wilson, a Canadian businessman, the company was created in order to “fill a void” in the women’s athletic apparel market. Wilson created a mission, which still drives the company today, of “creating components for people to live longer, healthier, fun lives.”1 It was not until November of 2000 that Wilson opened the first lululemon store in Vancouver, Canada. lululemon’s dedication to promoting a healthy lifestyle sets it apart from competitors. Its manifesto is a compilation of sayings and advice to motivate others to adapt a positive lifestyle. The manifesto offers everything from relationship advice, such as “10-15 friends allow for real relationships,” to health advice like, “Dance, sing, floss and travel.”2 The lululemon brand has positioned itself as a company that empowers others to lead healthy lifestyles. lululemon’s community-based strategy enhances its brand and ensures guest loyalty. The brand’s key strategies are to create innovative athletic apparel that offers a combination of performance and function with style; to operate business in areas central to communities; to create an educational and friendly guest experience; and to market on “grassroots” levels in the community through social media and word of mouth.3 As of February 2, 2014, lululemon has 254 stores in the United States, Canada, Australia and New Zealand.4 Stores are located in urban shopping areas, including malls, lifestyle centers and trendy communities. Unlike big name brands, such as Nike and Under Armour, lululemon only sells its apparel at its own stores, not to big-box retailers, such as Sports Authority or Nordstrom. This is referred to as a vertical retail strategy and allows lululemon to have more control over its brand. lululemon’s primary target market is adult women, but it has also developed products for men and youth. In 2009, lululemon created a new brand marketed toward female youth called ivivva athletica. This brand consists of “dance-inspired” apparel and
1 "Lululemon Athletica: Our Company History." Our History. Web. 10 Nov. 2014. <http://www.lululemon.com/about/history>. 2 "The Lululemon Manifesto." Our Manifesto. N.p., n.d. Web. 11 Nov. 2014. <http://www.lululemon.com/about/manifesto>. 3 Online, Inc. Edgar. "Lululemon Athletica Inc. Form 10-K (Annual Report)." 27 Mar. 2014. Web. 8 Nov. 2014. <http://files.shareholder.com/downloads/LULU/3617209538x0xS1397187-14-21/1397187/filing.pdf>. 4"Lululemon Athletica Inc (LULU) Snapshot." Businessweek.com. Web. 8 Nov. 2014. <http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=LULU>
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appeals more to a younger crowd. Additionally, lululemon has developed a men’s brand that holds much room for growth. In 2013, lululemon faced several controversial issues that caused major setbacks for the company. On March 17, 2013, lululemon announced it was removing its black luon yoga pants from shelves due to complaints from customers that the pants were see-through.5 As a company that emphasizes the quality of its brand and products, this contradicted the company’s values and caused sales to plummet. lululemon handled the situation by inviting all affected customers to return the pants and exchange them for a different pair. It also posted an apology on its website. The company blamed the sheerness of the pants on the change in production overseas.6 On November 5, 2013, Wilson was interviewed about his new meditation method, but the interview quickly took a turn for the worse after being confronted about the luon pant recall. When referring to the see-through luon pants, Wilson stated that, “Some women’s bodies just actually don’t work.” He then proceeded to blame consumers by saying, “It’s really about the rubbing through the thighs, how much pressure there is over a period of time, how much they use it.”7 For a brand that promotes healthy lifestyles and claims to value the acceptance of a healthy body image, these statements were damaging to the company’s image. Wilson posted an apology video on lululemon’s Facebook about how he was primarily sorry for hurting the employees, whom lululemon refers to as “educators.” He stated, “I’m sad for the repercussions of my actions…sad for the people of lululemon who I care so much about.”8 Wilson completely disregarded customers who were impacted by the luon pant defect and “fat-shaming” statements. Furthermore, the video was not perceived as sincere and did not positively affect the business. In 2013, after facing multiple controversies, the CEO Christine Day, CPO Sheree Watson and Chairman Chip Wilson stepped down from their positions. At the end of 2013, Laurent Potdevin, former president of TOMS shoes and Burton Snowboards, took over as CEO. He hoped to use his previous experience to improve the reputation and image of lululemon and gain back its loyal customers. Environmental Analysis 5 Lululemon Athletica’s Product, Employee and Public Relations Issues. Case Study. Ontario:
Richard Ivey School of Business, 2014. Digital. 6 "Lululemon Gets Its Groove Back." The Huffington Post. Web. 11 Nov. 2014. <http://www.huffingtonpost.ca/2013/06/03/lululemon-luon-pants-recall_n_3380403.html>. 7 Lululemon Athletica’s Product, Employee and Public Relations Issues. Case Study. 8 Lululemon Athletica’s Product, Employee and Public Relations Issues. Case Study.
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1. Competitive Forces: lululemon’s competitors are retailers of athletic apparel, specifically women’s athletic apparel. While lululemon has created a brand image for itself and acquired loyal customers, there are still many athletic apparel companies that consumers could go to that may be more affordable and innovative, such as Nike, Under Armour and Lucy.
2. Economic Forces: A recession or economic uncertainty may affect the amount of business lululemon gets. Economic conditions, including increases in unemployment rates, economic downturns, etc. affect the company because consumer demand may decline and customers might cut back on spending.
3. Political Forces: lululemon’s failure to comply with trade and other regulations
put in place by the government could potentially result in negative publicity for the company. Also, because lululemon does business overseas, understanding the possibility of different rules and regulations of business operations outside the US and Canada will prevent any negative situations in the future.
4. Technological Forces: After the setbacks that lululemon faced in 2013, there was an increase in expectation for information from the company. It is important that lululemon continues to utilize social media as a form of communication with the public, as well as other digital channels, in order to maintain clear communication with customers.
5. Sociocultural Forces: North America has recently seen an increase in the value
people put on healthy living, and the number of people who do yoga has increased by 87 percent in the past five years. With this increase, three-quarters of yoga participants are female.9 Considering lululemon’s primary target audience is women, this is good news for the company and its market. Also, lululemon has a social responsibility to position itself as a reliable and ethical practice. If it does not maintain this image, then it may face negative publicity and a bad reputation.
SWOT Analysis Strengths
1. The company’s community-based strategy allows for a more personal connection with guests and community members. It values feedback from its customers and fitness practitioners to improve its products. The company also hosts community and in-store events to increase brand awareness.
2. lululemon’s vertical retailing strategy has positioned itself as an elite athletic apparel company by only being sold at select locations. It allows educators to
9 "From Rooms to Retreats – Yoga Becomes Multi-billion-dollar Industry." Examiner.com. Web. 11 Nov. 2014. <http://www.examiner.com/article/from-rooms-to-retreats-yoga-becomes-multi-billion-dollar-industry>.
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interact directly with guests, and it reinforces its guest loyalty. This strategy also sets the company apart from its competitors and allows for more control over its brand image.
3. The well-trained educators at lululemon ensure that guests have a personal and educational shopping experience. Educators are required to set their own goals and immerse themselves into the world of healthy living, making themselves more relatable to guests who also value health and wellness.
Weaknesses
1. lululemon’s “grassroots” marketing strategy is weak because it relies heavily on social media and word of mouth. This strategy reaches a limited amount of people and could reach a larger audience if the company expanded its advertising efforts on television, billboards and magazines.
2. lululemon relies heavily on third-party suppliers for the production and manufacturing of its products. The company does not have any long-term contracts with suppliers, causing it to compete with other companies for fabrics, raw materials and production.
3. The expense of lululemon products may affect its annual profit because its products are not affordable for many people. Averaging at about $82-$100 per pair of pants, lululemon has bigger individual sales, but overall, a lower income due to a smaller customer base.10 The price of products may also hurt lululemon during holiday season because it doesn’t offer seasonal sales (e.g. Black Friday.)
Opportunities
1. International expansion outside of North America, Australia and New Zealand would be a huge opportunity for growth. Currently, lululemon operates out of 254 stores in North America, including 171 in the United States.11 If the company expanded into Asia and Europe, it would reach a broader audience and increase its profits.
2. lululemon could increase its profits by expanding its men’s and youth brands. Considering the company markets mainly toward women, it would be beneficial to develop more of a men’s line and grow its youth brand, ivivva athletica. This would establish itself as a brand that targets several different demographics, not just women.
3. An opportunity for a better marketing strategy would be to develop partnerships with professional athletes or healthy lifestyle centers. Athlete endorsements help gain brand awareness and ensure consumers of its reliability. However, it is
10 Online, Inc. Edgar. "Lululemon Athletica Inc. Form 10-K (Annual Report)." 27 Mar. 2014. Web. 8 Nov. 2014. <http://files.shareholder.com/downloads/LULU/3617209538x0xS1397187-14-21/1397187/filing.pdf>. 11 Online, Inc. Edgar. "Lululemon Athletica Inc. Form 10-K (Annual Report)." 27 Mar. 2014. Web. 8 Nov. 2014. <http://files.shareholder.com/downloads/LULU/3617209538x0xS1397187-14-21/1397187/filing.pdf>.
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important to pick the right endorser to positively resonate with the company’s key audiences. Partnering with lifestyle centers or gyms would directly target lululemon’s key audience and increase its profits.
Threats
1. lululemon is in competition with retailers of athletic apparel, such as Nike, Under Armour and adidas. It is also in competition with retailers of women’s athletic apparel, such as The Gap and Lucy.
2. Cheaper products at different retailers are a threat to lululemon because its apparel is retailed at a higher price than most of its competitors. Potential customers may not be willing to pay a high price, and may choose to go get similar apparel for a lower price.
3. Founder Chip Wilson still owns stakes in the company and remains on lululemon’s board. After causing major complications for the company, Wilson’s position may be a threat for its future reputation and success.
Problem Statement lululemon needs a long-term strategic PR plan that will improve its reputation among current and prospective guests, as well as its employees and investors. This will be done by increasing innovation initiatives and representing itself as a welcoming and community-conscious brand. Goal Statement For lululemon to be seen as a quality brand that empowers people to lead healthy lifestyles. Key Public 1: Investors The first key public consists of current and potential institutional investors holding more than 500,000 shares. As a publicly traded company, continued interest from investors and shareholders is imperative to the survival and profitability of lululemon. This external public determines the value of the company as well as its potential for growth. Currently, there are 355 institutions that hold 109,374,108 lululemon shares. Among the top 5 holders are FMR LLC, Capital Research Global Investors, Manning and Napier Advisories LLC, Thornburg Investment Management Inc., and Vanguard Group Inc. In addition, Chip Wilson, founder and previous CEO, owns roughly 14% of the company.12
12 "Lululemon Athletica Inc. Ownership Summary." NASDAQ. N.p., 11 Nov. 2014. Web. 11 Nov. 2014. <http%3A%2F%2Fwww.nasdaq.com%2Fsymbol%2Flulu%2Fownership-summary>.
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The umbrella term “institutional investors” refers to pension funds, mutual funds, money managers, insurance companies, investment banks, commercial trusts, endowment funds, hedge funds and some hedge fund investors. Institutional investors account for half of the volume of trades on the New York Stock Exchange and have tremendous influence over the stock market.13 Internally, lululemon has devised a set of shareholder tools to communicate with its investors. These tools include the “investor briefcase,” an online portfolio management portal; daily “snapshots” of financials; customizable email alerts that notify subscribers of press releases, SEC filings, events, and stock information; and a mobile platform.14 While these tools are sufficient in creating transparency between lululemon and its investors, the most effective way to influence shareholders’ decisions is through the media, more specifically through analysts. Analysts evaluate companies, determining their value and potential for growth and estimate their reported earnings.15 Investors follow their opinions and prediction as they make decisions about where to put their money. Analysts, like the media, have the ability to positively or negatively influence public perception of a company. Therefore, it is equally important that lululemon’s PR initiatives reach analysts as investors. Over the past year, the price of lululemon stock has fluctuated greatly, with stock prices as high as $72.22 per share and as low as $36.26 per share.16 Stock prices have changed drastically as a result of issues with product quality and brand perception. While lululemon never ceased to be profitable, its previously climbing stock prices and exponentially increasing profit margins began to slow. Currently, lululemon’s stock price ranges between $42.00 and $43.00 per share; roughly $6.00 higher than its low, but still short of its high of $72.22.17 lululemon’s 2013 annual report describes the year as a “year of challenges.”18 Retaining its current investor base, as well as acquiring new shareholders, must be an 13 Renaud, Rob. "What's the Difference between Institutional and Non-institutional Investors?" Investopedia. N.p., n.d. Web. 11 Nov. 2014. <http://www.investopedia.com/ask/answers/06/institutionalinvestor.asp>. 14 "Shareholder Tools ." Investor Relations. Lululemon Athletica, Inc., 11 Nov. 2014. Web. 11 Nov. 2014. <http://investor.lululemon.com/alerts.cfm>. 15 Schmidt, Michael. "Stock Analysts: Should You Listen?" Investopedia. N.p., n.d. Web. 11 Nov. 2014. <http://www.investopedia.com/articles/stocks/10/stock-analysts.asp>. 16 "Stock Information." Investor Relations. Lululemon Athletica, Inc., 11 Nov. 2014. Web. 11 Nov. 2014. <http://investor.lululemon.com/alerts.cfm>. 17 "Stock Information." Investor Relations. Lululemon Athletica, Inc., 11 Nov. 2014. Web. 11 Nov. 2014. <http://investor.lululemon.com/alerts.cfm>. 18 Online, Inc. Edgar. "Lululemon Athletica Inc. Form 10-K (Annual Report)." 27 Mar. 2014. Web. 8 Nov. 2014. <http://files.shareholder.com/downloads/LULU/3617209538x0xS1397187-14-21/1397187/filing.pdf>.
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essential part of lululemon’s rebuilding strategy. The company needs to position itself as a leader in innovation and work to repair its reputation. Key Public 2: lululemon guests The second key public consists of lululemon customers who are referred to as “guests.” lululemon specifically targets women who are financially stable, athletic and in between the ages of eighteen and forty. The guests are an external public who share no relationship to the company but have the power to influence how people perceive the brand. In any clothing company, customers create and foster the reputation of the brand. Therefore, guests must be treated with the upmost respect and care, to ensure a positive reputation among consumers. lululemon describes its target customer as a “sophisticated and educated woman who understands the importance of an active, healthy lifestyle... to achieve physical fitness and inner peace.”19 The backbone of lululemon incorporates promoting this active and healthy lifestyle to women. This allows for the clothing to match up with the lululemon lifestyle, which in turn draws in the target audience. Additionally, according to evidence in sales statistics, “in the US, women’s active wear sales leapt 9% in 2013 compared to the year before.”20 Active wear and athletic apparel are on the rise, and lululemon is appropriately following that trend. A related notion to this target audience is the concept of LOHAS, which stands for Lifestyles Of Health And Sustainability.21 lululemon’s target audience falls directly under the typical LOHAS consumer. From a business perspective, it is important to understand the LOHAS consumer because this particular group is a growing part of the population who bases their consumption of products off healthy lifestyles. lululemon guests fit into this population and are constantly making consumerist decisions based off their value of a healthy lifestyle. lululemon specifically targets this group of individuals because they are currently one of the top consumers. The L.A. Times recently reported that “brands are eager to quickly roll out new merchandise because the core active-wear shopper is the ultimate consumer: female, relatively young, fashion-forward and willing to spend money.”22 lululemon targets women who are busy with a career but still concerned with maintaining healthy lifestyles, which fits into the brand perfectly. 19 Lululemon-Additional Background. Ivey Publishing, 10 Sept. 2014. PDF. 20 Smith, Kaite. "The Sportswear Revolution: Get Set, Go! |." EDITD. 19 Mar. 2014. Web. 11 Nov. 2014. 21 French, Steve, and Gwynne Rogers. "Understanding the LOHAS Consumer." LOHAS: Lifestyle of Health and Sustainability. Web. 11 Nov. 2014. 22 Gray, Emma. "Lululemon: Why Are Women Willing To Spend So Much Money On Workout Clothing?" The Huffington Post. TheHuffingtonPost.com, 9 Apr. 2012. Web. 11 Nov. 2014.
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lululemon guests receive most of their information through social media. Most marketers would see rapid social media growth as a positive attribute for the company. However, according to Michelle Hill, an account executive at The Ramey Agency, “lululemon has learned [that] growth can be a mixed blessing, especially if the brand isn’t fully prepared to handle the unintended consequences.”23Although social media blew up the company’s name, the rapid internet growth was due to the story of the scandal. Repairing the company’s presence on social media can only be accomplished by reaching this audience. Patterns demonstrating an appreciation for an active lifestyle in the United States are still rising. For example, according to the New Year’s Resolution market, “there was a 38% increase in the number of online mentions of sportswear in January, compared to December 2013.”24 Therefore, there is still a demand for sportswear and healthy lifestyle products from a consumer perspective. lululemon has active wear for yoga, running, and exercising, which are just a few of the popular products that this specific audience demands. The reconstruction of the brand and ensuring the quality of the product is crucial for lululemon to gain back its guests and its revenue. Key Public 3: lululemon educators The third and final public is an important internal audience, lululemon “educators.” Educators are the company’s sales associates who work the floor at lululemon stores. The company prefers the title of educators because “their main role is to effectively educate guests on the fabrics, features, fit and function of our product, our culture and the communities we belong to”.25 Since these associates are the ones in stores interacting with guests, they act as the face of lululemon’s brand. It is important that they make a good impression on customers, are experts on the product and represent the core values of lululemon. Additionally, it is crucial that they know how to respond to negative press and any PR crises because they are the most accessible points of contact and will be approached by community members. lululemon employees have to be at least 18 years old, preferably having completed a minimum of high school education.26 However, educators specifically seem to consist of 22- to 34-year-old Caucasian females who have attended college for at least one to
23 Hill, Michelle. "See-‐Through Pants? What Can Happen When Brands Grow Too Fast." The Ramey Agency News and Events. N.p., n.d. Web. 06 Dec. 2014. 24 Smith, Kaite. "The Sportswear Revolution: Get Set, Go! |." EDITD. 19 Mar. 2014. Web. 11 Nov. 2014. 25 "Job Details - Lululemon Careers." Lululemon. Lululemon Athletica, n.d. Web. 7 Nov. 2014. <http://lululemon.com/about/careers/job-details/?jobId=006933>. 26 "Job Details - Lululemon Careers." Lululemon. Lululemon Athletica, n.d. Web. 7 Nov. 2014.
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three years, or have graduated college.27 They are both full-time and part-time employees who earn nearly $13 an hour, and work weekdays and weekends.28 Part-time educators most likely do not need the hourly pay to support themselves because they would not make enough to do so. These employees may include students, parents of young children, workers with a second job or financially stable employees that do not need the wage to live. However, full-time educators would earn enough to support themselves, but not a family.29 Similarly to part-time employees, full-time employees with multiple dependents most likely have a dual income or other resources to be financially stable. Educators are committed to healthy living, and passionate about yoga and exercise. They are not required to be yoga practitioners as they were when lululemon first opened. However, the company does encourage its sales associates to enroll in “gym, yoga and other fitness facilities,”30 and even incorporates “group yoga”31 into its employee training. Since lululemon educators are recognized for their “superior commitment to healthy living,”32 they most likely reside in the LOHAS consumer segment. These consumers are leaders and early adopters in their attitudes “toward the environment, society and socially responsible business.”33 They are brand loyal and not price sensitive, which follows previous statements regarding their financial stability. More often than not, this group purchases food and beverage products that are pesticide-free, natural, without trans-fat and in environmentally friendly packaging. It is apparent that educators strive to be physically, mentally and spiritually healthy, and prefer sustainable and innovative goods. As far as the status of educators at lululemon, the company strives to have exceptional employee relations by creating a supportive and encouraging work environment. 27 Simmons OneView. Experian Information Solutions, 2014. Web. 7 Nov. 2014. <https://oneview.experian.com/main/#>. 28 "Lululemon Athletica." Job-Applications. Job-Applications, n.d. Web. 6 Nov. 2014. <http://www.job-applications.com/lululemon-athletica-application/>. 29 Glasmeier, Amy K. "Introduction to the Living Wage Calculator." Living Wage Calculator. Massachusetts Institute of Technology, 24 Mar. 2014. Web. 08 Nov. 2014. <http://livingwage.mit.edu/>. 30 "Lululemon Athletica." Job-Applications. Job-Applications, n.d. Web. 6 Nov. 2014. 31 Mann, Mary. "What It Was Like to Work at the Odd, Cultish Lululemon." Alternet. Birocreative, 31 Dec. 2013. Web. 6 Nov. 2014. <http://www.alternet.org/what-it-was-work-odd-cultish-lululemon?page=0%2C4>. 32 Lululemon Athletica Inc. – Moving Forward with Humility. Case Study. Ontario: Richard Ivey School of Business, 2014. Digital. 33 French, Steve, and Gwynne Rogers. "Understanding the LOHAS Consumer." LOHAS: Lifestyle of Health and Sustainability. Lohas, 2012. Web. 6 Nov. 2014. <http://www.lohas.com/Lohas-Consumer>.
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Educators are pushed to “reach their full professional, health and personal potential” with the assistance of complimentary “training, personal development workshops and goal coaching.”34 Although a lot of lululemon employees are drawn to the company because of these benefits and its motivational work environment, a lot of pressure is placed on internal members. Such high standards for personal achievement might contribute to a deficiency in esteem needs. Additionally, pressure to maintain a positive attitude and healthy lifestyle has led some employees to speak ill of the company and describe its culture as “cult-like.”35 lululemon would benefit from creating an employee recognition program that acknowledges and celebrates its educators, as well as altering employee expectations to prevent further harm to its reputation. Objectives Investors Objective 1: Educate media about corporate strategy by conducting background meetings with 6-8 key media outlets semi-annually. Strategy 1: As media is one of the most effective ways to reach shareholders, we recommend that lululemon brief key media semi-annually to create widespread positive attention about the brand. As core messaging and focus, we recommend that lululemon push product innovation and new technology. This will reestablish lululemon as a premium brand and provide them with an opportunity to engage both analysts and shareholders. Tactics
• Establish relationships with relevant beat reporters at 6-8 key media outlets o Media should vary in beat to engage a wide range of
audiences/shareholders § I.e. Fast Company, Fitness, Women’s Health, Cosmopolitan,
AdWeek, Forbes, etc. o Schedule semi-annual meetings with contacts at each publication o Lululemon’s spokesperson (likely an executive) will brief reporters on
upcoming products, innovations and technologies o Key messaging will incorporate an “industry leading” voice, positioning
lululemon at the forefront of innovation Objective 2: Enhance corporate reputation amongst lululemon shareholders by hosting an annual conference on April 2. 34 Lululemon Athletica’s Product, Employee and Public Relations Issues. Case Study. Ontario: Richard Ivey School of Business, 2014. Digital. 35 Lululemon Athletica’s Product, Employee and Public Relations Issues. Case Study.
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Strategy 1: In addition to media, one-on-one communication is the most effective way to engage shareholders and build trust. We recommend that lululemon host a conference April 2, that will allow lululemon to discuss fourth quarter results (as they will have been released), recap the previous fiscal year and discuss plans for growth in the upcoming year. In addition, a conference will establish transparency between executives and shareholders and allow lululemon to share new technologies, thus increasing investor confidence. Tactics
• Host an annual conference for key investors on April 2 o Send out formal, printed invitations November 1
§ Extend invitation to top 30 institutional investors o Assist with travel/accommodation reservations as necessary o Conference Schedule
§ Begin at 9 a.m. and end at 5 p.m. with a one-hour lunch break § 9-10 a.m. conference will begin with an external keynote speaker
(key thought leader or strategic partner) § 10:15-12 p.m. Potdevin will present on previous years
financials/plans for moving forward § 1:15-2:30 p.m. “Ask the Management” session to create
transparency between shareholders and upper management § 3-5 p.m. Potdevin and lead innovation team will present on
upcoming technologies in products and guest experience o Send thank you notes to attendees
• To maintain communication after the conference, develop and distribute an
investor newsletter quarterly o This newsletter will update shareholders on the latest technological
advancements, as well as upcoming product innovation. o Will contain detailed, technical information with an emphasis on financial
benefit § “Industry leading” voice to position lululemon at the forefront of
apparel innovation o Push content though the investor portal and via email.
Guests Short-term Objective: Completely resolve the 2013 scandal regarding the luon pants as well as Chip Wilson’s lingering poor publicity by January 20, 2015. Strategy 1: We recommend that lululemon continue to drive community-based CSR initiatives to build positive brand perception. Customers are a great concern for the company’s reputation, so CSR initiatives are particularly desirable. By expanding on its
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current initiatives, lululemon will gain positive media attention and reposition itself as a socially responsible brand. Tactics
• Implement a Marathon High program surrounding the 2015 Brooklyn Half Marathon.
o Logistics: § Appoint a program leader and two coaches to lead the team. § Recruit participants in the Brooklyn City School districts middle
and high schools. • Promote and present the program to students at assemblies,
lunch hour and in school publications. • Leverage school social media and online platforms if
applicable. • Goal of 50 participants
§ Begin training participants (5 months prior to the race). • Outfit participants in lululemon attire for the duration of their
training (allow them to test new products, technology, etc.) § To diversify participant experience, hold bi-weekly health and
wellness education workshops. § Run in the 2015 Brooklyn Half Marathon.
• Create event-specific attire for the team. o Publicity:
§ Issue a monthly press release to update investors and the community on team progress and happenings.
§ Use social media to engage and update followers on Marathon High Brooklyn’s successes.
• Athlete profiles, wellness workshops, training, day of the race
§ Pitch to relevant lifestyle publications (e.g. Fast Company, Mashable, Runner’s World)
§ Pitch to both national and local media. o Moving Forward:
§ Implement similar programs for half marathons across the country. § Facilitate 15 Marathon High programs across the country by 2020.
Long-term Objective: To increase customer satisfaction of all lululemon guests by December 1st, 2015. Strategy 1: To accomplish this objective, we recommend that lululemon continue to promote a healthy and active lifestyle. This strategy aims to regain trust and establish a positive brand for the company. Emphasizing the company’s values of achieving a healthy lifestyle will help repair the long-term reputation of company.
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Tactics • Create a customer loyalty program called Healthy Body Campaign to improve
long-term relationships with guests. o Enter every guest’s contact information into the lululemon system and
keep record of purchases. o Offer deals for members of the loyalty program (e.g. for every five pairs of
pants bought, one pair is 25% off). o Send out emails to keep guests up to date about the current events of the
company. o Connect with customers of loyalty program through content channels
such as Twitter, Facebook and Instagram. • Design the campaign to promote healthy lifestyles to lululemon guests who sign
up. o Offer healthy new recipe suggestions using local ingredients. o Send out a schedule for all of the yoga and exercise classes being
offered by lululemon that month. o Research local exercise groups and classes as a way for guests to get
actively involved in the community. o Create fun fact sheets with popular exercise techniques and healthy living
tips. • Send out a newsletter each month to guests who have signed up for the Healthy
Body Campaign. o Keep in contact with all guests taking the initiative to be a part of the
campaign. o Send the monthly newsletter to their email addresses and include an
electronic sign-up sheet for anything happening within the coming month. o Offer special courses to active members of the campaign.
• Update the website once a week with tips on how to live a healthy lifestyle. o The website should coincide with most of the information presented in
the Healthy Body Campaign. o Invent a way for people to learn more and sign up for the Healthy Body
Campaign through the website. Educators
Short-term Objective: Increase understanding amongst 100% of educators on lululemon initiatives (current and prospective) to be proactive, socially responsible and inventive by December 20, 2014. Strategy 1: To accomplish this objective, we recommend that store managers call a meeting with their store educators to inform them on lululemon campaigns that are working to enhance the company’s reputation. This strategy aims to increase transparency by bringing educators up to speed on all initiatives. Additionally, it serves as a method to motivate internal members by communicating why their knowledge on
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the brand is so important, and providing them with a time to voice their opinions and ask any questions. Tactics
• Hold the meeting at lululemon stores since many educators will already be there and know the location.
o The meeting could occur before the store opens or after it closes, so that the store is closed off to non-employees.
• Require that every educator attend. o If certain educators cannot attend the meeting, managers should
schedule a time that week to meet with them. o Managers should hold two to three sessions depending on how many
people missed the meeting. Educators must sign up for a session of their choice.
• Provide food and beverage at the meeting as an incentive to attend. o If the meeting is held in the morning, natural and organic coffee or
smoothies could be provided, along with snacks. If the meeting is held in the evening, protein bowls and water bottles could be provided.
• Prior to the meeting, store mangers should contact upper management to understand what initiatives are being made and what strategy Potdevin and executives want stores to take when communicating with guests and community members.
o This information needs to be relayed to store educators so that they are following the requests of executives.
• Store managers need to build in enough time for educators to be able to ask questions, contribute their ideas and express their opinions.
• A document should be provided to educators on current and upcoming initiatives, and how they should be relayed to guests and community members.
Long-term Objective 1: To evaluate the job satisfaction of 100% of educators in lululemon stores by September 1, 2015. Strategy 1: To accomplish this objective, we recommend that a PR team conduct primary research on educators to gauge individual and general attitudes, opinions, loyalty and job satisfaction with lululemon. This strategy aims to identify areas where educators may be unhappy at work, so that changes can be made to enhance said areas. Tactics
• Administer periodic surveys to educators. o Surveys could be conducted every three months, so that managers and
headquarters are able to gauge overall satisfaction of educators and measure their progress.
o These surveys should be done electronically.
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o Make these surveys anonymous because answers will more likely be open and honest that way.
§ Educators will not be pressured to answer in the “right” way, and will not fear repercussions for their answers.
o Provide educators with the option of signing their survey. This way, those who feel comfortable sharing will have the opportunity to express their personal feelings and discuss them with their manager face to face.
o Make the survey multiple-choice because the format tends to be more useful for comparison and analysis.
o Use surveys to assess satisfaction in areas such as, pay, promotion, supervision, tasks, coworkers, company culture, teamwork, productivity and work environment.
o Surveys could vary and be customized to specific topics every month to make them more in-depth and tailored to company concerns or interests (e.g. surveys on employee job satisfaction, job passion, self evaluation, employee retention).
• Conduct individual interviews with educators to identify issues that may not be confronted with surveys.
o Since interviews are time consuming, they could be done every six months as half-yearly check-ins with educators.
o Conduct interviews in private rooms at lululemon stores. o External conductors should lead these interviews.
§ It would be beneficial for store managers to have face time with their sales associates to product or maintain a positive relationship; however, if employees do not feel comfortable with their manager, they might not answer honestly.
§ External interviewers could be consultants practiced in areas of employee retention and job satisfaction.
o Interviews should be scheduled for at least 30 minutes. If an educator or interviewer feels they need more time to discuss areas of concern, additional time should be schedule if the conductor cannot extend the present interview.
o Most of the interview questions should be standardized, so that answers can be compared among educators. Yet, if there is a specific area of concern with an educator, add specialized questions to the individual’s interview.
o The external interviewer should take and save detailed notes, so that employee responses for all of the individual educators can be analyzed over time.
• Bring in a trained facilitator once a year to run a focus group on educators. o Focus groups are said to generate richer data than individual interviews
because participants collaborate with one another to provide useful and important feedback.
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o It’s important to be aware of the fact that while some educators may feel comfortable sharing with the group, others may feel inhibited by the lack of confidentiality.
o Facilitators should come prepared with follow-up questions. o Facilitators should also not allow any one participate to dominant the
conversation. • Store managers should monitor educators’ performance targets as an
observational method to assess job satisfaction.36 o To do so, use criteria such as “achieving bonuses, participating in
optional programs and performance in reaching goals.” o This will provide managers with observational data on levels of job
satisfaction that may not stand out in surveys, interviews or focus groups. Long-term Objective 2: To retain 90% of current educators at lululemon stores by January 1, 2016. Strategy 1: To accomplish this objective, we recommend implementing an employee recognition program. This strategy aims to ensure that educators feel valued and recognized by the company. Tactics • Publicly honor an educator every month at lululemon stores based on a
combination of their personal work ethic, attitude and sales performance. o These recognitions should be done individually within every store. o Since managers oversee all educators and observe their work and behavior,
they will choose the awarded employees. o Have an “Educator of the Month” wall where pictures of recognized
educators are posted. o This wall should outline every month of the year, so that educators can stay
up on the wall under their month for the entire year. o Educators could also include a fun lululemon-related fact about themselves
under their pictures (e.g. favorite yoga pose). o Certificates could be printed every month and given to the honored educator.
• Reward the honored member of the month with a special offering. o A work/life benefit could be offered, allowing the chosen educator to receive
a longer lunch, or the ability to come in late or leave early for one shift. o The “Educator of the Month” could receive a cash payout offering, such as a
small stipend, free lunch or a gift certificate to one of their favorite spots (e.g. store, restaurant, spa, workout class).
36 Larmore, Carrieanne, and Jenn Walker. "What Are the Different Methods of Measuring Job Satisfaction?" WiseGeek. Conjecture, 22 Oct. 2014. Web. 10 Nov. 2014. <http://www.wisegeek.com/what-are-the-different-methods-of-measuring-job-satisfaction.htm>.
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• At the end of every morning and evening shift, store mangers should get all educators together for a team huddle.
o During this huddle, managers should recognize one educator for their outstanding performance that day. Educators can also recognize one another for their work efforts that day or week.
• Store managers should obtain a document from corporate that outlines in-store employee expectations.
o This document should clearly outline expectations in areas of lululemon’s core values that pertain to employees: self responsibility and personal achievement.
o Post documents in break rooms where educators will see it every time they take a break.
o This document will serve as a motivational reminder for educators to strive for their full professional, health and personal potential.
Strategy 2: In addition to a recognition program, we recommend implementing a mentoring program with a goal-oriented feedback system. This strategy aims to develop stronger relationships between store managers and educators, and create a work environment where educators can grow. Tactics
• Store managers should schedule initial one-on-one meetings with educators to discuss specific long-term goals that employees would like to set and achieve during their time with the company.
o These goals will keep employees focused on the job, and will help managers motivate their educators in effective ways.
• Store managers should give both informal and formal feedback to their educators throughout the year.
o Provide formal, written feedback to educators once a year through annual performance reviews.
o Managers should have quick quarterly check-ins with educators to ensure that everything is running smoothly in regards to performance, job satisfaction and personal goals.
• Continue to offer employees frequent training, personal development workshops and goal coaching opportunities.
o Employees are more likely to stay engaged in their jobs as educators and committed to lululemon if the company makes investments in them and their career development.37
37 Yazinski, Sarah K. "Strategies for Retaining Employees and Minimizing Turnover." Strategies for Retaining Employees and Minimizing Turnover. Business & Legal Resources, 3 Aug. 2009. Web. 9 Nov. 2014. < http://hr.blr.com/whitepapers/Staffing-Training/Employee-Turnover/Strategies-for-Retaining-Employees-and-Minimizing->.
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Evaluation Key Public 1: Investors Objective 1: Educate media about corporate strategy by conducting background meetings with 6-8 key media outlets semi-annually. To measure this success:
• Identify number of articles written as a result of media partnerships. • Evaluate the effectiveness of key messaging and core objectives within the
article. • Calculate number of impressions from lululemon articles.
Objective 2: Enhance corporate reputation amongst lululemon shareholders by hosting an annual conference on April 2. To measure this success:
• Compare number of attendees year-over-year • Assess the percentage of existing shareholders retained annually. • Evaluate the number of new investors acquired annually.
Key Public 2: lululemon guests Short-term Objective: Completely resolve the 2013 scandal regarding the luon pants as well as Chip Wilson’s lingering poor publicity by January 20, 2015. To measure this success:
• Evaluate answers to the surveys to get a clear perception of lululemon’s reputation.
• Calculate how many customers the company gained/lost since the Chip Wilson incident by evaluating purchases since the incident and subscriptions to emails and newsletters.
Long-term Objective: Assess customer satisfaction of all lululemon guests by December 1st, 2015. To measure this success:
• Frequently check the blog section of the website, where the guests can voice their opinions.
• Track guests’ purchases through the customer loyalty program. • Track how many guests signed up for the “Healthy Body” Campaign.
Key Public 3: lululemon educators
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Short-term Objective: Increase understanding amongst 100% of educators on lululemon initiatives (current and prospective) to be proactive, socially responsible and inventive by December 20, 2014. To measure this success:
• Evaluate educator attendance at informational meetings. • Have educators fill out evaluation forms after the meeting to get a good sense of
its impact. Long-term Objective 1: To evaluate the job satisfaction of 100% of educators in lululemon stores by September 1, 2015. To measure this success:
• Evaluate surveys taken every three months to gauge employees’ satisfaction based on their responses.
• Within two years, assess the progress of employees through the half-yearly interview check-ins and yearly focus groups.
Long-term Objective 2: To retain 90% of current educators at Lululemon stores by January 1, 2016. To measure this success:
• Calculate the retention rate of lululemon educators from November 11, 2014 to January 1, 2016.
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Appendices Key messages Key Public 1: Investors
• We understand that our stock price has fallen since fiscal 2013 and we are leveraging innovation and in-store technologies to improve our valuation.
• It is important to us that our stakeholders feel informed about our companies financial standing and we are doing our best to ensure open lines of communication.
Key Public 2: lululemon guests
• Your happiness with the quality of lululemon products is important to us and we are making our best efforts to hold our brand to the highest of standards.
• We understand any past frustration with the brand but hope to gain your trust back with our new form of management and leadership.
Key Public 3: lululemon educators
• As an internal member, it is important that you are aware on the happenings of lululemon, so that you are prepared in answering to guests, community members and media.
• As the face of lululemon’s brand, it is important that you understand how to make responsible and appropriate statements to the public.
• Your hard work is recognized, appreciated and needed. We would not be as successful without your efforts and accomplishments.
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