The Decline Of Lululemon And The New Expression Of Feminine Consciousness

Wedge

First guess what the secret of Vitoria, which once was red hot, big show and "angels", is currently several times the market value of lululemon.

... Five...

Fifth part.

Actually not yet. The secret of sexy underwear in Vitoria, Pink, the parent company of bath&body works, the parent line of LBrands, currently has a market value of $5 billion, less than lululemon's 1/5.

Too much? What's more, L Brands's income is four times lululemon, and LB's business mode is lighter than that of the latter.

In our recent cosmetic anti road show, experts once said that the awakening of female consciousness is related to two kinds of goods, one is make-up, and the other two is underwear.

In fact, in the former case, China's consumer market is from 0 to 1, which is very early in the way of Europe and America decades ago. The latter, the beauty of sexy lingerie has been flop in Europe and America, especially the graceful and graceful curve represented by Wei Wei, the perfect Bobbi, which has long been weary of female consumers. The vast majority of women are not able to reach the proportion of the angels in their whole life. It is a new consensus to balance their health and live in harmony with themselves.

Wall Street laments that the lag of values is devastating. Contemporary women no longer agree with this sexy, stock price hits eighty percent off directly. Hedge against it is the rise of lululemon, Davies's double strike of the high-end female sports brand.

This paper compares Lululemon with L brand (mainly discussing core brand). The former cut into the Female Yoga suit and the latter opened the glorious era of sexy underwear. However, since 2015, sports fashion and sexy aesthetics have embarked on two contrasting paths and transmitted from the operational data level to the capital market performance.

This article explores the shaping and exploration of women's consciousness and how it affects consumer behavior. The dimension of thinking falls on the two attributes of dress's function and style, with a view to developing enlightenment from the differentiation of Lululemon and Victoria 's Secret (hereinafter referred to as "VS" or "Wei Wei").

I. Lululemon and L Brands: lifestyle and ideas of trafficking

Lulu and VS are essentially selling lifestyles and ideas. Unlike clothing brands such as UNIQLO, Zara and so on, which are expanded through supply chain mode, Lulu and VS products are all optional consumer products with strong functional attributes (Yoga wear, underwear), while the style features are obvious (healthy, sexy), and brand identification is used to establish identification.

Lululemon:

The Canadian Yoga wear brand established in 1998 adopted niche marketing strategy (cut into the market of yoga clothes and locate the specific consumer groups of white collar women). Through the ability to identify and create product trends, and with the Athleisure (sports and leisure) craze, the bargaining power of products was obtained, and the growth space was rapidly opened through new products + new market + e-commerce channels.

The product structure is dominated by women's wear yoga clothing (more than 70%), and extends to men's clothing (about 20%), sports shoes and other new categories. In fiscal year 2018, the company's revenue reached US $3 billion 290 million, an increase of 24.1% over the same period last year, and the composite growth rate reached 25% in the past ten years. Benefiting from the fast penetration of men's wear market, men's clothing growth rate (20-30%) is larger than that of women's wear (10-15%).

Business models are mainly direct retail outlets (65%) and self operated electronic business (DTC, 26%). The "offline selection + online purchase" linkage mode is used for drainage, and Showrooms/labs is set up to display stores for new market introduction and brand image maintenance. 2019Q2 realized 17% growth in same store revenue, including comparable sales of +11%, +33% of comparable electricity sales, and growth of same store revenue mainly driven by growth of traffic and conversion rate of stores and networks (+30%).

North America is the main market (accounting for 87%), and the center of gravity is gradually shifting to the Southeast Asian market (China, Japan, Korea, etc.), accounting for 13% of the overseas market. 2019Q2 North America region +21%, Asia Pacific +33% (China +68%), Europe +35%, with fitness yoga and other lifestyle penetration in Europe and Southeast Asia, bring incremental space for revenue growth.

L Brands (virgin parent):

Professional retail women's clothing and care products group established in 1963. The group's most important brand is Victoria 's Secret (PINK), revere the female figure of dreamy sexy figure, and promote the female consumption behavior and establish the brand style through the sensory and visual stimulation brought by the super model underwear show. But in recent years, the decline and decline of VS declined, and its style was outdated. It failed to enter the new market in a timely manner to boost its business. VS seems to be fading away:

The brand structure is shrinking, focusing on the two parts of the women's underwear brand (VS/Pink) and the nursing brand (BBW).

In fiscal year 1.2018, the company achieved a revenue of 13 billion 200 million yuan (up to +4.8%) Bath & Body Works (BBW), accounting for 35%, supporting the company's current main revenue (compared with +12%), through the growth of aromatherapy and male business.

2.VS has been famous since its first great exhibition in 1995. Its glory has fallen to the altar almost 20 years later. The old beauty of sensual beauty seems to have lost its fans. The proportion of revenue declined from 63% in the peak to 56% in fiscal year 2018 (compared with -0.2%). With the gradual deterioration of its brand power and pricing power, extensive price reduction also failed to promote sales growth. The same store revenue (4 million 880 thousand US dollars, -2.5%) and Ping efficiency in the US region were declining (757 US dollars, -3.4%).

The 3. group is currently seeking to change the sale of the low-end underwear line Lasenza, closing the luxury store Henri Bendel and restarting the swimwear business line, but with little success.

The proportion of franchising was high (BBW North America accounted for 84%, VS North America accounted for 75%), and the pace of overseas expansion was slow. The group adopts a large number of partners business mode, though it can expand international business rapidly, but it is not conducive to brand image building and channel control, and has an internal conflict with the overall business strategy. At present, there are more than 2900 self operated retail outlets (about 700 overseas), which are distributed in North America, Europe, Asia Pacific and other regions. However, overseas income accounts for no more than 10%. In the case of blocked sales in North America, it was only in 2012 that the self operated retail stores gradually came out of North America, and 2016 began to reach the Chinese market.

Two, the change of consumption psychology: the rise of female consciousness and healthy lifestyle.

Focusing on the scale of values to the rise of women's consciousness, consumer behavior is reflected in:

1. women's status from subordinate to independence, from pleasing men to pleasing themselves, thus changing from simple pursuit of beauty to healthy and comfortable experience. In recent years, women's underwear preferences have been closed to steel underwear and sports underwear. According to data agency EBITED, in 2017, 80 underwear retailers in the world found that the sales of steel braced underwear decreased by 50% compared with the same period last year, while the liner bra decreased by 22% compared with the same period last year, while the new underwear without steel ring increased by 18% compared with the same period last year, while the athletic underwear grew by 27%.

2. the concept of gender has been expanded, the diversity of women's characteristics, and the unique brand tonality in style. No longer confined to the soft temperament such as beauty, gentleness and intellectuality, the female character also develops toward bodybuilding, independence, courageous and so on. Loli, a runaway brand of net red sports, declares "refuse to be mediocre, sexy, soft sprouting, fresh, cool, intelligent" and create unique brand attributes.

Behind the decline of Wei is the separation of values and social consciousness contained in their underwear products. The decline in ratings is evidence. The number of people watching the show has broken through the 10 million mark at its peak. In 2015, the ratings dropped by 30%, and the number of viewers dropped to 6 million 590 thousand. In 2018, the total audience number dropped to 3 million 270 thousand, of which 18 to 49 years old audience ratings were only 0.9. Women's sight shift is no longer intoxicated with the sexy charm of vivid colors. The traditional sex appeal maintained by Wei can only be lost in the environment where the target audience is shrinking.

On the other hand, the reason why the sports fashion represented by Lululemon can open the incremental market successfully is the demand creation created by the Enlightenment of sports cognition and the cultivation of exercise habits. With the rise of the global fitness boom, the number of participants in sports fitness has increased year by year. In 2018, the number of members of the global fitness club reached 183 million, and the number of fitness clubs reached 21. Nike, Adidas, Lululemon, UnderAmour and other sports brand value occupy the leading position in the global clothing brand, which confirms the change of people's life preference to sports health.

Returning to the function and style attributes of products, if we use the two dimensions of function and style to establish four quadrants, Lululemon tries to get the double premium of function and fashion from the first quadrant (high function and heavy style), and establishes consumer loyalty through technological innovation and product innovation. The application scene of Yoga suit is mostly gymnasium and outdoor. It needs to be displayed at the same time at the same time. It has both internal and external needs for style and function. While underwear is mainly used for everyday body wear, excessive design sense is slightly cumbersome. VS product strategy obviously presents the preference of heavy style and light function, and the functional attributes of underwear itself are weakened, and consumers' wearing experience is not good. When the style strategy fails, the premium brought by the design is invalid. This internal conflict aggravates the VS's dilemma.

Lululemon gets the bargaining power of products through stronger brand building. The improvement of gross margin of products is supported by technology iterative reduction of product cost, favorable product mix and lower price reduction. VS's brand power and pricing power are obviously impaired. The overall price reduction of products is a drag on gross margin performance. Lululemon products are priced at $70-118, and the price of its products is priced at $15-50, compared with the average price of $50 for underwear products.

Three, consumers touch: build emotional connections.

Lululemon does not adopt traditional marketing methods such as advertising and celebrity endorsement, but from the opinion leaders to the cultural community and then to the collective activities. It is directly linked with consumers to establish cognitive and emotional connections, and gradually enlarge the influence. The sales and management cost rate is stable at 30%-32%:

Experiential marketing: set up offline experiential stores (Showrooms) to enter new markets, enhance customer intuition experience by directly displaying products, and communicate with consumers or organize offline activities to form a basic customer base.

KOL mode builds up word of mouth and improves user stickiness: Lululemon first cooperates with local yoga instructors through yoga studios, health clubs, etc., and these brand ambassadors further cultivate fitness red men and sports talents on the social platform, forming a team of influential leaders in the field of fitness, thus directly cutting into consumers and improving consumer loyalty. At present, the company has more than 1000 brand ambassadors.

Community events + sports events to build brand awareness: the company holds large-scale sports events such as Vancouver marathon, and continues to open up brand awareness, organize yoga courses under the line, marathon courses to create community culture, thus establishing the most direct feedback mechanism, mastering the needs of consumers and promoting product upgrading and upgrading.

The marketing mode of L brand is single, and the marketing mode of "underwear big show + entity store" is becoming more and more invalid. In 2019, the company officially announced that it would stop holding the secret show. The transformation rate of consumer behavior is low, and the brand image is facing transformation. The departure of Edward Razek has announced the end of the show. The cost of hosting a show is more than 130 million US dollars, which is huge for marketing expenses.

Four. Conclusion

At the same time line, the performance of Lululemon and L brands in the capital market showed a clear differentiation. The former increased from nearly $28 at the beginning of 2007 to $195, up nearly 7 times, and the latest market value reached US $25 billion 250 million. The latter fell all the way, from $99 in December 2015 to $18.5, and the market value dropped from $27 billion 980 million in the peak period to $5 billion 120 million (as of September 23, 2019), and its market value shrank by more than 80%. The representation is that the performance gap reflected in the earnings report is directly transmitted to the stock price performance, but in essence, the core of the consumer behavior has changed.

Therefore, from the bottom up, from the perspective of women's consciousness and healthy lifestyle, this article explores the logic and choice of consumers' purchase of clothing. As mentioned above, the unique combination and positioning of function and style determine the audience, premium level and driving force of growth. Only by grasping the growth advantages of new products and new markets and following the trend of history can they be king. Brand culture emphasizes the management of brand image, and the close and effective emotional connection with consumers, rather than immersing in false prosperity and self revelry, so that we can find the right way forward at the fork road.