While Lululemon left little to the imagination with its see-through yoga pants crisis two years ago, the active wear chain has applied much imagination to its menswear, which could create renewed energy.
To be specific, Lululemon Athletica is directing our focus to an entirely different part of the anatomy. Its ABC pants, which stands for (apologies) anti-ball crushing, are hoped to make headway in what Lulu sees as a $1 billion opportunity: men’s clothing. Whether men will appreciate this kind of product and support the brand with more fervor, though, may hinge not only on their comfort with these new products but also on the message.
The market certainly comes with upside potential. Lululemon recorded a 16% gain in fourth-quarter same-store sales in the men’s business, thanks in part to the ABC pants, CEO Laurent Potdevin told analysts in a fourth-quarter conference call.
“With men’s, we saw continued success with our pant category anchored by the popularity of our core ABC pant,” he said. Such strong demand for comfortable men’s pants has the company considering larger store footprints.
A key consideration in such expansion is that size will matter, long term, if the marketing falls short. Lulu’s effort to meet demand by addressing a sartorial issue that transcends style indicates it has learned to think like its customers. (No doubt its credit card and online purchase data have helped it determine the potential of the men’s market.) The question – at $128 a pair – is whether the ABC pant addresses a valid need or is an attempt to resolve what for many men may be an unrecognized problem.
Regardless of the answer, if Lululemon puts the right marketing strategy behind its ABCs, they could become its crown jewel of menswear.
Who wears the pants?
The key here is the marketing will need to appeal to women as well as men, which highlights a key challenge for Lululemon – regardless of the potential of the men’s market, it cannot take its eye off the ball of its core business.
Women, after all, do purchase men’s clothing and sales have been strong. Total U.S. sales of men’s apparel rose 5% in 2013 (the most recent year for data), to $60.8 billion, according to the NPD Group. The sale of men’s pants alone rose 12%.
Men, however, represent just one growth market, and that is reflected in Lululemon’s own fiscal sales. For 2014, total revenue rose 13%, to $1.8 billion from $1.6 billion in 2013. Some of that gain can be traced to the addition of 10 Ivivva stores, which cater specifically to teen girls. Ivivva posted a same-store sales increase of 51% in the fourth quarter, making it a giant compared with the 16% same-store sales gain by Lulu’s menswear.
Lululemon plans to open more standalone Ivivva stores in 2015, while it operates just one men’s store. That location, in Soho, N.Y., opened in 2014.
Instead of more standalone stores, Lulu is centering its men’s growth on existing and combination stores, which makes sense. By putting its ABCs near the jog bras, the chain essentially doubles it purchase opportunity.
As Stuart Haselden, chief financial officer, put it to analysts: “We are seeing the potential for expanded store footprints, particularly as we have a growing men’s business that we are now working to ensure that we are presenting (in) the strongest manner.”
Six months after expanding one of its Canadian stores, it recorded a 90% gain in men’s sales, Haselden said.
The side-by-side merchandising not only expands market potential, it is a key distinguishing factor of the ABC pant. Yes, there are other anatomically friendly products out there.
Saxx underwear, designed for athletes and outdoorsmen, addresses the same need with patented technology. Its product is sold in men’s stores as well as boutiques that carry both men’s and women’s clothing. A key difference in Lulu’s merchandising is once a buyer is sold on a pair of ABCs, he or she can then be tempted into an $84 Metal Vent Tech shirt.
The trick is making the ABC message resonate with women. I have a hunch it may. The chances of this topic being broached among men and women are likely not high. Therefore, many women may just accept male discomfort as a problem and buy the pants, happy to have thoughtfully combined style with function.
But the marketing must resonate once the pants are brought home, as well. Trust is an important issue for Lululemon. Two years ago, it suffered a backlash after selling yoga pants that were sheer enough to see through in certain circumstances. It was not so much the $100 yoga pants that cost Lulu part if its reputation, however; it was how sales associates responded. Some news reports told of employees requiring customers to don the pants and bend over in order to prove their claims.
Which brings us back to how much marketing and the customer experience matter. Good marketing is about creating a need, or recognizing one that has not been acknowledged by the consumer (a great example is Swiffer). With its ABC pant, Lululemon is using innovation to shift the value proposition of one of the most basic of products, and in doing so has the potential to expand its business beyond the customer base that has been the foundation of its growth to date.