Celeste Burgoyne, senior vice president of the Americas for Lululemon Athletica, explained the company’s philosophy when it comes to retail: “make the store the ultimate experience.”
“Some people really underestimate how important a store is,” she added. “It’s not just a place where a transaction takes place.”
In Lululemon jargon, a sales associate is called an educator. “We continue to invest in them,” she said. Burgoyne said Lululemon hires as educators athletes from the communities where the stores are located.
“We hire people who understand yoga and sports,” she said. “We look for leadership skills. We train them really well in product and support them to create a local experience in the store.”
Lululemon is channel agnostic, Burgoyne said. “I’m proud that we’ve taken the channels and really merged them,” she said, referring to online, digital and mobile. “We’ve taken out the competition from each channel and let them do what they do best. We’re letting the guest shop how he or she wishes.”
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That said, key metrics about spend and dwell time are “much higher and longer for stores.”
“We’ll continue to leverage our digital penetration,” Burgoyne said. “Our philosophy is the stores get credit for digital sales. We don’t penalize the stores for e-commerce returns. Different pieces of our compensation make sure all those tensions are relieved.”
Noting that brick and mortar comprises 80 percent of Lululemon’s business, Burgoyne said, “We look at how physical and digital affect the whole. By leveraging all different channels, we’ve been able to create exponentially more powerful relationships with guests.”
In terms of store locations, Burgoyne said the company been evaluating its stores with a critical eye for the last 10 years and has optimized the portfolio.
“We have 300 stores that all work,” she said. “They’re in the right location and are the right size for their [respective] markets.”
The average size of a community store is about 1,000 square feet, while an experiential store such as the Flatiron location in Manhattan is about 6,000 square feet.
“At the end of the day, digital is more powerful in terms of P&L,” she said. “Gone are the days of 1,000 stores in North America.”
Stores use the concierge model to connect guests to the best studios, classes and instructors, and Lululemon offers its own classes in its stores.
Lululemon has a unique way of identifying markets for stores. Burgoyne said when the company “gets pulled into a market” by consumer demand, it first opens a showroom.
“They are small, fun little boutiques,” she said. “We hire someone athletic and are open four days a week. We do focus groups with products and when we see key metrics we know it’s time to open a store.
“We opened 50 showrooms in the U.S. and allowed that to tell us what markets were ready.”
In addition to stores and showrooms, Lululemon operates two labs in Vancouver and Manhattan where “we’re testing, piloting and trying.”