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“The success of our Power of Three formula in delivering on our 2023 growth strategy supports our goal to double (x2) the business over the next five years,” said CEO Calvin McDonald to analysts recently, referring to lululemon achieving its 2023 revenue projections in 2021 (two years ahead of schedule and a 40 percent increase over 2020). Accordingly, he’s projecting lululemon will double its 2021 results by 2026, (from $6.25 billion to $12.5). They anticipate total net revenues will increase 15 percent, at an annual compound growth rate by 2026. Earnings per share growth is also expected to outpace revenues growth.

Powering Ahead

McDonald has every reason to speak with such positivity. The Vancouver-based athletic apparel, accessories and footwear retailer was dominant in the athletic and athleisure space well before it became the posterchild of our current era. Even before the wellness trend and pandemic accelerator of at-home fitness (which also exploded its tech-embedded “Mirror” brand) and product innovations, like their Align collection, lululemon was the “go-to” brand for experiential nirvana.

Positioned as a community, lululemon hires local athletes, instructors and role models who mirror the brand’s lifestyle, calling them ambassadors who keep the store managers appraised of consumers’ feedback on product, service and other intelligence important to management. They also teach in-store classes and appear as models on the lululemon website and on posters in their local stores.

According to the NPD Group, from 2019 to 2021, lululemon gained more market share globally than any brand in in the adult active apparel industry — growing revenue from $3.3 billion in 2018 to $6.25 billion in 2021. Its rivals include giants such as Nike, Adidas and Under Armour, as well as up-and-coming brands like Vuori for men and Sweaty Betty for women.

In April 2019, lululemon laid out a number of financial targets, including doubling its then-nascent men’s business by 2023. It ended up achieving the men’s goal two years ahead of schedule and also tripled digital revenue from 2018 to 2021. Talk about positivity, McDonald said, “We’re in the early innings of growth,” and said they will continue to focus on its three strategic pillars to fuel revenue growth over the next five years.

1/Product Innovation

Having achieved its 2023 men’s growth target two years early, the company expects to double the size of its men’s revenues in 2021 by 2026, along with ongoing expansion in its women’s and accessories businesses. The Company will leverage Science of Feel, its distinctive lens for innovation, across categories, with significant runway for performance (Run, Train, Yoga and On the Move) as well as opportunities in tennis, golf and hiking activities, and new categories such as recently-launched footwear. They also announced the expansion of lululemon Like New, the brand’s first trade-in and resale program, now available nationwide in the United States.

2/Guest Experience

On top of tripling its digital revenue between 2018 and 2021, the company projects to double its current digital revenues by 2026. To accomplish this goal, lululemon will continue to create world-class experiences. McDonald gave away the secret sauce when he said, “We know how our guests sweat.”

In case you missed the significance of that statement as the single most powerful part of the brand’s DNA, please let me explain. In its literal interpretation they do know how their guests sweat because loyal yoga customers actually attend classes in their stores. However, the real meaning of the statement is that lululemon knows its guests so well on an individual level that they know how to personalize their products and shopping experience.

Positioned as a community, lululemon hires local athletes, instructors and role models who mirror the brand’s lifestyle, calling them ambassadors who keep the store managers appraised of consumers’ feedback on product, service and other intelligence important to management. They also teach in-store classes and appear as models on the lululemon website and on posters in their local stores.

lululemon’s site says that everything they do in building the ambassadorship program starts with authentic relationships. That’s why each ambassadorship begins locally in the stores. Their message to candidates is that when they become an ambassador, they are not just a partner, they are an extension of the brand and an inspiration to lululemon guests.

3/Market Expansion

lululemon is on track to quadruple its international revenue relative to 2018 in 2022. Under its new Power of Three ×2 growth strategy, lululemon expects to again quadruple its international revenues relative to 2021 by 2026. With significant runway in both new and core markets, lululemon is focused on ensuring local relevance and deepening connection as it continues to introduce the brand to more communities around the world. Engaging guests in Mainland China, growing its core markets, and scaling and entering new countries across APAC and Europe will be key to delivering on its new goal. The company also plans to open its first stores in Spain and Italy.

Impact People and Planet

Lululemon added its Impact Agenda priorities, including supporting its people and creating a healthier planet, to its successful Power of Three growth model (making the new program a power of four). The new plan includes focusing on building an environment that is equitable and inclusive, advancing equity in wellbeing across its communities, working to prevent environmental harm, and helping to restore the planet. They are aiming for 100 percent of their products to be sustainable by 2030.

And it remains committed to investing in its people and expanding its employee benefits, recently raising minimum base pay in North America and introducing more mental health, mentorship, and leadership programs for personal and career development.

What About Consumer Awareness?

In what I could define as the penultimate retail model, I was kind of astounded when Chief Brand Officer Nikki Neuburger said, “People who know us love us, but there are millions more people who are still not aware of the brand. At present, brand awareness in the U.S., one of lululemon’s most mature markets, is just 25 percent.” McDonald added, “For comparison, many other brands in this space are at about 85 percent. So, we see that as a really exciting opportunity as we continue to drive growth and get product into more hands.”

So, word of mouth advertising from their cult-like, neurologically connected (no, addicted) members has been so awesome to have resulted in the meteoric growth of this phenomenal brand, and a sales per-square-foot productivity measure of $1560. Some context? Apple is #1 with around $5500, Tiffany #2 at about $2500, and lululemon is #3.

Need I say more about the trifecta lululemon has perfected? On top of their power initiatives, they are known for mastering experiential retailing, compelling consumers to go to the store, spend more time there, spend more money, and become addicted to the point that they keep coming back, over, and over, and over.