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420 proposal presentation
- 1. Lululemon in Sweden Connor Bolan, Tommy Lopez, Olivia Durnell, Sarah Monette, Jaclyn Wegener
- 2. Agenda ● Background of Lululemon’s efforts in the US and Europe ● Why we chose Sweden ● The Swedish Consumer ● Doing business in Sweden ● Challenges and competitors ● Entrance Strategy ● Questions
- 3. Background Lululemon is a high end athletic retailer based out of Vancouver, Canada -Known for its well informed employees and stores-turned-yoga-studios (complimentary yoga each week). - employees are trained to understand the product’s technical aspects, yoga, healthy diets and the community - Popular with major celebrities including Kim Kardashian, Rosie Huntington- whiteley, Kelly Rippa, Jessica Simpson, and Reese Witherspoon -Created their own types of fabric such as Luon, Luxtreme, Coolmax to create the best sweat free, great quality products - Have expanded to some new countries, but they do not have any unique brand offerings for people in those countries and they do not have many stores abroad even when yoga is an international craze
- 4. Entering other European countries ● First store in Europe- London ○ offered complimentary yoga classes around the city ● Started by selling through other retailers ○ Followed by showrooms ○ Two years later they opened their own store ○ Gained the public loyalty ○ When they opened the public was more than eager to shop
- 5. Why we chose Sweden GDP per capita Athletic citizens English-speaking Hofstede comparison
- 6. Swedish Trends- Workout clothing ● Very similar to the U.S. ● More conservative and warmer ● Good-looking and cool, without being too conspicuous ● Leggings and work-out clothes aren’t considered fashionable, instead they are meant to be used for their purpose: exercise. ● Less is more (basic, simple clothing) ● One of the world’s best dressed
- 7. Segmentation In Sweden Target males and females in 25-35 range - Lululemon targets a sophisticated and educated woman who wants a healthy lifestyle - Males are more likely to shop at a specialty store - Males work out more often than females in Sweden - Women need more encouragement to work out and Lululemon could be their encouragement -MANY people are members of health and fitness clubs -More affluent -There are a lot of yoga retreats in Sweden .
- 8. Legal Benefits of Moving to Sweden ● Very little bureaucracy ● Low corporate taxes ● Easy to do business ○ few challenges in enforcing contracts ○ few challenges in buying and opening new store fronts
- 9. Risks in Moving to Sweden ● Rated as having very low political, financial system, and economic risk ● Sweden is slightly vulnerable due to European economic recovery ○ economic slowdown
- 10. Competitors A global brand via strong online presence Most notable Swedish brand Developing a womens’ yoga line An emerging subsidiary of GAP
- 11. Competitor Pricing - Pricing strategy varies only a little between each competitor - Zobha and Salming Sports tend to offer premium products at similar prices (ex. $80-$90 for leggings) - Nike offers a wide range of prices - Athleta undercuts Lululemon just a tiny bit (ex. $75-$80 for leggings)
- 12. Challenges: Competitors - Lululemon lacks the brand familiarity that Nike has to acquire customers - Is not native to Sweden like Salming - Potential to be undercut by lines like Athleta - Less financial resources than Athleta or Nike
- 13. Challenges: Legal ● Higher social and environmental taxes ● Collective bargaining issues ● Must borrow from private lenders (no public lending)
- 14. Entrance Into Sweden ● Open a showroom in Library Town (Bibliotekstan) ○ 2.2 million people in the metropolitan area ● Sponsor events such as Nordic Walking, Jympa, and Yoga classes in Stockholm ● Promote products for fabrics, not for style ○ Specific fabrics luon, luxtreme, coolmax, silverescent, TENCEL ● Put in retail stores in 2 years
- 15. Pricing -Lululemon stocks only a few products at high prices -3,6, or 12 week product life cycles -95% of gear is sold at full price -Never put staple items on sale - In Sweden, luxury good sales are expected in to increase, especially in affordable luxury - Sweden's average household net-adjusted disposable income was calculated at $26,242 a year