Lululemon (LULU), a high-end yoga and fitness apparel company geared towards women, is widely successful and is pulling in high profits from a dedicated following of yoga enthusiasts. But, investors are wondering how long they can expect Lululemon’s success to last. One equity research analyst turned to SurveyMonkey Audience to create a survey project to better understand why customers choose Lululemon today, and what may dissuade them from purchasing Lululemon in the future. He used SurveyMonkey Audience to create a high-quality survey. He then targeted the survey to women who exercise at least once a week and found the insights he needed.
What is the “stickiness” factor of Lululemon, and why do its shoppers keep coming back despite the high prices? More than 90% of customers said quality was one of the most important characteristics that influenced their decision to shop at the store.
Lululemon is currently one of the few fitness apparel store that focuses mainly on yoga gear. That makes it an incredibly strong player in the retail space, but also susceptible to decreased growth rates once competition comes to market. The analyst wanted to see what would happen if other brands started offering high-end yoga apparel for less and how likely would Lululemon shoppers be to switch preferences. If another yoga clothing store with comparable prices came to market, only 48% said they would be very to extremely likely to try it out. But, that number jumped to 75% if the high-end yoga apparel brand came to market with cheaper prices.
Lululemon shoppers love the store and brand for its product quality. This was expected and confirmed. But, customers are not totally brand-loyal and could switch to competitors if other high-quality yoga products came to market at more affordable prices. While competition may not be a major obstacle for Lululemon today, investors should keep an eye on the future of their Lululemon holdings if serious competitive threats emerge.