November 25, 2011 by Roseanne
Since the blogosphere and mainstream news picked up on lululemon’s adoration of Ayn Rand’s ideology last week, there has been a lot of curiousity about the underlying philosophy of the ubiquitous “yoga-inspired” clothing company. Interestingly enough, this PR scandal landed just week’s before lululemon CEO Christine Day was named CEO of the year by the Globe and Mail’s Report on Business magazine. A profile of Christine reveals some insight into the company culture and how they craft their success.
The profile starts off with some scene setting:
…On a sunny Saturday afternoon in Vancouver, you could pop into any store—the flagship Kitsilano location, for example—and, by doing nothing more than people-watching, easily get a sense of what underscores its success.
What’s notable here is that it’s not just shopping that you’re hearing. It’s community building. And if you have any doubt that Lululemon is deliberate in encouraging this sensibility, you need only read the slogans that adorn their shopping bags, advertisements and websites…
Then it launches into lululemon’s business strategy and how it mystifies investors and stock market watchdogs. Clearly, this CEO of the year accolade is well deserved ~ with Christine Day at the helm, lululemon has made some impressive growth. “…It is her performance as CEO that has mesmerized analysts and the markets,” writes Timothy Taylor. “With 122 stores in Canada and the United States, and 100 more now under consideration, this is a company well on its way to mass popularity. Lululemon saw its stock climb to almost $60 this fall, up over 280% from when Day joined the company, and a whopping 250% gain year over year.”
Christine directly quotes the company’s recent marketing tactics, saying that she considers Lululemon to be “part of, and contributing to, a bigger macro-trend that affects consumers from their early teens to their 70s. Investing in your health will pay big dividends for individuals and society… elevating the world from mediocrity to greatness.”
It’s clear that the Ayn Rand and Atlas Shrugged references were not placed on the company’s bags for the sake of controversy, but are deeply embedded in the company’s culture: “Day makes no bones about acknowledging the inspiration of the book and the life of its author. ‘I believe in a culture of personal accountability and not compromising your values,” Day tells me [article author, Timothy Taylor]. “Atlas Shrugged is both about not accepting mediocrity and being personally accountable for the life you are creating.’”
The article also unveils some of the manipulative psychology behind their business practices:
“This would be yet another contradiction that Lululemon artfully manages to maintain: in this case, a company seemingly devoted to its “guests” that nevertheless refuses to give them exactly what they want… Über-Lululemon fan and dedicated brand blogger Christina Chalmers… knows that active discouragement is a key part of Lululemon’s very savvy plan. It even has a name. “It’s called the ‘scarcity model,’” says Chalmers. “And it’s about frustrating the customer.”
Interesting. This kind of positioning points to the fact that the “community” built around the brand is rather viewed as a target market, which needs to be tricked and chided to remain faithful and engaged. Perhaps free in-store yoga classes and local ambassadors aren’t enough.
In a recent blog post in response to the lululemon/John Galt scandal, blogger “isthmus nekoi” at The Oculus Divinorum made some interesting observations about the difference between the branding and the company. She said, “I want to stop discussion getting trapped at the level of the brand and start talking about the companies themselves.” And then she went on to provide a simple strategy for doing so, along with where to find the information. This Report on Business profile is a fascinating – and kind of frightening – insight into the lululemon corporate culture, and the tactics that have taken them to the top.
Read the article for yourself: CEO of the Year: Christine Day of Lululemon, The Globe and Mail