This was a really interesting webcast to listen to today but I really wish they wouldn’t do these webcasts on Upload Thursday when we’re all occupied. Is that by design?
Some things I found interesting is that lululemon has already started the soft launch portion of the website relaunch with the ‘loot’ section taken down and some behind the scenes work. Lulu has some quintessentially lulu plans for what to do with old inventory (spring 2011) in order to make it fun for us guests but more so to facilitate the process of moving inventory over to the new distribution chanels. They want to make it easier and cheaper for themselves so they don’t have to tag and ship old stock to the new distribution centre. When the new website launches on April 15, 2011 it will be the start of the new summer product line with much more realistic inventory levels. I think the inventory will be just enough that they don’t miss out on potential sales but still keep the consumer (that’s us!!) still a tad hungry for more with ‘scarcity model’. I wonder if the plans for old inventory is a warehouse sale..or maybe an online warehouse sale. I will certainly be paying more attention to the Factory Outlet over the next month (*sigh* and ebay of course). There will also be customer support offered during the relaunch of the new site which will be nice. Lest we miss out on our cherished Upload Thursday purchases. Right now the ecomm site is managed off site so this is something that will change as well. it’s being brought in house where they will have more control over moving inventory across channels to meet demands. We will also see country specific catalogs and one page checkouts (I love this). Things I hope don’t change are free shipping and the paypal option.
Lulu didn’t want to divulge too much about plans for future ‘digital strategies for online guests’ but it sounds like mobile apps are in our future. This excites me because I may be getting an iphone for my birthday coming up and I’m a bit of a gadget junkie. Can you imagine online shopping made easier with smartphones? I hope that’s what they have in mind. Blogger love?? Lulu?
This past year Lulu has had problems keeping appropriate levels of inventory as noted in this Globe and Mail article. This meant far fewer markdowns for us since there was fewer inventory left over at the end of season to markdown. This is a good problem for a consumer to have initially but not something they want to maintain over a period of time. This is something they plan on addressing after the relaunch happens with the new summer line. Christine Day even joked that she is ready to sell her personal closet, and John Currie, the CFO mentioned that towards the end of the year they were struggling with an inventory shortage and ‘selling fumes’ so to speak. We consumers noticed this in a lack of core products such as Cool Racerback tanks and noticeably thinner product displays in stores. They had mostly issues with newer product designs as those are harder to predict as far as sales but not a problem keeping items such as Groove and Astro pants which are not only core products but generally pants sell out less quickly anyways. There was an interesting question posed about manufacturing cost and fuel cost increases and it was mentioned that cotton/nylon are textiles that have seen increases. Also, Lulu is rushing to get products to the stores and enduring increased costs for air freight rather then by ship which is cheaper. The increases in Cotton/Nylon textiles answers my suspicions as to why polyester heavy fabrics such as static luon and polyester heavy cool racerback tanks are being used as often as they are. Will we see an end to that anytime soon? God I hope so. They also had a bit of lag with shipments from Asia during Chinese New Year so that may explain why we didn’t see many Cool Racerback Tanks in store and then an influx of old colors not part of the current palette. Luon was not as much a problem for manufacturing as they have now two factories that deal with luon, but other fabrics such as Silverscent Swiftly and other more technical fabrics were affected.
Another question that was asked was if we would be seeing price increase. Christine’s answer was kind of vague in that she said core products would remain the same as usual (but haven’t we already seen price increases in Defines, Strides etc.?) for fear of alienating consumers into heading over to the competition (and there are plenty) and the items that will have a different price point would be of course special edition scuba hoodies and items that have more intricate designs (things like SE Wunder Unders, Pure Focus Jacket). I think perhaps we will see a lot more ‘specialty’ core items with added trim and detailing which is how the price increases will happen, and perhaps fewer plain ol’ core items. This is less obvious to us as consumers since we don’t have a reference point for these items. Sneaky ninjas! ‘In the Know’ loyal customers will be rewarded using online only items, specialty online retro items (Deep V Tanks for example) and some other ‘fun online plans’ they have in store. No plans of a rewards card or any direct customer loyalty program. Why bring in a customer loyalty program when they already have really great loyalty?
A noteworthy mention for the lovely educators that help us out in store (thank you Coquitlam Lulu!) is that they plan on really investing in retaining loyal employees with wage increases and incentives. Yay!!
Have any of you listened to the Webcast on the investor site? What did you take from it?