Lululemon made one change that sent sales soaring
Lululemon had an impressive 2015.
The company announced that total comparable sales (including direct to consumer sales) skyrocketed 10% in fiscal 2015, which ended on January 31, 2016.
But one major change that the company made resulted in a boost to business.
The company revealed on a fourth quarter earnings call that the revamped pants wall boosted sales 19% from September to January.
Back in September, the company changed the way it sold pants. The company began to organize them by fit (or "sensation") instead of silhouette — so its customers would be less confused about which attire to purchase for different activities.
"What it gives to our guest is ultimately choice and the ability to choose a way that they want to feel in a given activity," Antonia Iamartino, Lululemon's design director of future concepts, told Business Insider last summer.
Prior to this makeover, Lululemon used to simply organize its pant wall by silhouette, going from tightest to loosest. The company will now explain the selling points of each garment for different activities.
The company's pants usually cost about $98, significantly more expensive than similar athleisure brands like Athleta and Under Armour. With mounting competition, Lululemon has to make a case for why customers should shell out for its attire.
Iamartino said customers were often confused about how their pants should fit and would buy sizes that were too big. The new merchandising strategy was an attempt to make customers more satisfied with their decisions after they leave the store and start wearing the pants.
Lululemon calls the new categories "hugged, naked, relaxed, tight, and held in."
Here's the brand's explanation for each of the fits that debuted last September:
Hugged: Form-fitting but not skintight. One of Lululemon's classic pants. Good for exercises like barre.
Naked: Designed to fit very tightly. Ideal for yoga.
Relaxed: Loose-fitting and comfortable. Works for both inside and outside the gym.
Tight: Hugs skin tight. Ideal for running and providing additional support.
Held-in: Slimming. Sucks in the stomach, hips, butt, and thighs.
Lululemon is known for establishing the concept of athleisure, in which people wear athletic clothing as casual wear. But it faces rising competition.
Under Armour has been an obvious competitor for sometime with its female-friendly ad campaigns starring Misty Copeland. More pressingly, Under Armour's CEO Kevin Plank said it planned to grow its women's business. Dick's Sporting Goods launched a label to compete with Lululemon. Levi's has even tried to compete by selling more "comfortable" jeans.
Strategies like clearly explaining the performance qualities of its pants has apparently helped Lululemon stay on top of the competition.
Further, the company has plans to launch a revamped "top wall" this year, in hopes that it will invigorate top sales in a similar fashion.
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