Lululemon is making its most ambitious foray into experiential retail with a new 20,000-square-foot Chicago store that has everything from fitness studios to a lounge and a restaurant. The idea is people will come for the meditation session, leave with some apparel — and the sense that Lululemon is about a lifestyle, not just stretchy pants.
“We really considered ourselves an experiential brand before experiential was a thing. In the last two years, our Queen Street [Toronto] and Flatiron [New York City] locations taught us a lot about the direction we wanted to go in, and Lincoln Park represents that bolder direction,” said Celeste Burgoyne, evp of Americas and global guest innovation. “We are focused on the whole human, so that comes to life in our sweat series, in mindfulness through meditation and in community opportunities that keep our guest engaged.”
Though Burgoyne said Lululemon is in a “test-and-learn” phase with its Chicago location and has no immediate plans to open another store of its kind, she did say that experiential stores could come to represent 10% of Lululemon’s 455 stores.
“Flagship stores are often a good idea if they are in well-located, high-foot-trafficked areas because it is great for customer acquisition, engagement and retention, but they are expensive. It is a huge build-out, and they typically have long leases. But Lululemon is doing well now, and they have high sales per square foot,” said Sucharita Kodali, Forrester retail analyst. “The single biggest driver of more growth for a brand is square footage, and this new store represents that square footage. The classes and restaurant may not be as productive as the sales floor, but that is partly why it is experimental.”
In its most recent quarterly results, Lululemon saw net revenue increase by 20% year over year to over $782 million. Growth came from wins in its men’s division expansion and early success of its pilot, $128 membership program, which began in October 2018 in Edmonton and is also now present in Austin and Denver. The loyalty program will not be immediately available at Lincoln Park.
Lululemon will have incremental sales opportunities via its Fuel Space restaurant with $3 cookies and $13 cheeseburgers; exercise classes run $25 each; and guests can choose from Lululemon’s Selfcare line of dry shampoo, moisturizer, lip balm and deodorant.
“Lululemon is a brand that advocates for wellness, and this store allows them to showcase all of their products in action and in real life,” said Neil Saunders, managing director and retail analyst at GlobalData Retail.
The Lululemon restaurant is the brand’s first foray into food.
“[The restaurant] represents the lifestyle of a person who loves and shops at Lululemon,” said Carter Jensen, Latitude retail innovation and product development lead. “Food is at the core of wellness, and they are giving customers more touch points to think about their brand.”