lululemon's Ecommerce

Today I’m going to focus on my favourite brand and company: lululemon. As I wrote about before, omni-channel sales strategies are becoming ever so important for retailers. For lululemon and its other athletic wear competitors like Nike and Under Armour, it’s definitely no different. In the difficult year of 2014, lululemon’s ecommerce was able to drive the company’s sales in the Q4, contributing 18% to the company’s top line and approximately 26% to its income (Forbes 2015) 

lululemon began selling on its ecommerce website in 2009 and has seen increasing growth over recent years. What really drove ecommerce in 2014 was the launch of a mobile app that enabled customers to shop on their smartphones. Once again this underscores the importance that mobile is going to continue playing in aiding ecommerce and overall omni-channel experiences. At the end of Q1 of 2015, over one fifth of luluemon’s growth that quarter was attributed to the ecommerce platform, where revenues increased by 27% to $83.6 million.  

What’s interesting to note is the many factors that affect online sales. For lululemon, diligently managing its web inventory is key for responding to variations in online orders. As Marcos Garcia mentioned in his guest lecture, ecommerce demands show daily and yearly variations and in this case, the yearly variations definitely play an important role in determining lululemon’s ecommerce sales. They noticed that as temperatures were extra low in the February 2015, this kept many of the usual yogi customers indoor and thus created a hike in ecommerce sales during this winter period. What lululemon did well in response to this was ensure a shorter distance between distribution centers and the customer, to have products delivered in a timely manner despite adverse weather conditions. This brings up the significance of aligning ecommerce with an efficient supply chain management strategy. Aside from having an ecommerce website that is user-friendly and induces customers to add to their carts, what then becomes the determinant of whether or not ecommerce will drive sales is the strategy behind how you deliver the products. 

As CEO Laurent Potdevin forecasts even more accelerated growth in ecommerce for lululemon in upcoming quarters, it is exciting to see what other ecommerce innovations this company has in the works to drive this growth. Hopefully, I can soon one day be a part of the process of creating these innovations! 

The Success Factors Behind Sephora's Digital Evolution

After being prompted by the many emails, addressing me so personally and eloquently and flashing the most desirable new beauty products for this holiday season before me, I gave in. I walked into Sephora this past Friday for the V.I.B. 20% sale and spent an amount that my McGill Intro to Information Systems Grader salary only managed to cover about a quarter. Sephora has been known in recent years to really at the top of their e-commerce, omni-channel retailing and beauty technology game. And so I want to look more into that for today’s blog post. After all, if they successfully managed to make me buy $250 within 20 minutes, I must give them some props. 

Looking at an article from HBR about “How Sephora Reorganized to Become a More Digital Brand”, chief marketing and digital officer Julie Bornstein detailed the changes made to Sephora to help it evolve digitally. First of all, the importance of having a web development team in-house was highlighted. While the first Sephora.com was an outsourced product, Bornstein made the effort to build a team of digital and web talents, who then in turn constantly improved and optimized the web and mobile experiences of the Sephora website based largely on their own analytics. 

In addressing silos in digital, Bornstein emphasized how enmeshing digital at the highest management level is key. It makes sense given that this is something many companies are still struggling with today: legitimizing the need for digital. Once its importance is engrained in top management, it becomes easier to justify the necessary risks and experiments for digital success. With this embodiment of digital, Sephora has taken it one step further with consistent customer- centric thinking, centering brainstorming in the shoes of customers: how would I want to shop? This benefitted Sephora massively as when they first heard of the industry’s forecasts in mobile commerce, they immediately dove head first and were able to be among the first to develop a mobile site for beauty sales.  

Sephora’s innovation in digital goes beyond its web presence and has been extending in the store experience since 2012, with the introduction of Color IQ. This technology takes the guesswork out of finding the right foundation and concealer shade by taking images of a customer’s forehead, cheek and neck an calibrating the three photos into one colour composite in 2 minutes. The resulting Color IQ number can then be used to pull up the best matches of foundations, lip colours and concealers that match the customer’s skin tone. This Color IQ number can also be inputted on the Sephora website to retrieve online product results.  

It’s evident that Sephora’s digital success is highly reliant on having strong top management support and investment in digital, a risk-taking attitude and a design thinking approach to digital. These are definitely things that beauty and even other retailers alike should keep in mind when trying to devise their strategy for linking the online presence with the in-store experience. 

Chief Digital Officers Taking The Seat At The Table

I woke up this morning to a Facebook message from a good friend with a winky face to the article “Does Digital Finally Have a Seat at the Table?” from Business of Fashion. It’s extremely interesting to see how fashion and luxury goods companies that have previously been slow to adapt to the digital playing field have now been upping their game.  The Chief Executive of Prada once said that “It’s not that I am skeptical about digital, it’s just that I have many more important things to do”, with the focus of the business mainly placed on the luxury market’s growth in China. However, the slowing Chinese economy now places ecommerce and digital as one of the very few ways luxury companies can continue to grow. 

As opposed to digital being just a subset of marketing and ecommerce, fashion and luxury companies like LVMH who have designated a new role: Chief Digital Officer, show the new need and move to integrating digital into core business strategy as a department of its own. For someone like me who has been passionate about the potential of digital and analytics in fashion and beauty, it is beyond exciting to hear that many companies are finally recognizing the importance of digital to future growth. I find it intriguing that this article details two different types of CDOs, ambassadorial and transformative. Ambassadorial CDOs are those who are typically placed in a company to signal to shareholders that executives are serious about taking advantage of digital opportunities while transformative CDOs are those who have knowledge of both marketing and technology and an operational background. A transformative CDO sounds like my dream job articulated right before me. 

For these luxury fashion companies, it’s evident that inefficient data collection is a problem that permeates across the industry. Without having direct –to-consumer channels online, it’s difficult for many of these brands to collect data on their consumers’ online shopping behaviour and understand their evolution. For Westfield, addressing this problem meant hiring a chief data and analytics officer to integrate data with strategy and thinking and to create ways of better utilizing data to optimize customer and retailer experiences. 

It’s so amazing to see all these new opportunities opening up in the fashion industry for digital. I know the same is happening in the beauty industry and this gets me more excited to discover the career opportunities that lie ahead for me for being someone who studies both Information Technology and Marketing. 

"Social Media Is Not Real Life!"- The Fate of Influencer Marketing

If you haven't heard about Essena O'Neill's social media quitting story by now, chances are you have probably been hiding under a rock (but then again it is midterms season, so I don't blame you because I'm the same). But then again, Essena's story has literally spammed every possible Internet news and social media outlet in one way or another.

The TL;DR of the drama is that 19 year old Essena, who has been a famous social media influencer with over 600k followers on Instagram and other huge followings on YouTube, Snapchat and Tumblr decided to quit all her accounts and claimed "social media is not real life". She reveals how it takes 100 shots to get one perfect photo and that being obsessed with social media fame has consumed her. Although I do agree with what this girl has said and sympathize with the negative feelings she has felt with social media, I do have a slightly alternative view to the rather generalized and biased claims she has fired against social media. But for the purpose of this blog, I'll stick purely to the digital marketing/ ecommerce implications of its, particularly for influencer marketing.

Influencer marketing is an integral part of any fashion/ beauty brand's online marketing strategy nowadays. The truth is all consumers are aspirational beings and especially with the interconnectedness of Instagram, it has become easier than ever to pick out the people who inspire you and try to replicate their style or lifestyle habits. Although most people do recognize that many influencers are paid for their posts, Essena's story will undoubtedly create some authenticity skepticism for many consumers. If people begin to see influencers as fake and regard the content they post with distrust, this can create a a huge digital marketing dilemma.

So then, what exactly should fashion/ beauty brands do in response to this? As an Econsultancy blog post pointed out, there are no easy answers to this. However, they should definitely attempt to factor in more authenticity into their collaborations with influencers. Instead of just paying a myriad of different influencers to pose with fashion or beauty merchandise, it may be more worthwhile for brands to be more selective in the influencers they want to work with and focus on developing more long-term relationships as they would with traditional celebrities. As opposed to just sending a list of requirements for an influencer to follow when posting a photo with the product, having a degree of co-creation could definitely bring more truth in collaborations.

This Essena news headline may be a matter that fades from our timelines in a few days but it has inevitably struck a chord in many people in regards to their personal social media attitudes and behaviour, and the overall scheme of social media marketing as a part of digital marketing. I personally do agree that many things that I see on the social media accounts I follow may not necessarily be authentic. But at the same time, it is important to recognize that social media is not the source of evil. Companies and users alike have the choice of how they wish to represent themselves through social media and the fact that marketing is weaved in our everyday lives is not something that we can change.