Lululemon’s Reported Slowdown: What the Data Tells Us

In recent years, Lululemon has been a dominant player in the athleisure market, known for its premium activewear and loyal customer base. However, recent reports indicate that the brand’s growth in the USA is slowing.

This slowdown comes as competitors like Alo Yoga gain traction, attracting consumers with a more lifestyle-focused approach and the rise of cheaper ‘dupes’ flooding the market. While Lululemon remains a strong player, the rising competition highlights an evolving market where brand loyalty is being tested more than ever.

Lululemon’s strong position in US Athleisure faces growing pressure

Lululemon has established a dominant position in the US direct-to-consumer (DTC) Athleisure market, holding a 15.6% share of visits year-to-date as of the end of August 2024. This places them ahead of Adidas and second only to Nike, which commands a sizable 38.9%.

However, Lululemon’s share was more dominant earlier in the year and has since declined, dropping to 14.5% in the last three months, behind Adidas at 16%. This loss of market share isn’t just coming from established rivals like Adidas but also from smaller, fast-growing competitors like Alo Yoga, Vuori and UK-based brand Gymshark.

While Lululemon still enjoys a significant following in the US, these shifts suggest that brand loyalty may be wavering as consumers explore emerging alternatives from the more casualwear focused brands like Vuori to the more affordable ones like Gymshark.

Traffic Share of Athleisure Category – 18 selected top Athleisure retailers

US, Desktop & Mobile Web, Jan – Aug 2024

Growth appears to be slowing down

Lululemon’s website visit growth in the US has slowed from 31% in 2023 to 18% in 2024, suggesting several key issues they could be experiencing:

Total Visits to lululemon.com & YoY growth

US, Desktop & Mobile Web, Jan – Aug 2022, 2023, 2024

This slowdown suggests several issues Lululemon could be experiencing:

As mentioned, the Athleisure space has become more crowded with the rise of competitors like Vuori, Alo Yoga, and Gymshark. These brands are gaining traction, offering compelling alternatives that cater to different segments of the market, drawing traffic away from Lululemon.

After years of rapid growth, Lululemon’s core market may have reached a level of saturation. Many consumers who align with the brand’s premium positioning will already own Lululemon products – and with quality a factor that Lululemon prides themselves on – it may be that consumers are not needing to replace products, resulting in fewer repeat visits and purchases.

As trends evolve, consumer interest diversifies. As such, shoppers are increasingly seeking out new brands that offer niche benefits – such as Alo Yoga’s holistic lifestyle approach. This diversification appears to be pulling potential customers away from Lululemon’s site.

Despite its strong following, some consumers may be experiencing “brand fatigue,” as Lululemon’s aesthetic has become so ubiquitous that it no longer feels unique. With newer, fresher brands making waves, consumers may be more inclined to explore alternatives, impacting website traffic.

Why is this happening?

Potential inefficiencies in marketing tactics

While Lululemon attracts substantial traffic through paid search across both desktop and mobile platforms, there appears to be room for optimization in their marketing strategy. One area of concern is their relatively high cost per visit. Among their closest competitors, Lululemon has the highest dollar cost per visit behind Alo Yoga, indicating that they are paying more to drive traffic than their rivals. In comparison, Gymshark manages to spend over one dollar less per visit while still achieving strong engagement, suggesting a more efficient allocation of marketing spend.

This disparity highlights a potential inefficiency in Lululemon’s paid search efforts. While their brand recognition allows them to drive large volumes of traffic, the high cost suggests they may not be targeting the right audience segments as effectively as their competitors, or they could benefit from refining their keyword strategy to improve relevance and reduce bid costs.

Additionally, diversifying their acquisition channels – by focusing more on organic search, social media, or influencer partnerships – could reduce reliance on paid search and lower their overall marketing costs, allowing them to invest in other areas, improve ROI, and fight back against competitors.

Total Paid Search Traffic and Cost Per Visit

US, Desktop & Mobile Web, Jan – Aug 2024

Economic pressure leading to price-sensitivity

It’s not just competitors like Alo Yoga and Gymshark that are challenging Lululemon’s market share; the rise of cheaper alternatives on platforms like Amazon is intensifying the competition. Inflation and economic uncertainty could also be tempering growth. Lululemon’s premium price point may deter budget-conscious consumers who are now gravitating towards more affordable options. From January to August 2024, the Yoga category on Amazon in the US has seen a significant uptick, with unit sales and revenue growing by more than 25%. A major driver of this growth is the Yoga Leggings subcategory, which has experienced an impressive 30% increase in both sales volume and revenue.

What’s particularly notable is the price point of these leading brands. A deep dive into the top 10 brands in the Yoga Leggings category on Amazon reveals that their average selling price is $30 or less – significantly more affordable than Lululemon’s leggings, which are priced at around $100. This price disparity is drawing budget-conscious consumers away from premium options like Lululemon, particularly as the quality of budget-friendly alternatives continues to improve. These Amazon-based brands are capitalizing on the growing demand for affordable activewear, leveraging the platform’s convenience, aggressive pricing, and vast reach.

Additionally, many of these brands benefit from Amazon’s fast shipping, easy returns, and user reviews, which have made it easier for shoppers to trust lower-priced items. For consumers who prioritize function over brand loyalty or fashion trends, this is a compelling value proposition. Lululemon, with its premium pricing, faces the challenge of defending its market position in the face of these lower-cost competitors who are rapidly gaining ground through convenience and affordability.

In light of this trend, Lululemon will need to adapt its strategy to compete not only with upscale DTC brands but also with budget-friendly alternatives that are becoming increasingly popular on major ecommerce platforms like Amazon. Whether by reinforcing the premium value of its products or exploring new pricing and distribution strategies, Lululemon must address this rising threat from below.

Amazon Unit Sales YoY – Sports & Outdoors > Sports & Fitness > Exercise & Fitness

US, Web & App, Jan – Aug 2024

Top 10 Selling brands in the Women’s Yoga Leggings category on Amazon

US, Web & App, Jan – Aug 2024

Missing the mark on today’s consumer needs

Alo Yoga has experienced a remarkable 47% growth in converted visits, far outpacing Lululemon’s modest 3% growth in the same period. This dramatic difference underscores Alo’s success in not only attracting web traffic but also turning that traffic into actual sales at a significantly higher rate – suggesting that they are meeting consumer needs in a way that Lululemon perhaps are not.

Change in Converted Visits

US, Desktop & Mobile Web, YoY Jan – Aug 2023, 2024

Several factors contribute to this conversion spike, some of which were covered in our recent Trending Brands report:

Alo’s effective use of influencer marketing, athlete sponsorships and social media partnerships has driven highly engaged traffic to their site. These targeted campaigns, often featuring influencers showcasing Alo products in relatable and aspirational ways, create a direct line from inspiration to purchase, fueling conversion growth.

Alo’s emphasis on trend-driven, fashion-forward activewear that doubles as streetwear attracts style-conscious consumers who are more likely to buy immediately. This versatility makes the brand appealing to shoppers looking for pieces that fit both workout and everyday wear needs.

Alo’s positioning as a wellness and lifestyle brand, not just an activewear company, has cultivated a loyal customer base that resonates with their broader content around yoga, mindfulness, and wellness. This alignment with customers’ values and lifestyle has strengthened their ability to convert visits into sales.

Evidence of this can be seen in the keywords that Alo are winning traffic on against Lululemon: with terms covering gym wear, yoga gear or very specific product searches indicating a consumer who is aware of the exact item they are looking for and visiting Alo to purchase these products.

Top 10 Non-Branded Keywords – Share of clicks aloyoga.com vs lululemon.com

US, Desktop & Mobile Web, August 2024

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