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The Art of the Brand
Lululemon’s Misstep: How a Media Twist Shaped (and Shook) an Iconic Brand
00:16:33
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- [00:00]
A
Lululemon was founded in calculated controversy.
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B
What a brand, what a brand, what.
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A
A brand, what a mighty good brand. Say it again now. What a brand, what a brand, what.
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B
A brand, what a mighty good brand.
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A
Like Chip Wilson really was really connecting to his target market, which was like it girls. And he, he calls these kind of IT girls as 25 to 35 year old professionals who are not married, who don't have kids, who are focused on their career and take care of themselves. And these are women who Atlas Shrugged like they're a little bit more educated. They want, they want a cheeky message that has different undertones. And that's why they did a lot of things that were that, that stood out, but created a cult and loyal following. And it's hilarious for where the brand went when it went public. But what's also interesting is that whole sound bite of like him saying that big women shouldn't be wearing Lululemon was completely misstated. Like completely misstated. The actual story is that he was doing an interview with like Forbes or Entrepreneur or the Rolling Stone or New York Times, like one of the big ones. And this is when they were having a decline on quality. So because basically the business went public and they had to bring in another kind of CEO who was making decisions and they lost sight of quality. The entire business structure changed. People were clocking out at 5pm they weren't as, they weren't as obsessed with the product and the customer because they started losing sight on product. This also happened with another interesting intersection where women were buying two to four sizes smaller in leggings. Cause they were trying to make leggings, shapewear garments instead of it being like for activewear. So because women were buying at a bigger body size, a tighter garment, the product started pilling. And they were getting a lot of bad press for pilling. Cause it was always known to be a really good product. Now they were having some QA concerns, but the product was pilling because it wasn't designed to be a shapewear product. And if you're a bigger person and really tight material that's stretching and then it's rubbing between your legs, you start to get pilling. And basically what he had said, I'm paraphrasing, but was like, basically women are wearing bigger, women are wearing product that isn't the right size for them, like two to four sizes smaller. And it's, and it's basically compromising the product. But he said it in a really like. And they completely twisted it.
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B
This is a perfect example just Before I get into it, look forward to the and Rand comments now that you threw that in there as people being educated, but this is like, a societal issue that I deal with on my other platforms, is how easy it is to be distracted by what's really being said, by something that's emotionally charged to get you on one side or the other. Because the way you just described that, I've never heard that before. And it makes perfect sense at so many levels. But how many humans who were on Twitter complaining about it and who got all upset never really got the whole story. They were just told, oh, he said, big women shouldn't wear Lululemon. And then they went on a tirade.
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A
Well, and then the other interesting element to it is that there was a lot of internal pressure with the acting CEO, Christine, because, I mean, for multiple reasons. One, you know, she was an appointed CEO versus the person who, like, through blood, sweat, and tears and decades of experience, built the company. She was less focused on quality. They were cutting corners. They were making so much money that, like, initiatives where he was focused on, like, he wanted to keep, like, owning moments. So they owned yoga. Before yoga blew up. He wanted to yog. Yog. He wanted to own meditation and mindfulness before it blew up. And he tried to put together an $800,000 budget. They were making billions at this point. And they quash it because they're like, it's too big of a risk. There's no data. And he's like, the moment there's data, it's too late. Like, I'm foreseeing a trend. Like, that's how I built Lululemon.
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B
It's a visionary versus an MBA team. Right?
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A
And they. Where I'm going with this is there was. There was friction inside the company, and there was multiple issues of, like, basically him battling with Christine. And this moment with the bad press is what the board is how she leveraged the board to be like, chip, you gotta step down. And it wasn't a bad PR moment because. Because optically they made him step down. It allowed. It allowed. Yes. It allowed the media to go further with the mistaken comment. And it even goes back to the why people say he called it Lululemon because he wanted to laugh at Chinese people mispronouncing the L so that it was Lululemon. Like, that was also completely mistaken because he had done business in Japan for so many years, and he had sold a skateboarding line called Homeless Boards. And Homeless did so well because they. Because this. The L sounding words sound hyper American. Because the Asian dialects don't have L. L is uniquely Western. So brands that had L sounds came across as more westernized and they were obsessed with western brands. So he spent months trying to figure out a hyper L sounding fitness brand because he had had so much experience in snowboarding and skateboarding and snowboarding had blown up in Japan. Like he had made a fortune in his last business by having business in Japan. And I just, we even heard this comment recently from the biggest name in branding. And it's just, it shows you though when you went to talk about like misguidedness and like lack of understanding and branding in media, how easy it is to, to bend things out of shape and to have people with the wrong intentions and political biases leverage you to be squeezed out. And it ruined the brand. Lululemon is nowhere where it was in, in mid 2000s.
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B
Well, for the first time ever, they're experiencing repeated quarterly losses.
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A
There's no brand.
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B
Yeah.
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A
And, and because they're just, they're trying to please everybody and like that works for like six months.
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B
So if you're a founder or a CEO and you're getting this pressure, like you know, you have to make sure you have the right people around you that are giving you advice or supporting you to take your vision where you want to go. And we just, we, we come in often too late where a founder has blown all of their money. Listening to MBA marketing people in agencies when their gut was right and they just didn't get the right advice. And you know that that's an amazing story by the way. Good job.
- [06:42]
A
I really enjoy it. Like that book wasn't a great book but like really great points for like navigating branding and like what to do. Right.
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B
If you are going to solve business problems, you have to be able to process, understand and question data in a way that makes the likelihood of your decisions success rate to be higher. And if you can't process data effectively, if you can't see through the bs, you're just going to make companies go bankrupt.
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A
And also though it's really interesting to add to that point is sometimes the best decisions don't result in the strongest data right away. And that's like a really, it's a really difficult point to understand because it manifests in different ways, but it's sometimes the right decisions take time. And when you're constantly looking for like boxes to check, like for an example, like for Lululemon to introduce. I'm trying to think of, you know, the only thing that comes to Mind is like larger models in the store windows, you know, like so. And this may not be it, but let's say, let's use that one because like, that one's an easy for people to think is a controversial statement. So right away you can get people who were probably already going to come in anyways and would continue to support the brand, provide positive feedback. Right? Because it's, it's an easy thing to celebrate. It's an easy.
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B
You'll get, you'll get articles on X or Twitter from like pro social.
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A
Yeah.
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B
You know, activists doing these things. Oh my God. Lululemon's changing the. Oh my God. You know what I mean? So you're getting this immediate feedback loop of, of positivity.
- [08:16]
A
But, but how that like fitness is aspirational, right? Like, it sucks to go out for a run every day. It sucks to, to go and do those like, hard workout classes. And it, the way that you, you go through that is by having aspirational figures. Not skinny figures, but aspirational figures. And when you go too far down that, that rabbit hole and you're getting form of gratification, you can't understand why your brand is declining. And it's decisions like these where Lululemon has lost sight of where it came from, how it started. Like the original yogis, like, they weren't supermodels, but they also weren't unhealthy larger individuals. Right. Like they were just healthy people. And healthy people come in all shapes and sizes, but that's all are welcome.
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B
But there are aspirational things that we look for. And I think this is an interesting point that we talked about another time from a business. Like, in business, it's not about political correctness in business, it's about business, what makes people click buy. Right. And understanding that humans are delusional about the. How they look like. There was one sample where they asked 10,000 people to rate themselves where they are on the IQ, right. It was like 78% put themselves in the top third. Right. In terms of intelligence, the same thing exists in appearance. Most people look in the mirror and go, wow, I'm looking amazing today. Most people think they look 20 pounds lighter or they want to be associated with that. So you have to, you want to create clubs or tribes that people are aspiring to be part of. Right. Not a lowest common denominator tribe necessarily. You can do that under a business model, but if you have an aspirational brand, you have to make it so that people feel like they're going somewhere that's better than them.
- [10:04]
A
Well, I have two arguments to make. I would say the first argument though is, is that. And it goes back to the conversation we had about Nyx, right? Like we had walked by the next store and the next store is focused on like, like full bodied women, like really all shapes and sizes, like, and especially for like bigger breasted women. And that really works for that brand because like when I look at it, it feels authentic to the brand. Where I have an issue with it is when I listen to the story of the person who built Lululemon. And when you understand the tipping point, the critical mass, the way that that brand grew into a cult brand to then come in and apply a different approach to the brand and its values is when it stops working. So the argument here isn't, is there space for larger women to have activewear clothes? Of course there is. But the question is, is it in line with the way that Lululemon is branding themselves? And when you're seeing decline over, decline over dec, it can't just be you're a bad person. Like, we at least have to have the discussion and conversation. And I would say I believe that Lululemon has doubled down on having larger models to almost indirectly apologize for that fake statement that came from Chip Wilson. And the kind of, the new management, the new kind of leadership is like this statement is hanging over us. But because the brand didn't own it for what the statement actually was, they allowed that that statement to manifest incorrectly. So they now feel like they're perpetually apologizing and need to show a different extreme of the brand that isn't where the brand came from and it's hurting.
- [11:47]
B
The brand could have been pretty cool to say, hey, look, in our move to go public, our product, you know what I mean, went down on quality control and people were using it for a reason we didn't. Once we understood that reason, we then changed the construction of certain products. Like if you wanted to address that goal, they could have made stronger lettings that were more form, you know, body contouring if they wanted to, or just made a more informed audience. But they ignored the reality. And that's what happens in this politically correct world. You actually ignore the reality that exists, ignore what customers really want, and then just focus on virtue signaling and it's downward spiral.
- [12:23]
A
But imagine if Lululemon had actually instead embraced their founder. They're like, our founder is a visionary. He is a leader in fitness wear. He was the first individual to pilot at a mass level female activewear. And show all of the women along the way that worked for the brand that weren't a size 0 or a size 2 and actually re brought out what the interview question answer was. Like. Imagine if Lululemon took that approach. Then you've completely uninsulted all of the larger women, women that felt personally attacked and victimized by an incorrect statement. You've also now opened up the dialogue so that people who are logical, critical thinkers, their original target market consumer is like, this guy's bang on the media does this all the time to people. I'm so aligned with what I'm gonna. I'm gonna support them more because he didn't say that. And then third, because people, People buy with their wallet. Like they vote with their wallets, right? Like they show you their support with their wallets. And then three, imagine if they had a segment with Chip Wilson, like, producer predicting where he thinks trends are going. Where they. Like his wife was a, was a massive proponent to the designs that completely changed activewear. Like, imagine if the brand embraced that like Four Seasons embraces Isadore Sharp or how Trader Joe's embraces their owner. Like, all of these owners had made missteps along the way. Like, that's a part of the journey, but it's. But when you allow the misconstrued media that gave a clickbait headline to a big brand because it's easy to attack and you want, you want the hero to fall and you allow that narrative to perpetuate and then you're trying to pretend, like, save a statement that didn't happen. You're.
- [14:03]
B
You're on fire. That was amazing. I just wish when I was loving Lululemon at the beginning, I, I admired how cool it was for female athletic wear. And then when I got my first Lululemon golf polo shirt, I, I think I might have said to you or somebody else years ago, I'm like, lululemon should embrace golf wear. Men spend four to five hours on the course. This is the most comfortable golf pants. And like, other than these cheap Adidas and like garbage polyester festivals, the ones with silver in it. And they could have really kind of found a way to bring something for that was unique to men in. And I didn't think they were really that focused on it, but I thought that was a moment they could have.
- [14:41]
A
Missed because going public kills your brand. Like, you just get so many. You get MBAs who aren't. Who aren't creatives first, who don't understand people first. They only care about profitability. And it sucks because, like, as consumers and within a capitalist society, the businesses that we respect the most are so money driven, that they're so fixated and focused on going public that we just, we don't have enough brands to choose from because it's so easy to go public. It is so attractive to go public. And every business needs money to grow. And nobody wants to grow over 40 years. They want to grow in two, they want to grow in three.
- [15:18]
B
Do you mind if I introduce a topic that I think is relevant? Like what, what the difference is between what we've been talking about and the. The individual that I had the pleasure of meeting last week, that Mr. Saturday Night brand.
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A
Mr. Saturday, Joey Gollish.
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B
Right. Like, and seeing his clothes and what he's doing, like, you know, that's something that I think can grow into a giant mega brand because they're doing things the right way. Do you have anything?
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A
Well, Mr. Saturday, Joey Gollish, a friend and the creative director of Roots, has his own clothing line. And it's super cool. It's super cool.
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B
Like, I quite loved it. And you had a cool moment with the skateboarding guy.
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A
But I mean, he's a cool guy. He's super talented, you know, but he's also not someone that's seeming to be pushing to get like brick and mortar stores and, you know, like be having million dollar quarters. Like, he's someone who's kind of a creative first and his fashion is accessible, it's cool, it's unique. But he's kind of growing at the right pace. But he's also quite young and has accomplished a massive feat which is becoming the creative director of Roots, which is pretty iconic. And he's turned around the Roots brand. So he's definitely a cool person to check out.