Lululemon’s competition— Alo Yoga and Vuori —is getting bigger, but the Canadian active lifestyle brand still retains its leading position in the athleisure market .
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That was the conclusion based on four in-person professionally-managed focus group surveys that TD Cowan conducted this past June in New York over two days, with the help of Gundell Focus Groups.
One key finding is that Lululemon still has a loyal fan base for its bottoms. However, the core bottoms category may have peaked, since that category does not appear to be attracting new customers. Lululemon does have growth potential in other categories, such as workwear and men’s wear. All groups also noted Lululemon’s decreasing quality , particularly with its leggings. Still, the Canadian brand retains a competitive advantage due to customer loyalty. Among the criticisms for the brand is that some products can be too basic, and that it speaks to moms and teens, but not so much to Gen Z.
In comparison, Alo Yoga and Vuori have scaled up and each has grown its respective customer base. The two brands attract customers who are “influenced by current fashion trends and social media or seek comfort and versatility” unavailable in Lululemon products in the same manner, noted TD’s Focus Group summary. And while both brands are viewed as having “tremendous momentum and upside potential,” the reliance on influencers runs the risk of being too trendy. That means diversification of product line and expansion of customer base are requirements to prevent the risk of becoming a “fad.”
Alo Yoga customers are primarily in their 20s, whose priorities are fashion, style and current trends. They follow the brand’s influencers—Kendall Jenner, Gigi Hadid, and Hailey Bieber among them—and want to copy their lifestyle. Some respondents said the brand’s stores are clean and modern, and a few seemed impressed by the rooftop gyms at some locations. And at least one said the brand created a community that celebrated diversity, inclusivity and empowerment.
In comparison, Vuori attracts customers who want athleisure to transition from workout to everyday wear. The brand emphasizes sustainability and materials, which the TD report said “is a compelling quality story.” The respondents loved the soft fabrics, with the men favoring the options for collared shirts, polos, and shorts. Among the men in the group, they cited the quality and durability as better than Lululemon, and said they liked the brand’s healthy, active, California vibe. Among the criticisms were that the brand seemed to target an older customer, lacked color options, and that it needed to do more work on their tops, including adding support to its sports bras.
While Lululemon is considered a mainstay, that wasn’t the case for either of the upstarts. And while brands such as Alo and Vuori could eventually diminish in popularity, it wasn’t clear where their customers would go other than that they don’t see Lululemon as their primary athleisure brand.
The three brands, including Gap’s Athleta, which it acquired in 2008, were deemed the middle ground that bridged performance with fashion. Across the athleisure spectrum , brands such as Under Armour, Adidas and Nike were considered to be on the performance side, with Skims, Aritzia, and Aviator Nation the opposite, with fashion seen as the primary focus.
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Across the board, quality was a top priority among the respondents, which drove purchase interest and loyalty. They also viewed athleisure as an investment, believing that price correlated to higher-quality and more durable pieces. Key pieces include leggings, sports bras, shorts and joggers, but not so much winter jackets and outerwear.
The respondents also said they wanted a style that made them feel more confident—regardless of activity. Others said they want multi-purpose pieces that are both performance-oriented and fashionable, items suitable for a workout, and then for running an errand or grabbing a drink afterwards. Performance criteria for fabrications include four top wants: flexible, breathable, comfortable, and sweat-wicking.
The survey focused on Lululemon, and the two fastest-growing privately-owned athleisure brands Alo Yoga and Vuori. Participants in the focus groups were men and women between ages 18 to 40 who purchased a minimum of two of the three brands in the past year. Annual household income was at least $75,000, with a number of households registering more than $150,000. All participants were college educated, and there was a mix of life stage, marital status and ethnicity. They spent at least $750 in the past year on athleisure, with most spending more than $1,000, via a mix of in-store and online shopping.
Because the survey was exploratory in nature, it should be considered qualitative research—no effort was made to select the sample by statistical methods nor were respondents interviewed in a manner that allowed for quantitative analysis—and be regarded as directional and not definitive.
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