Lululemon Athletica Inc. does not want you to think of its biggest ad campaign to date as advertising. Ask about the business rationale for launching their first ever TV ads and their first ever global campaign, and they will tell you that it is really about providing a new view of yoga "that would not only spark conversation but would actually allow people to live a life of purpose, and potentially deeper meaning."
That's how Duke Stump, executive vice-president of brand and community, explains the campaign that launches on Monday. To do that, the company is reaching for a flashy montage that might leave viewers wondering what it all has to do with yoga pants.
He sees it as a chance to "get clear with the world what we stand for," to celebrate the company's sense of purpose and to create an emotional connection with shoppers. It also comes at a time when Lululemon needs a sales turnaround.
After a strong holiday season, the Vancouver-based company warned in March that sales have fallen in the beginning of the year, and it expects to report its first same-store sales decline since 2009. The retailer has been working on improving its colour selection to better keep up with trends, offering new products and improving its e-commerce experience.
But it also faces larger challenges: The "athleisure" category in which Lululemon was a pioneer has grown to a $4-billion market in Canada alone last year, up 43 per cent over five years, according to research firm NPD Group. But competition has also ballooned, and now industry watchers are questioning whether that growth has peaked.
The ad campaign, which has been in the works for roughly a year, aims to restore some of Lululemon's lustre against this more challenging retail landscape, while also focusing on international markets, which are a strategic priority for the brand.
In addition to Toronto and Vancouver, ads will run most heavily in New York, L.A., London and Shanghai. Lululemon currently has seven stores in China and a total of 12 in Asia, which it sees as a growth market.
Lululemon partnered with Virtue, the advertising arm of Vice Media, to produce the ads, which will run on TV, on billboards and other out-of-home media, online and on social media. Vice has styled itself as something of a millennial-whisperer to advertisers, and in fact the main Lululemon spot looks very much like a promo Vice might run for its own TV network, with quick cuts of a rapper onstage, a surfer, young people in a fluorescent-lit club, a drummer honing her craft and other scenes. Text on the screen identifies these scenarios as "a practice" that brings principles of yoga into real life – breath, letting go, self-discipline, concentration and more.
Further videos that will run online profile some of those characters, such as Britain-based MC P Money, Australian artist CJ Hendry and Vancouverite Jian Pablico, whose teaches capoeira (a Brazilian martial art).
"We felt strongly that we could say something that in many ways is not about selling product, but is trying to share an emotional context around the brand," Mr. Stump said. "When we looked at what we've done externally, we've talked a lot about yoga on the mat and in-studio, but we actually felt there was an opportunity for us to take yoga off the mat, and to really show how people are already living the philosophy of yoga in their lives."
It's a very different strategy for Lululemon, which, for most of its 20 years, has advertised with its growing store presence, at a local level and through social media – but has eschewed traditional, large-scale ad campaigns.
Competition in the industry is fierce. Discount retailers such as Wal-Mart, Forever 21 and H&M are now producing fast-fashion athleisure wear that ships at the pace of trends and puts pressure on prices, as well as formidable giants such as Gap Inc.'s Athleta brand, Nike, Under Armour, Adidas and Reebok all breaking into the space.
It has also been fighting for shoppers online, with e-commerce player Fabletics and Athleta together grabbing 70 per cent of the online market for athleisure in the United States in 2016, according to research firm Jumpshot. Lululemon was in third place, with 22 per cent of the market.
Mr. Stump said the major ad investment was not about responding to these trends.
"This is less about competition for us and it's us actually having the courage to step boldly into what we believe to be true," Mr. Stump said.
Younger shoppers are a challenge. Growth in spending on activewear by millennial shoppers has slowed considerably in the past year.
"This slowing of spend is largely attributed to the athleisure consumer," NPD director of sports Matt Teeple said. Sales in the category among younger consumers grew 20 per cent in 2016, but have slowed to just 6-per-cent growth this year.
Lululemon has turned to Virtue partly to appeal to those younger consumers. The agency spent time in Vancouver while developing the campaign.
"We felt the vibes there, what the brand was all about," said Spencer Baim, chief strategic officer for Vice and founder of Virtue. "At the highest level what we try to do is to tap into something cultural, or a deep passion point with the audience. Often when you work with brands, that can be a force-fit. … In this case, what Lululemon stands for is actually a passion point and a cultural point, that people love. When you have that — and that is unique, it doesn't happen often — you just lean into it."
The company is pitching that connection to an increasingly fickle customer.
While Lululemon's first-quarter troubles could be temporary, "we see a larger issue brewing, specifically that the [Lululemon] customer was so quick to leave the brand and go elsewhere," a recent report from Canaccord Genuity stated. "This suggests to us that pricing, competition, and/or fashion alternatives were a strong enough force to drive the consumer away and thus will make it that much more difficult to recapture her."
Mr. Stump said the company remains "incredibly bullish" on 2017, and sees strength in its long-term strategy and new offerings in its pipeline, such as the recent launch of its Enlite bra.
"This is a long-term strategy that we believe we need to live into," he said. "If you look at consumers in today's world, it's not just about buying things that have a truly amazing function, but also a strong sense of meaning."