Want your bar or restaurant to live up to its true potential? You could do a lot worse than to take a page out of the marketing book of Lululemon Athletica, which has managed to grow its brand into an impressive $10 billion empire.
Sure, the Vancouver-based company isn’t in the hospitality business, but I believe there is much bar and restaurant owners can learn from their aggressive marketing strategy.
The women’s athletic clothing company went from selling for $2 a share to a whopping $76 a share in the span of only 12 months. Today, they enjoy a quarterly profit of $74 million!
Here’s how they managed to do it, and I’ve included some great takeaways for bar and restaurant owners who want to expand their brands to reach the same stellar heights.
Scarcity: Walk into any store selling Lululemon clothing and you won’t find racks and racks of their offerings. That’s because they purposefully keep a LIMITED supply of stock on hand. This creates fervent buyers who find themselves clamoring to discover when supplies will be restocked. How does a bar or restaurant practice scarcity? By offering food and drink items that can’t be found anywhere else. Customers must know that they can only get what you offer by walking through your doors. This means pairing exceptional food items with signature drinks that elicit a reaction out of every customer who sits down and orders.
Perceived Value: You’re not likely to find any Lululemon clothing items on sale. While people know they can always go to the GAP to find yoga pants for $25, Lululemon’s clothing is regularly found at price points ranging from $75-$128 due to the quality of their clothing. No wonder their stock has shot through the roof! Bar and restaurant owners take note: You won’t increase the perceived value of your brand by constantly knocking down prices. If you believe you’re offering significant value, price accordingly. Customers will be glad to pay more for quality ingredients and tasty drinks. This is why a cocktail menu is important for any bar or restaurant. Don’t sell yourself short and your brand will grow.
The Apple Model: How can Lululemon get away with charging so much for yoga pants? Because they follow Apple’s lead. The tech-giant is known for unveiling iPhone sequels that offer unique features and upgraded parts, and customers are happy to pay more for each new release. Lululemon’s clothing is not only aesthetically pleasing, functional and priced for profit – just like the iPhone – but the company strives to consistently improve with upgraded fabrics. The result? Their customers don’t flinch when it comes to paying $100+ to add new items to their ever-expanding gym-wear wardrobe. The takeaway? Don’t coast and never settle for mediocrity. Always look for ways to improve your food and drink offerings, or other aspects of your bar or restaurant environment. You should always be looking for ways to elicit that reaction that gets customers to stand up and take notice at every point of contact with your business. It’s consistent growth like this that will always keep you in the black, just like Apple and Lululemon.
They Know Their Market: Lululemon knows precisely who they’re marketing to. Lululemon Athletica’s tagline is “Yoga clothes & running gear for sweaty workouts” and the women who buy their clothing know exactly what they’re getting. The brand has succeeded in becoming the Nike for women, providing workout gear its customers can feel stylish wearing whether they’re in the downward dog position or going out for dinner after a grueling yoga session. Bars and restaurants should always study their demographics and continuously research new trends. From your establishment’s name to the food and drinks you offer – and even the names of those drinks – all of it should speak to your audience. This will not only get the intended reaction from your customers, but they’ll be glad to tell everyone they know about your business – which brings us to the next point…
A Strong Marketing Presence: Because Lululemon speaks so well to its target market, it regularly has avid fitness bloggers and fans willing to spread the word on the internet via social media. Lululemon has a strong social media fan base and an online community of brand ambassadors, which creates BRAND LOYALTY. Bars and restaurants must use all the marketing avenues at their disposal to convey their brand message, and encourage customers to become extensions of their marketing arm. Take pictures of your food and drink offerings and post them on Facebook and Instagram and encourage customers to do the same This will help to build a rabid fanbase that can’t wait to see what you’re going to offer next.
The lesson here is clear. Quality products, high price points that don’t buck under pressure and passionate consumers who are loyal and love spreading the word have elevated Lululemon to become a formidable force in the athletic wear department. Use these takeaways from Lululemon’s marketing strategy and you, too, could build your hospitality business into a multi-billion dollar empire.