Storm Clouds Over Lululemon?
On Cloud has been an absolute phenomenon in Asia and are poised to sap away a lot of interest from Lululemon.
They’ve brought together the right ingredients:
- Distinct, innovative product
- Quality and detail that resonate with Asian consumers
- Strong “cool factor”
- Smart retail positioning
Location, Location, Location?
One of moves On Cloud made in jumpstarting its business in Asia was to locate retail shops next to Lululemon.
By opening shops right next to Lululemon in the past, they were able to capture consideration within the right audiences and springboard ahead based on products that are generally a bit cooler (newer/fresher) than Lululemon.
They are now moving beyond this strategy as they have established a clear level of awareness and distinction. On Cloud is everywhere now, and often positioned in anchor positions of top-end malls across the region. They are quickly moving into prime position.
On Cloud has the initiative and has a clear edge in ‘cool factor.’ Retail markets across Asia are fickle and being fresh, cool counts for a lot.
Newness drives consideration.
Lululemon now benefiting from On Cloud?
It might now be Lululemon aiming to draw benefits from side-by-side shops next to On Cloud - trying to gain a step with its running category.
I recently walked by neighboring Lululemon/On Cloud shops, to find them going head-to-head promoting running shoes and gear.
In this comparison, On Cloud is a clear leader vs Lululemon, so could turn out to be a very damaging message for Lululemon ...and help On Cloud move ahead further.
As Lululemon has move into shoes, running (among other things) AND On Cloud extends its brand into new areas ...these two brands are likely to find themselves going head-to-head more often, even if, in the future, their retail locations are no longer side-by-side.