Thursday, December 15, 2016

Pricing Muscle Going Weak?

Repriced down $30 from the original price of $98


Price under the sticker is $98


A couple of repriced items. I hear people are getting $25 GCs in their emails, too. People who have Strava Premium are getting $30 GCs, too, though I don't know if that is a Strava or lululemon thing.

How's that muscular pricing working out?

"we have really – over the last I would say 12 months to 18 months built a new muscle within the Company, within our merchandising team around pricing. And it started with a very important project the BCG led for us and actually helped us step from that project away from not just understanding where our pricing architecture fits within the industry but also helping us build the internal processes so that we can have a more sophisticated approach to having price our goods." -- Stuart Haselden, from the Dec 2016 Q3 Earnings Call

24 comments:

Anonymous said...

Blooming Pixie WU Crops got uploaded to WMTM this morning. Sizes 2 - 10 currently available...

Anonymous said...

Is that even in English? It makes no sense to me (the quote from the Q3 earnings call). Lol! Their current prices would be one thing if the items were of great quality and that quality equated to the price. But it doesn't. There are zero design elements that justify the higher prices as everything is straight, boxy lines and gone are the cute pleats, ruffles and feminine fit along with being a great technical piece. They toss a 6" piece of elastic in the back of a jacket and call it design. I call it cheap. :P

That Break Free kit really isn't much different than the $25 one I can get at TJMaxx. In fact, the one I found at TJMaxx worked better and was designed better. Train case type makeup bags just take up way too much room in a suitcase anyway so I don't buy them but thought it was interesting.

Alyssa Van Diest said...

Ironic that you post this, because I noticed that my Sit in Lotus sweater ($98) was stickered over a $128 tag.

Anonymous said...

what does Stuart even mean? lol that comment makes literally not sense it's like a run-on blurb of nothingness LOL

LuluAddict said...

@ anon 10:26 am - I think it translates to BCG - Boston Capitol Group - consultants studied our pricing and told us we could really jack them up, versus stepping them up by a couple of $, to better match our industry peers. From what I can tell, the massive jump in prices is what really pissed the loyal customers off (but the blah designs is putting nails in the coffin). I'm not sure what the "sophisticated approach" is. because it seems to me they mostly play a game where they overprice everything, very little sells, and people wait for it to go to markdown before they buy. I wonder how badly Swiftly sales have tanked. The $10 price jump really made SS and LS very psychologically prohibitive to me and I've only bought one SS since the price increase.

@ anon 8:47 am - they were uploaded yesterday, I believe. Maybe they restocked them. From what I have read they fit snugger than normal so size up if you are in between sizes.

@Alyssa - very interesting on the re-pricing there, too. I do like the Sit in Lotus sweater a lot and was considering it at the $98 point.

LuluAddict said...

I should add that quote is from a transcript of the conference call and when you read the answers to the Q&A questions, where management is usually trying to finesse some answer, it tends not to read that coherently.

Anonymous said...

In defense of the pricing comment, I think they may have added better inventory tracking behind the scenes. I've been watching pricing on WMTM (yes, too much time on my hands) and whoever's in charge of it has been playing around with it a lot. Items get more and then less expensive. To consumers, I'm sure it reads like a game, but I think someone's simply trying to understand the market/consumer, and see what price moves product and where it starts to stall. This can make you nuts as a consumer, but from a company perspective, it's smart. They want to price items at the highest point before customers start balking. The only way to really know what that is is to test your theories.

LLA, totally agree on Swiftlies and on top of what you wrote, they released a very popular series where they used black for heathering and it culminated in the extremely popular all black Swiftly and then (if I recall correctly), they upped the price. After that, there weren't very many interesting colors released, so sales probably fell off a cliff.

Fallwintergirl said...

They sent me the 25.00, I bought 2 headbands for 36.00. So they made a big 11.00 off of me. I need a bigger incentive if they want me to spend that kind of $$ on clothing that I'm not actually in need of

Anonymous said...

I HATE it when executives start speaking bureaucratese. In all that verbiage, the message was simple: we are going to raise the prices. And they did. And buyers didn't swallow them. Now they are backtracking, realizing that they went too far and this kind of pricing is not sustainable. You can't blame them for trying, especially since it boosted their Q3 earnings, which they badly needed. But let me tell you, if they stay on the design path they have been on, no amount of price twisting will help them.

Anonymous said...

I purchased Blooming Pixie WU Crops on December 13, so it has been at least two days (however i didn't see it online yesterday). I should get them this Saturday (shipped from Ohio to Maryland today).

Anonymous said...

Was the $25 apple pay promo funded by apple or lulu? I thought that was interesting also. Mostly because - there were no strings attached. I ended up not even wanting anything from my order (surprise!) and the gift card remained. As did the ebates, interestingly.

Anonymous said...

The $10 increase in swiftlies really put a halt to my purchasing them as well. I haven't purchased any at full price since then. Only ones I have purchases have been $20-$25 from the outlet (one I even had sitting in my cart on the Lulu site waiting for it to drop again). $49 on WMTM for a tank is more than the old regular price of $48 and one i'm still not willing to swallow. Got the same tank for $25 at the outlet.

Looks like the Vinyasa and the Define is now on the way out. If they continue to get rid of the main core technical items I buy (all that's left is swiftlies and speed shorts at this point) there won't be anything left for me to buy.

LuluAddict said...

@ anon 12:21 pm - they definitely added better inventory tracking to their system. Have they been raising and lowering the price on WMTM? I've only noticed decreases on things I'm interested in. Them playing with dynamic pricing in WMTM is not unusual. I wrote about it back in 2012: http://www.luluaddict.com/2012/12/is-lululemon-flirting-with-dynamic.html where they bounced prices around then, too.

You would think they have quite a bit of data on pricing but perhaps it didn't move over with the new system. Or, perhaps they wanted to push beyond their current envelope.

Amy said...

I think Lululemon needs to be careful here. It feels like J. Crew did something similar, where they seemed to jack up prices to a breath-taking level and then held there for a bit. And they had a few bad quarters and their stores were empty.

Then the deluge of discounts/sales began. I think once that discounting mentality gets into consumer's heads, they wait for sales. And that means that retailers can't generate as much cash without price cuts, because a percentage of your customers are waiting for that.

I think Lululemon had a wonderful thing going. Your excerpt from the conference call suggests that they let the beancounters in, and that's where creativity gets flushed down the potty imo.

I mean, Lulu had some pretty crazy stuff in there too, which probably led to waste. Some of those designs were not winners. But now they've taken all the innovation out, which may lower the risk of unsuccessful designs but there are very few "omg I NEED that" winners because no one's taking any risks.

And the blander designs means that the Lulu reputation as an innovator gets watered down.

I'd venture to say they have another year to pull it out. At that point, they'll have to start shedding stores.

Anonymous said...

That quote doesn't make any sense.

Here in Australia they've actually repriced a bunch of items UP with new price stickers over the old prices, both for women and men.

Anonymous said...

Yes, they definitely have been playing with pricing and it's another reason it's turned me off as a customer. I ordered a ftbw bra in July , never received it - it sold out. It was restocked later at a higher price point. I called the GEC to explain the situation, they told me it was "not in their control " and would not honor the price I had originally paid ( for the exact same item, size and color - even when I had called previously when I had not received it and it sold out. " no mam we don't have any stock anywhere." Then it comes back at a higher price point?!?! WTF. Yes, I did buy it be I had really, really wanted it. Now , it's back on wmtm at a reduced price!!!! I feel so agitated. But, at the same time they jacked store prices and it really burns me as a consumer bc I could understand if it applied to new stock items, but to see the changes on current existing inventory is a massive slap in the face. They cured me of my addiction this Fall. I used to buy weekly. Now, it might be one item in a blue moon off wmtm or ebay. I keep an eye on things in case they may change for the better ( and bc the last time I took a lulu hiatus I missed out on beachscape!) So, I keep an eye on things and really have to LOVE it to buy it. For the first time in months, I was excited to see blooming pixie pop up on wmtm. It sold soooo fast and it's still double price on ebay.

Anonymous said...

Yes, I agree with Anon 12:21PM. I noticed the same thing bc I check WMTM several times a day (ever since I learned they sometimes do a random restock of just one item in WMTM on random days...doesn't happen often, but it does happen) They are playing around with the prices, with increases and decreases. Once I noticed it, I think I've bought even less. I haven't bought anything at full price in a very long time (I use to buy Tracker shorts at full price, until they went up to a ridulous amount)

Anonymous said...

Ugh Australia hasn't gotten any of these price adjustments and nothing new to wmtm for almost three weeks. If they don't do a good wmtm for boxing day sales I'm done with this brand, I've got enough from when they produced good stuff

Anonymous said...

they are playing with prices and inventory on WMTM. I also have lots of time on my hands (lol) and I see items priced up, then go a little down. then the same items disappear for a couple weeks only to pop up again at higher prices. it is a constant game of up and down.

OMG, please do not discontinue the vinyasas!!! I just 'discovered' them and I am hooked!!

LuluAddict said...

@ anon 9:34 am - I swear I've heard they are and going forward with the hideous wrap version instead. Major error on their part but it seems Holman wants to put his stamp on the company.

@Amy - I think that discounting mentality is now firmly implanted in a lot of their formerly-loyal customers. I got majorly burned on the Rain for Daze jacket - bought full price at $198 and it got marked down to $128. I also got burned on the Split Hoodie so I'm more cautious these days, especially on newer designs.

Anonymous said...

The Vinyasa Wraps are so ugly. I won't buy them. I will miss old Vinyasa Scarf :( If all these crappy changes lately are all Holman's idea, he really should be fired. I feel like he's ruining the company.

Anonymous said...

Yep I haven't shopped with lulu due to the obscene pricing and the styles ar just plain ugly.

M


Anonymous said...

Long time since I've read your blog. I stopped buying LLL when I quick being a PT/Group Exercise instructor. My current employment as a handy(wo)man/painter/tiler doesn't lend itself well to technical workout gear. But, I digress...I have sold off most my LLL items that I don't use on a regular basis as weekend wear or slumming around the house. I occasionally look at WMTM to see if there is anything worth picking up on discount. I gotta say...as an outsider looking in these past two years...LLL has declined vastly in design. If anything, the overall bland, repetitive colors and boxy styles really don't scream innovation nor the ridiculous price points they demand, even on sale items. It wasn't until just before this Christmas did I dive into updating my sports bras since most of my Free to Be's stretched out (thank you, post-40 weight gain and major job change), as well as my CRBs. What the hell is this CRB-II crap? I saw them in store recently (LLL was installed in my local mall--oh, yippee [sarcasm]) and laughed out loud because it reminded me of a similar top I saw at Target for $5.99 from their Champion line. I got a few stares from folks in the store...I laughed even more.
At any rate, to speak more to the price adjustments, I found this information a bit interesting. It seems LLL took out a sizable line of credit to the tune of $150M. I wonder if their annual earnings (or lack thereof) have created a budget deficit due to lackluster sales, outrageous price points and inferior workmanship ...http://marketexclusive.com/lululemon-athletica-inc-nasdaqlulu-files-an-8-k-entry-into-a-material-definitive-agreement-13/52083/

LuluAddict said...

@ anon 7:03 pm - thanks for checking back in! That article on the line of credit is interesting. I am dying to know how their holiday sales went. I really expected to see a lot more WMTM but maybe they're doing better than I thought. I was very bummed at the Boxing Day upload - nothing blew me away. It's sad because I am usually itching to spend my Xmas gift cards.