One of the most recent examples of how consumers can make or break a company in a matter of months is Lululemon, the maker of premium yoga wear. Until quite recently, Lululemon was the darling of the apparel world. Its sales growth had caught the entire industry by surprise, leaving competitors such as the Gap, Nike, and Under Armour scrambling to provide their own alternatives.
Yet in a matter of months, Lululemon’s fortunes changed. Its customers began complaining of quality issues with some of its products, and even more embarrassingly, that its best-selling yoga pants were too sheer to wear in public. The fallout was immediate: after failing to acknowledge customer complaints promptly, Lululemon’s founder was forced to step down from his management role. The company eventually issued a costly recall of its yoga pants.
Lululemon’s supply chain issues only made matters worse. As it worked to improve the quality of its yoga pants, Lululemon fell behind in the development of new fashion items, which meant that it ordered new products later than it should have. This resulted in late deliveries and other problems such as tops arriving before the matching pants, which led to even more cancelled orders. Eventually the company admitted that it has seen its sales “decelerate meaningfully”.
Lululemon’s story shows just how volatile consumer sentiment can be, and also how important it is to develop supply chain strategies that give you the ability to see and respond rapidly to the end consumer. And yet so few companies have managed to become consumer-driven. Why? To find out, read the new whitepaper, “It’s a consumer-driven world: how retailer and manufacturers are overcoming the challenge of today’s empowered consumer.“
For more resources about how our world is becoming increasingly consumer-driven:
- The 4PL Revolution Roundup: Top 8 Opportunities for Today’s Logistics Providers - December 15, 2015
- Demand Sensing Round-Up (Blog Posts, White Papers, and Webinars!) - December 15, 2015
- Your Favorite Posts of 2015 - December 4, 2015