The “Camp Fire” wildfire that raged through Northern California earlier this week put women’s apparel retailer Lulus Fashion Lounge into crisis mode.
More than 50 of its 800-plus employees lost their homes and many others were displaced as a result. And while the retailer’s Chico, California-based warehouse survived, Lulus has had to deploy 50 industrial air scrubbers around the warehouse to purify the smoky air to ensure its inventory doesn’t incur smoke damage. “We’re in crisis mode, but we have to keep the business going,” says CEO and co-founder Colleen Winter.
Despite this calamity, Lulus’ spirits haven’t been doused. And Winter and the retailer’s executive team have big plans as it gears up for the heart of the holiday season and 2019. Thanks to an infusion of cash—it raised $120 million in May—it has been able to add more customer service features to its website and begin working to bolster its fulfillment operations.
Faster shipping plans
Lulus’ May funding round, which was led by venture capital firm IVP and the Canada Pension Plan Investment Board, will enable the retailer to open an undetermined number of fulfillment centers across the U.S. to shorten shipping times and reach more customers faster.
Currently, Lulus’ ground shipping orders are shipped within two or three days from its Chico, California or Ohio-based fulfillment centers and arrive within seven to 10 days. The additional fulfillment centers eventually will enable Lulus to offer two-day shipping for all of its customers, Winter says, without specifying when that might be.
“People want everything yesterday,” Winter says, noting Amazon’s effect on consumers’ delivery expectations. The e-commerce giant allows shoppers to receive free two-day shipping by subscribing to its $119-per-year Prime membership program. “People expect things within two days now,” Winter adds.
To date, Lulus’ approach to fulfillment has reflected its desire to keep its costs in check. The retailer is focused on turning a profit, Winter says, noting that it has been profitable every year since it launched in 1996 as a vintage boutique shop. That fixation on the bottom line has continued as its focus has shifted online, starting with its 2008 website launch, she says.
Lulus has grown roughly 50% every year the last few years with net revenue in the hundreds of millions, Winter says, declining to reveal more specific figures (Internet Retailer estimates Lulus generated $169.5 million in web sales in 2017, according to Top500Guide.com). “Because we didn’t take any funding money early on, we really built the business on a foundation of profitability,” she says.
A personal touch
Lulus positions its brand as an “affordable luxury” apparel retailer, and 90% of the items its sells are its private-label brands. However, that approach has grown increasingly challenging as Amazon—which has more than 50 private-label apparel brands—and others seek to grab market share in that space.
But Winter isn’t deterred. “We knew we had to differentiate through product and quality of product early on,” she says. “It’s easy for people to make a picture look good online, the follow-through is what’s important.” Lulus wants to follow through not just on the quality of its product, Winter says, but with personal styling services on its website as well.
That’s why Lulus added stylists who will work with shoppers one-on-one via live chat, phone or email. It also added fit experts to combat the challenges of ordering dresses online. Shoppers can chat with, email or call Lulus’ fit experts and share the garment they’re interested in ordering, measurements and body type, and the fit experts will find the best products for the shoppers’ silhouette.
The idea is to offer a more personal shopping experience that mirrors the service shoppers would receive at the original Lulus boutique. “We knew all the life events of our customers, such as who was getting married and who was going on vacation,” Winter says. “When we went online, that was the hardest part about creating a personalized shopping experience.”
Lulus also added a bridal concierge, available through the same channels, to help soon-to-be brides and their bridesmaids find dresses. Every bridesmaid in the bridal party can work with a personal stylist to find the right dress for the occasion.
It has also revamped its product reviews by allowing shoppers to filter based on height, weight, specific measurements and item size. Consumers can add photos to their reviews as well. Winter says the reviews have generated the most positive feedback from Lulus customers.
Since implementing these services in the past six months, Lulus has seen an increase in average order value, conversion rate and time on site, but Winter declined to reveal specific figures.
Holidays and beyond
Lulus recently added a free loyalty rewards program to its website called Love Rewards, which gives its members early access to sales, extra coupons and 15% off after every order placed to use on her next order. If a shopper has a Lulus account, she is already a member.
For its Love Rewards members, Lulus is offering a 25% sitewide sale for Black Friday. The promotion will be the first time the retailer has run a sitewide sale because it has typically relegated its discounts to specific categories, Winter says.
“Last Black Friday, I monitored exit surveys in the checkout, and we looked at social media feedback, and people wanted a sitewide discount rather than a Black Friday category,” she says. This Cyber Monday, however, Lulus will offer 40% off sale items with free shipping and no minimum. Usually, free shipping is only granted for orders more than $50.
Even as the holiday season ramps up, Lulus is working on its 2019 plans. For example, Lulus will launch an app in 2019 that will incorporate the personal stylist services it offers on the web, Winter says.
Lulus also plans to expand internationally since international sales are “a very small percentage,” Winter says. The retailer will focus on expanding into Canada, U.K., Mexico and Australia by implementing ways to better service customers in those regions, such as adding currency conversion and language translation on Lulus.com. After that step, Lulus will reach out to more international bloggers and social media influencers to get the word out.
“We’ve built a natural army of brand ambassadors [in the U.S.], so they have to love Lulus as much as we do,” Winter says. “We want Lulus to pop up everywhere.”
Lulus is No. 244 in the Internet Retailer 2018 Top 1000.
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