Lululemon Athletica Inc. plans to double its digital revenue by 2023, the retailer announced this week to investors.
The athletic apparel retailer, which ranks No. 81 in the newly-released Internet Retailer 2019 Top 1000, generated $858.25 million in online sales in 2018, according to company reports. Doubling its online sales in the next five years is in line the retailer’s current sales growth, as its 2018 online sales increased 48.6% year over year and a five-year web sale compound annual growth rate at 26.7%, according to Lululemon.
The goal realistic, says Paula Rosenblum, co-founder and managing partner at retail marketing firm RSR Research.
“[Lululemon is] wisely hedging its bets on atheleisure—all good trends must come to an end—but leveraging the brand at the same time. It’s a good plan,” Rosenblum says.
Sucharita Kodali, an analyst at Forrester Research Inc. says the goal might not be aggressive enough, as ecommerce makes a lot of sense for Lululmeon.
“They don’t really discount their clothes, they aren’t everywhere, they have limited assortments in stores and everyone who is a shopper knows their size,” she says.
In addition to online sales growth, the retailer also plans to quadruple its international revenue in the next five years, double its men’s revenue, expand its product line into grooming products and make it stores more experiential. In 2018, 29% of Lululemon’s web sales were outside of the U.S., according to Top500Guide.com
Ecommerce sales accounted for 26.1% of Lululemon’s sales last year, the retailer reports. Lululemon also plans for its total annual revenue growth to be in the low teens for the next five years.
It plans to increase its square footage each year in a low-double digit percent, the retailer says. Part of that will be for more experience-driven stores. The retailer plans to open a 25,000 square-foot experiential store in Chicago in July to showcase its experiential goals. The store will have a yoga studios, meditation space, healthy juice and food, and areas for community gatherings. In 2018, Lululemon hosted 4,000 local events, such as yoga workouts and 10K runs.
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