lululemon uses yarns that recycle carbon emissions, while continuously placing carbon emissions using fossil fuels in the atmosphere, which seems ridiculous.
lululemon has been mixed recently.
In the middle of this month, lululemon released its second quarter financial report for 2022, with revenue of US$1.868 billion, and increased by 29% year-on-year; net profit was US$289 million, a year-on-year increase of 39.42%. Although the revenue scale is far less than Nike (US$11.4 billion) and Adidashml3 (US$5.7 billion), the market performance of the two giants this year is not optimistic. Whether in terms of revenue growth or net profit growth, lululemon has shown a strong momentum of singing all the way.
However, shortly after the financial report and sustainability report were released, environmental organization Stand.Earth discovered a problem from it: while making money in a crazy way, lululemon's greenhouse gas emissions have also risen all the way, and the emission density of is 9% higher than in 2020 .
htmlOn September 17, thousands of protesters took to the streets to protest, including many yoga enthusiasts. comes from more than 30 countries, and more than 1,500 protesters have signed a statement that will strive to convert the lululemon factory from traditional energy to clean energy by 2030. Although lululemon has a "plan to reduce fossil fuel emissions", smart consumers do not buy it: "Another marketing lie, there is still a gap between ideals and reality."
Protesters gathered outside the Vancouver store in lululemon Picture source | Omid Toussi/New York Post
In fact, lululemon is not without environmentally friendly actions. Back in the last year, lululemon worked with biotech company LanzaTech to create the world's first yarn and fabric that uses recycled carbon emissions, which were originally the source of pollution that would be emitted into the atmosphere. After Yvon Chouinard, founder of outdoor brand Patagonia, abandoned the company's ownership of the $3 billion market capitalization, lululemon founder Chip Wilson also followed suit and announced that he would donate $100 million with his wife Summer to purchase British Columbia forests and buy back mining, forestry and other resource licenses.
It seems that lululemon has already had some environmental protection behavior, so why is it encountered such a large-scale protest this time? Why did Nike and Adidas, which had higher market capitalization, not face the same protest? Is lululemon's ESG strategy failing? Chip Wilson, the founder of
lululemon, was not profitable when he sold his previous company before he founded lululemon, and he had been struggling with the pit of starting a business for 15 years.
When Chip started his business again, he figured it out and made the three engines to the extreme - crowd, category, and channel.
lululemon stepped into the dividend period of awakening for American female users. As Chip said: "This never-existent market segment is about to become a new order in North America - they are women aged 24 to 35, single or engaged, have no children, are highly educated, proficient in media, have athletic talent, like to travel, have their own apartment, earn $80,000 annually, and are very fashionable."
, and Chip believes that this part of "super girls" tend to buy less quantity and better quality clothing, and are willing to pay for good materials and designs. Although there were few cases of women buying sky-high sportswear in the sports market at that time, Chip still proudly and viciously priced its products at three times higher than the same category.
There are people and products, and the most brainwashing and critical link of lululemon is here. Getting experience from previous entrepreneurial project Westbeach, Chip decided to completely make lululemon into the DTC brand . Many people believe that the benefit of DTC is to reduce the "intermediaries' profit difference". But this is just one of the benefits. The most important point is that it can ensure that the service, brand temperament and user experience perceived by users when they come into contact with the brand are the ultimate.
This is why lululemon is willing to pay employees (educators) 30% more than elsewhere. Save the intermediate channel expenses and spend the extra money on services to increase user experience and thus increase premium.
If lululemon only stops in these three steps, it can only become a somewhat innovative and well-mannered brand, rather than today's lululemon, and there will not be so many fanatical users to follow. The reason why
lululemon stands out is similar to Oatly's breaking circle - Radical marketing pace and values .
Oatly was originally just an ordinary and earning small money. It was not until CEO Toni Peterson was introduced in 2012, and "bumped into porcelain" milk with slogans such as "Wow, no cow" and "touched porcelain" milk, which also sued the milk, which catered to some people's values. Foreign media also commented: "Whether you like or hate this CEO - he is popular."
Lululemon is more skillful in using it in the matter of hitting the porcelain.
At that time, many Japanese came to Vancouver to buy things. Sports clothing brand Roots Athletics promoted their products very sporty. Lululemon made an advertisement and found a woman wearing Roots clothes, with the slogan saying "Trendy clothing designed for rich Japanese tourists."
Some people say that Nike uses child labor, lululemon just made an advertisement, and he personally went to work as a model, wearing a diaper, sitting in front of a sewing machine like a baby, and posted a slogan: We believe in child labor.
"We believe in child labor" advertisement Source | lululemon
lululemon religious brainwashing is used very skillfully. First of all, lululemon calls the store’s grassroots shopping guides "product educators", giving this function a sense of honor, and invites yoga coaches and KOLs to make guest appearances from time to time, which makes these people have a deeper sense of belonging to the brand.
Yoga coaches, dance coaches, KOLs, etc. will also be forced to be bound by lululemon. These people are "professional" in the hearts of users. Lululemon's values and brand concepts will also be attached to them, and they will penetrate downwards with pyramid makeup.
In this way, each store will rely on brand educators, brand ambassadors, etc. to conduct "human penetration". When all the sports and fitness circles in the surrounding stores are penetrated, a Chrisma effect will be spontaneously formed, that is, "leadership is often associated with a certain unique personal charm."
When the store holds a yoga event, participants are present in person, and it is difficult to ensure that they are not influenced by the values promoted by lululemon: use my power to influence the community and the world.
The most successful brands are often good at dream creation. lululemon has created a common value for the urban middle class: health, love sports, be positive, and care about the community and the world. Lululemon's fanatic fans, buying brand premium is actually buying dreams and values.
ESG's dream bubbles and paradoxes
lululemon does environmental protection and care about the world? There are really, and there are more than one.
Last July, lululemon began working with biotech company Lanza Tech to create the world's first yarn and fabric to recycle carbon emissions, which were originally the source of pollution that would be emitted into the atmosphere. After Yvon Chouinard, founder of outdoor brand Patagonia, waived the company's ownership of the $3 billion market capitalization, lululemon founder Chip Wilson followed suit and announced that he would donate $100 million with his wife Summer to purchase British Columbia forests and buy back mining, forestry and other resource licenses.
However, when this group of smart middle-class consumers find that lululemon, which claims to be "healthy" and "changing the world", has a carbon emissions in 2021 that are so much higher than last year, and clumsyly defends that there is a "plan to reduce fossil fuel emissions", it will inevitably be furious.After all - For brands that use values to attract customers, the stain on values is the unforgivable .
Image source | Stand.Earth
Environmental protection organization Stand.Earth led protesters to do yoga for 90 minutes inside and outside the lululemon store
In fact, lululemon's "following" behavior has long been traced. As early as 2013 and 2015, lululemon recalled products twice overseas, including yoga pants and women's tops. Once in 2015, a consumer suffered eye and facial injuries due to a rope failure. This storm has caused a stock backlog, and the company has to digest inventory at a higher discount rate (estimated to be about 40%).
According to the data of Tianyancha , in China, lululemon affiliate Lululemon Trading (Shanghai) Co., Ltd. has been punished at least 3 times for product quality issues. All the punishment incidents are " is doped or adulterated in product , using fake as real, inferior as good as good, or using unqualified products as qualified products."
Is there any necessary connection between product quality issues and non-environmental behavior?
The answer is yes.
Sustainable Accounting Standards Committee (SASB) once proposed that ESG issues can be divided into two major issues: substantive and non-substantive. Substantive issues will have an impact on corporate performance, and non-substantive issues have little impact.
SASB has also launched a new industry classification method, which classifies enterprises based on the business type, resource strength, sustainable impact and sustainable innovation potential of , etc. This is the Sustainable Industry Classification System (Sustainable Industry Classification System), referred to as SICS. SICS divides enterprises into 77 industries.
In traditional ESG disclosures, although many companies publicly disclose environmental, social and governance (ESG) information, it is difficult to evaluate which information is most useful. This classification system points out substantive issues affecting the financial status or operational performance of an enterprise and develops key performance indicators that are different for each industry.
SASB defines the key indicators for the consumer goods industry
lululemon belongs to Apparel, Accessories & Footwear (clothing, accessories and footwear) subdivided under Consumer Goods. Substantive issues related to lululemon, in accordance with the SASB's guidelines, include Management of Chemicals in Products, Environmental Impacts in the Supply Chain, Labor Conditions in the Supply Chain and Raw Materials Sourcing.
Whether it is product quality or the impact of the supply chain on the environment, it ranks top priority for substantial issues. If you cannot even handle the most essential and core issues well, there is no way to talk about the starting point of a company's "health" and "for the community".
A lesson from this incident gave the brand is to distinguish between ESG behavior and PR behavior. Whether an enterprise's ESG communication actions are properly used depends on whether the enterprise has a real ESG strategy and implementation behavior. If not, the action that floats on the surface is just a PR behavior used by the company to decorate the storefront.
Common ESG transmission actions Landing TouchBase mapping
Give an example to illustrate that if the company can reduce emissions as a whole and have a positive impact on the environment, it is called ESG behavior. If the company only makes an environmentally friendly T-shirt for the sake of public image, claiming to be made of environmentally friendly materials, but it is unknown whether making the T-shirt consumes more resources and causes more pollution. This is called PR behavior.
Another example, on the eve of this year's Women's Day, TouchBase counted the measures of 133 listed companies in the protection of women's rights and interests, and found that only 11 companies had implementation measures, accounting for about 8.27% of the overall proportion. Among these measures, there is also a clear distinction between ESG behavior and PR behavior.
Data comes from the China Association of Listed Companies Landing TouchBase Making
For example, equip employees with maternal and child rooms, adhere to the principle of equal pay for equal work in , and hire female employees without discrimination, etc. are ESG behaviors. The collection of works of "female workers' talents" and reading on WeChat are PR behaviors in the absence of practical guarantees and implementation measures.
(Extended reading: Starting from the pornographic gaze in the war, is the rights of women in ESG a cover for corporate PR?)
Similarly, when lululemon uses yarn that recycles carbon emissions, it is ridiculous and unleashes carbon emissions using fossil fuels in the atmosphere while continuously placing carbon emissions using fossil fuels in the atmosphere. When lululemon founder Chip Wilson also followed Patagonia and donated 100 million Canadian dollars, it will attract another "wolf" distrust - the capitalist's tax avoidance trick.
article | Guojiajia
Editor | Wang Zijing
About landing TouchBase
Landing TouchBase is an ESG vertical media platform dedicated to changing society with business reports. Starting from ESG investment and ESG practice, TouchBase focuses on topics such as sustainability, carbon neutrality, and corporate social responsibility, and truly reflects the current ESG ecology at home and abroad. For issues such as gender, disability, and educational equity that are missing in mainstream narratives, landing TouchBase pays special attention. (WeChat official account: Landing TouchBase)
