Why Is Lululemon So Expensive? (The Psychology of High-End Branding)

Lululemon is one of the most popular athleisure brands in the world. The company is known for the innovation and production of high-quality and functional apparel, committed customer service, and exceptional brand image.

But all this does not come cheap.

Lululemon is also an expensive brand. The average spend of a Lululemon loyalist can be anywhere between $90 and $150 per visit.

So, what makes Lululemon so expensive, especially when compared to traditional brands operating in the same space?

Let’s find out.

Why is Lululemon so Expensive
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Why is Lululemon so Expensive?

From what we can tell, the fans of Lululemon don’t actually consider the brand to be expensive. Instead, they tend to define it as something that is cost-effective.

Be that as it may, it’s clear that for an average American, paying $120 for a pair of leggings is not exactly normal. And yet, millions of them continue to engage in business with Lululemon despite the high costs.

So, there must be a reason why Lululemon’s products cost so much, right?

We’ll give you 15 of them.

High-Quality Materials

Lululemon uses only the best materials for making their products. They make sure that relevant features like moisture-wicking properties, breathability, and anti-odor technology are incorporated into their products to make sweat-inducing activities easier for people.

Naturally, using these instead of standard materials proves to be much more expensive, resulting in higher costs.

The higher quality of the materials used, however, is what makes Lululemon’s products so functional and unique. For example, what makes Lululemon leggings so expensive is their weightlessness, moisture-wicking properties, and breathability.

With so many functional benefits and a stylish appearance, customers are often willing to pay some extra cash to buy these products.

Constant Research & Development

Lululemon never remains stagnant. The brand spends a large chunk of its budget on Research and Development every year.

According to multiple reports, Lululemon’s research facilities are akin to a scientific laboratory. They constantly innovate, produce, and test new products with improved functionality and better design features.

This is actually a brilliant marketing move. Doing so keeps the brand relevant and the audience on their toes. Since they keep manufacturing new technologies and newer apparel, their customer retention rates are always high.

Naturally, the brand also has to make up for the money spent on research and development by increasing the cost of its products.

Use of Trademarked Fabrics

Lululemon does not use any traditional, outsourced fabric on its products. Instead, they tend to invent and use their own trademarked fabrics to increase the functional appeal of their athletic apparel.

Here’s a list of fabrics that they use:

  • Luon
  • Luxtreme
  • Nulu
  • Swift
  • Nulux
  • Everlux
  • Mesh

These fabrics are not only aesthetically pleasing but also provide various performance-based benefits to people who exercise. Luon, for example, is the brand’s signature fabric, and it has sweat-wicking properties to keep the wearer cool and dry during hot workouts.

By providing these benefits, Lululemon justifies its high pricing as the brand is actually solving a prominent problem faced by athletes.

Ethical Manufacturing Standards

A lot of big brands try and save a lot of money on production and manufacturing by outsourcing the process to third-world countries. While it’s a good business move, doing so often results in unethical practices and exploitation of labor as the manufacturing plant is not kept in check.

Lululemon, on the other hand, has always maintained high standards for ethical manufacturing. They have maintained healthy relationships with all the manufacturing units around the world and meet regularly with them to ensure compliance with industry standards.

The brand ensures that all workers are paid fair wages and that the working conditions are safe.

Maintaining these ethical standards is essential. But it also adds to the cost of production. As such, the brand makes up for it by increasing the price markup on its products.

Exclusive Retail

Exclusive Retail
Jonathan Weiss / Bigstockphoto.com

You won’t be able to find Lululemon’s products anywhere except for the brand’s exclusive outlets spread across the world and its official online.

There are many advantages to doing this:

  • There is no doubt about the authenticity of the product.
  • Competitive influence is eliminated completely.
  • Outsourced department stores can’t sell the products on clearance sales.
  • Limits accessibility to customers and increases the demand and value of the products.

The cost of setting up, running, and maintaining these exclusive stores and outlets around the world can be monumental. The company also has to spend a huge chunk on hiring staff to keep things operational in these outlets.

That’s another reason why Lululemon is an expensive brand.

Works on the Scarcity Model

Lululemon operates on the scarcity model of production. This means that the brand limits the number of units it manufactures in one season.

You might be wondering, isn’t this a stupid move if there is high demand for the products?

It’s the opposite of a stupid move. By limiting product availability, the brand is actually increasing the value of its athletic apparel. Customers have to compete against each other to get their hands on their wishlist pieces.

As such, they are willing to pay high prices at each turn.

Brand Value

Lululemon has been spearheading the athleisure revolution for more than two decades now. While brands like Nike and Adidas are always going to rule the Sports category, Lululemon has established itself as the forerunner in the athleisure niche, beating even the giants in this space.

That’s because they have been focusing on only one goal since their inception – to produce high-quality, fashionable, and functional athletic apparel for the masses.

The brand has successfully accomplished that and created a stellar brand image. This allows them to charge premium prices for its products.

Minimal Discounts Policy

Many brands make their way into a competitive industry by offering ginormous discounts on their products. However, that is far from the case when it comes to Lululemon.

The company avoids discounts and sales, as they can be detrimental to the brand’s image and value.

So, they focus on making their products highly coveted among the masses. One way to do this is to completely eliminate the possibility of any discount at their stores.

Customers, therefore, have to buy their preferred products at the full price.

Fortunately, there are some ways through which you can get Lululemon’s products at cheaper prices. The “We Made Too Much” section on Lululemon’s official website features off-season products that were overproduced and are available at lower costs.

Marketing and Advertising

Lululemon has a high marketing spend. With an elaborate strategy, they want to keep disrupting the market and not get lost in the trend.

Every year, Lululemon partners with a range of A-List celebrities and influencers to advertise the brand’s products to their followers. Moreover, they also employ various guerilla marketing strategies.

Celebrities like Kim Kardashian have also been seen advertising Lululemon’s exclusive products like tops and leggings.

Their marketing strategy takes up a huge chunk of their annual budget. To compensate, it’s natural that the brand charges a high price for its products.

Longer Life-Spans

What makes Lululemon so expensive is the longevity of the products they sell. Many Lululemon loyalists on Twitter and Reddit have claimed that the brand’s leggings and tops have served them well for over a decade without any visible signs of damage or degradation.

With this, the customers can justify why they are paying over $100 for a pair of leggings or a stylish top. In a way, the deal can prove to be cost-effective as the products actually last longer than items that would cost $20-$30 lesser but become unusable in a few months.

Focus on the Yoga Community

For a long time, yoga enthusiasts didn’t have a major distributor they could turn to in times of need. Sure, all sports-related brands launched yoga pants and other related accessories. But they never really focused on the sub-niche entirely.

With Lululemon, this is not the case. If we look into the history of the brand, the founder of Lululemon practically inaugurated the idea of yoga pants. Most of their products perfectly suit the needs of the yoga community.

Because of this, the brand has successfully captured a significant portion of the global yoga market. As there aren’t a lot of other brands that focus entirely on this sub-niche, it’s only natural that Lululemon has the license to hike up their prices.

Sustainable Production

One of the most impressive details about Lululemon is that they engage in a lot of eco-friendly and sustainable practices, especially when it comes to production.

The brand has committed to using eco-friendly materials like recycled polyester and organic cotton. As they are more expensive than the traditional alternatives, the price of the product will undoubtedly increase.

Design Features

While Lululemon products are known for their high quality and unique fabrics, the company does not stop there. It has launched a wide range of design features that not only increase the pizzazz of the products but also increase their functionality.

The four-way stretch feature, for example, allows leggings and tops to be stretched in all four directions, providing flexibility and freedom of movement during complicated compound movements.

The popular moisture-wicking technology used in most of Lululemon’s activewear helps the wearer prevent sweating and keeps their body dry and cool. Some of the products are also lined with anti-odour technology to prevent the growth of odor-causing bacteria.

All of these design features are part of the reason why Lululemon’s products are understandably expensive.

Product Testing

Before launching them into the market, all the Lululemon products are tried and tested at various laboratories to determine their functionality and performance in real-life situations.

This measure is important not only because it eradicates the possibility of sending out low-quality products and encourages maximum quality control, but also because it gives the company a clear idea about whether the product will provide sufficient functional benefits to the wearer.

With so much extensive testing, the cost of production and manufacturing is bound to increase.

Product Recalls

Product recalls, and returns are some of the most complicated problems faced by companies operating in the athleisure sector.

Naturally, Lululemon is not immune to it.

The company also prides itself on its commitment to customer loyalty. As such, Lululemon has a fairly reasonable and attractive return & recall policy.

So, customers have the freedom to test out various products and send them back if they are not satisfied with them. This might cost the company a significant amount of money.

So, naturally, the price of regular products will increase a little bit to balance out the risk factor.

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Final Words

While Lululemon is a premium brand, you don’t necessarily have to have deep pockets to become a loyal customer. Millions of regular Americans have made the brand their one-stop destination for all their athleisure needs.

While the products are slightly more expensive than the industry average, the increased costs are justified based on the quality of services offered by the company.