Disrupting the Market: How Lululemon’s Former CEO Boosted Stock Prices by 400%

Disrupting the Market: How Lululemon’s Former CEO Boosted Stock Prices by 400%

Christine Day has a unique specialty - she blows up stagnant industries with big, exciting ideas.

She first helped disrupt the coffee industry at Starbucks. Then she turned the downward-dog female sports apparel industry into a glowing sunrise salute as the CEO of Lululemon, where she grew the stock by over 400%.

And today, she’s rethinking healthy eating at a new startup called Luvo.

Want to know how you can do it, too? In today's TGIM Short, Christine’s going to share all her expert advice on how to disrupt the market with your business.

In this TGIM short, you'll...

  • Learn how to recognize when a market is primed and ready for disruption
  • Discover how to give your brand longevity and drive customer loyalty
  • Find out what disruption is, and which two factors can really set it off

Check out the full short below:

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Christine: "The pattern for disruption under need meets purpose is the power of the combination of those two things. If in the marketplace, somebody is competing only on a product, and you've actually brought passion and purpose that people are emotionally tied to, then you have a secret weapon in how you're competing in the marketplace, versus just a product that's sitting on the shelf that somebody might like or they know a jingle of. The disruption has to be the personal engagement and you only get that when you combine need and purpose. What I've seen at Starbucks is that need for community and connection and customization meets coffee. At Lulu, it's where the yoga mindset, the personal journey meets beautiful technical product for women and changing the retail experience."

"It's at Luvo, is where nutritious food meets this need for healthy living and the cost of raising healthcare, but changing food into a lifestyle, as opposed to the kind of warped relationship that we've grown up with with food. I think it's all about passion, whether it's the people that work for you or the people that you are engaging. When you can create this combination of purpose and passion, people see themselves in your brand. That's how a brand has longevity over time and they become loyal to it and then they don't substitute or switch, because they feel a part of your story. When you get consumers to be a part of your story as a brand, that's a great brand."

"The biggest opportunities come when a market has been consolidated and particularly when they've been consolidated and commoditized. I'll go back to the Starbucks example, coffee at that point was twenty-five cents a cup. It was really served in a dehydrated state, in a tin can and it was really the poorest coffee quality that was available that was not coming out in that cup. The high end of the market had disappeared. You were basically getting a black cup of coffee that was maybe highly, had a whole bunch of sugar and crème in it to make it taste good. That's what we grew up with and what was missing was the whole role coffee played in people's lives. Not only that third place away from home had to be reinvented, but what allowed the opportunity for Starbucks to occur was there was no place for community, and there was no place for high end and customized coffee anymore."

"By recognizing that the market had become highly consolidated and commoditized, that's what allowed the opening to reinvent the marketplace. The same thing happened at Lululemon. When you look at the Nike and Adidas domination in the marketplace and the channel that was being sold was through wholesale, there was no retail model. There was no direct to consumer. There was no beauty and pattern and there was no retail shopping experience. The market being consolidated and commoditized left room to come in the upper end. When you start to see consolidation or you see commoditization, that is actually the perfect time to introduce a new business model. When you see people saying it's a dying market, that means it's a market that's ripe for reinvention. That's the opportunity to figure out what is the consumer really looking for and why are they rejecting what they're seeing."

"You have to think beyond an idea. This is where I think a lot of entrepreneurs miss the ability to scale, because they don't actually think about how the business model part of their idea works. I see this in technology is particular. I'm very aware of a little small virtual reality company that I've been helping out, and their technology is great but they have been unable to figure out how to create a business model, and make it into something that somebody needs and wants. You can take all the investors' money for the technology, but if you can't figure out how to make it into a business model. For instance, Facebook had to become really good at being the next generation of television in essence, being the advertising model. If they couldn't figure out how to be best in class at that, they would never be able to transform their insight, their technology or their product into the marketplace. For Starbucks, they became a world class operator and understood how to create that great guest experience, to serve the coffee product in and learn how to scale that across the globe real estate and outreach and partners."

"At Lululemon, we studied twenty great companies to understand how to create a best of class retail organization. We got it down to three measures that matter, that I think you have to know this about any business that you're in. For us it was percent of products sold at full price, sales per square foot and then knowing what our average sales per week was that we had to do to hit that. That was our guide to how quickly we could expand. At Luvo, studying and understanding the grocery industry. I can have a great product but if I can't get it through the structural barriers and understand how to play with conventional grocery with trades band and with distribution dollars and how to reach the consumer through a social digital strategy versus commercials, I wouldn't have a business model. You have to understand how you're going to deliver a world class business model because otherwise you've not really disrupted the marketplace, what you've done is a create a new product."

Show notes:

About TGIM: TGIM is a podcast for people who can’t wait for the week to start. In each episode we’ll be bringing you inspirational stories about entrepreneurs who have overcome obstacles, built incredible businesses, and are now living the life they want.