Lululemon’s e-commerce sales bounce back

BI Intelligence

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Athletic apparel retailer Lululemon reported a 13% year-over-year (YoY) increase in net revenue to $581.1 million for Q2 2017, as e-commerce revenue jumped 29% YoY to approximately $112 million.

While it's worth noting that 14% of its digital growth stemmed from an online warehouse sale in the quarter, even without this bump, the retailer’s online sales grew 15% YoY. This marks the strongest e-commerce growth Lululemon has seen since Q3 2016, and a significant improvement from its flat online performance in Q1.

Lululemon’s revamped online offerings played a big role in its improved e-commerce sales. Earlier this year, the company announced plans to improve its online platforms, and its Q2 performance suggests these initiatives may already be paying off. In addition to its e-commerce growth, site conversions increased 30% relative to Q1. Laurent Potdevin, Lululemon’s CEO, attributed the increase in conversions to improved visual merchandising with better product photography and video on its sites, technical site enhancements, and an overall effort to create a more seamless shopping experience.

However, the retailer still has far to go in building up its online capabilities. Lululemon has been slow off the starting block with digital offerings — for example, it just started testing click-and-collect recently, which many retailers have been successful with for some time. Additionally, that the recent site improvements are having such a profound effect on conversions suggests Lululemon's online experience had serious shortcomings heading into this year. Lululemon plans to continue to improve its site, and is building out a team in Shanghai to capitalize on the digital opportunity in Asia, which are good signs that the retailer may be able to further the growth of its digital sales — a move that will be necessary for it to remain successful in the crowded altheisure space.

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