Lululemon Reveals Its New Mobile Payments Push in Loyalty Program Operations

December 12, 2018         By: Steven Anderson

A loyalty—or rewards—program is one of the biggest parts of any mobile payments platform, and as far as some are concerned, it’s the ultimate key to getting more users in on the mobile payments rush in the first place. Lululemon recently shared details on a loyalty program that’s proving to be a real lulu of its own, to the point where it’s planning to roll the program out into several new markets.

Amazingly, this loyalty program actually charges customers to sign up, a not-insubstantial $128 a year, no less. In fact, reports suggest that this fee may well increase because that many customers were interested.

The program, originally tested in the Edmonton market, offered customers free shipping, workout classes, a pair of pants or shorts, and access to “curated events” of a type Lululemon isn’t being especially specific about.

Regardless, the program came out just as some massive new surges in revenue emerged. The company saw $747.7 million in net revenue for the third quarter, which is up 21 percent against the third quarter of 2017. That’s a hefty gain by anyone’s standards, and with comparable store sales up six percent and direct-to-consumer revenue up 44 percent, it’s a safe bet this reward program had a hand in it.

Calvin McDonald, Lululemon CEO, noted that “guests are seeing value beyond just the product, “ and further noted “…It’s been exciting to see guests around the world respond so strongly to our product offerings and improved digital experience..”

It’s those third quarter gains that are compelling; it might not just be the loyalty program, but still. The third quarter is commonly a lull period for retailers between the “Mom-Dad-Grad Gift Corridor,” and the “Chrismahanukkwanzaa Spend Phase” as “The Simpsons” once far-too-aptly described it. Only back to school shopping prevents it from being a total loss. But seeing those sales climb in that period by that much suggests that there’s a very compelling reason to shop on hand, and the loyalty program could be it.

The millennial shopper especially favors experiences over things, and those “curated events” and workout classes could be driving some real success in the field. It will be interesting to see if Lululemon can hold those gains, or this was just a minor aberration in the numbers.