Last week, Lululemon Athletica Inc., reported strong second-quarter results, beating analysts’ popular and ambitious projections by $.08. Despite a recent dip in stock price back in June — and, as of yesterday, a legal battle with Calvin Klein over patent infringement — the 14-year-old yoga apparel brand has enjoyed considerable success since its IPO in 2007. Its profits rose by 51.1 percent last year, and, as of yesterday, the company’s stock price has risen approximately 64.8 percent year-to-date. In our Digital IQ Index: Specialty Retail report, released last week, our research shows that Lululemon has increased its investment in digital, a decision that appears to be paying off. For example, e-commerce has accounted for 13 percent of the company’s first and second-quarter sales this year–a significant five percent uptick over 2011. By reducing operational costs and switching from a shared to an in-house e-commerce platform, Lululemon has streamlined its ordering and shipping processes and increased overall efficiency. Numbers prove that customers like the changes.
Also in our findings, the brand’s site, which was redesigned last November and features a distinct emphasis on community building and management, distinguishes Lululemon from competitors like Adidas by Stella and GAP’s Athleta. The brand’s increased presence on social media platforms, Instagram in particular, also boosted its digital profile in 2012. All told, with a 36 percent year-over-year increase in Digital IQ, Lululemon, which ranked No. 12 and earned “Gifted” status this year, was one of our report’s most impressive case studies.