This Retailer Does Stores Right
Dec 6th 2011 3:05PM
Updated Dec 6th 2011 4:42PM
Over the recent Thanksgiving holiday weekend, I spent some time window shopping long after the Black Friday sales had ended. Along the way, I visited the first lululemon athletica (NAS: LULU) store that I had ever seen. It's clear why Lululemon ranks so high in sales per square foot. The store displays a lot of its products on the sales floor, and the women working at the store are very helpful and wear the products that the store sells.
Like Lululemon, Apple (NAS: AAPL) has worked on bringing a strong customer experience to its retail stores, with its "Geniuses" knowing a lot about the products which they sell. They allow you to casually browse while being available at a moment's notice should you have questions. There is something to be said about attentive but nonstalking customer service, where you are greeted upon entry into the store and not harassed like you are going to steal. It is easy to see why both companies rank high in sales per square foot and have increased versus competitors:
Sales per Square Foot
|Best Buy (NYS: BBY)||$799*||(5.4%)|
|Under Armour (NYS: UA)||$780||4.5%|
|Dick's Sporting Goods (NAS: DKS)||$188||4.2%|
Source: retailsails.com. *U.S. stores only.
Other retailers are different
While I was at the Lululemon store, the salesperson approached my friend and me, answered a question about the article of clothing we were looking at, and moved on to the next person. We were allowed to browse in peace without the constant harassment that often happens at other stores. This is a lesson that big-box retailers could learn well, as repeated trips to Best Buy have ended negatively for me after being approached by numerous employees while browsing.
I enjoy shopping at Best Buy, allowing me to buy things and immediately use them, unlike online retailer Amazon.com (NAS: AMZN) and it's minimum one-day wait. But Best Buy could learn something from the Lululemon approach, not hovering over customers' shoulders while they shop and simply being available in the event that an item needs to be found. This small change might not prevent shoppers from shopping online, but it might change the attitudes of the customers that still desire to shop at the store.
Growing but lagging presence
While I am a big fan of its products, Under Armour doesn't have a true retail presence like Lululemon. It is currently expanding its retail presence, but it has only 76 stores -- four full-price stores and 72 outlet stores -- that sell its products exclusively. It relies primarily on major sports retailers, like Dick's Sporting Goods, to sell its products, as well as a huge presence online. If the Under Armour stores can become a shopping destination, with attentive salespeople wearing the products, they might be able to increase its store sales, making it a true retail competitor.
My experience with Lululemon was limited prior to my visit to the store, but it is a company that I have discussed at length with my Foolish colleague Tamara Rutter; she likes Lululemon, I like Under Armour. Though you will never find me at a yoga class again, I could see myself wearing some of its other product lines. While I am still partial to Under Armour stock, my experience at the Lululemon store has prompted me to keep an eye on this exciting company. Do the same by adding Lululemon to your watchlist today.
At the time this article was published Fool contributor Robert Eberhard holds no position in any company mentioned, though his closet is filled with Under Armour workout gear. Follow him on Twitter @GuruEbby. The Motley Fool owns shares of Apple, Best Buy, Under Armour, and Lululemon Athletica. Motley Fool newsletter services have recommended buying shares of Under Armour, Apple, Lululemon Athletica, and Amazon.com. Motley Fool newsletter services have also recommended writing covered calls in Best Buy and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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