Digital Marketing Redux   //   April 25, 2024

How Lulus is marketing itself to a national audience

Apparel retailer Lulus is testing out a new marketing strategy as it works to build its profile offline and grow its customer base outside of California.

This month, Lulus will launch its first major national out-of-home campaign via billboards and posters in New York City, Los Angeles, Chicago and Nashville. It’s also planning in-person brunches in four cities this summer for influencers and shoppers to learn more about the business and its assortment.

This comes as the company tries to reestablish its presence both online and offline. Lulus, which began as a vintage shop in California in the 1990s, closed all of its stores to go online-only in 2008. However, the company opened its first retail store in 15 years in October 2023 in Los Angeles. It then put a bridal boutique on the upper level in February 2024. Now that it’s re-planted its flag in California, Lulus is turning to large-scale advertising to build a robust national audience and counteract softening sales.

Lulus markets itself as an attainable luxury fashion company. Many of its clothes, including rompers and dresses, are under $100. Today, 90% of sales come from its own branded apparel and accessories, although it also sells dozens of other brands like Betsey Johnson, Free People and Dr. Martens. The company, which has a presence in Nordstrom and Nordstrom Rack, appointed two new executives late last year to steer its next stage of growth.

The retailer’s new marketing campaign comes at a time in which the company is trying to turn itself around financially. While the company — known as Lulu’s Fashion Lounge on the stock market — reported record net revenue for the 2022 fiscal year, its net revenue for fiscal 2023, announced in March of this year, was $355.2 million, down 19% year over year. As of December, Lulus had 2.8 million active customers, a 12% decrease from 2022. Its market value now stands at some $50 million, down from $83 million in October and a nearly 90% decrease from its original valuation at the time of its IPO in 2021: $486 million.

Lulus has tried out-of-home advertising before via small-scale wild postings in Los Angeles. This new campaign, however, expands beyond the company’s base of California and is aimed at growing brand awareness — and possible sales — in general. It also arrives in tandem with the prom and wedding season, a historically busy time for the business.

“We’re trying to find new ways as a digitally-native brand to come offline and be able to meet her in person,” Patrick Buchanan, Lulus’ senior vice president of brand marketing, told Modern Retail. “The campaign is really geared to make sure that during the peak season for us, we are front and center and that people are able to experience the brand and in a way that helps us reach our [revenue] goals.” At its most recent earnings report, the retailer forecast fiscal year 2024 revenue to be between $350 million and $370 million.

Lulus will measure the effectiveness of the campaign via visits to its website, engagement on social media and how many people shop the brand, Buchanan said. The campaign also has a digital advertising component, and the company is bringing on a larger, more inclusive group of influencers to create content for social channels such as TikTok.

Many brands — including Lulus — are turning to out-of-home ads to build audiences outside of their core markets. Elvie, a British femtech brand, put up its first billboard ad in the U.S. in New York City earlier this month, for instance. In March, Coca-Cola folded street-art versions of its logo into OOH ads in Brazil, Mexico, Indonesia, Australia and the U.S.

While out-of-home advertising dipped during the pandemic, consumer-facing brands are back to using the channel as people spend more time outside or commuting. In fact, OOH was one of the fastest-growing ad channels in 2023, per data from the Out of Home Advertising Association of America. One in five of the top 100 OOH spenders in 2023 were technology or direct-to-consumer brands.

Anna Bager, OAAA’s president & CEO, told Modern Retail that OOH is becoming an increasingly popular route for brands. “There is no doubt the OOH space is seeing collective growth and progress,” she said via email. “Increased focus on innovation and unbridled creativity continue to drive impressive growth across our industry, and we see that continuing in 2024 and beyond.”

Lulus views its new campaign as “baby steps in the right direction,” Buchanan said. “Innovation is a big part of what we do, and I think that this campaign is really an attempt for us to continue to evolve and compete in a changing landscape.”