What sets certain brands apart in a crowded marketplace?
For lululemon, the answer lies in a strategic approach to core innovation to drive immediate growth while paving the way for future opportunities. This deliberate methodology keeps the brand relevant, distinctive, and consistently valuable to its customers year after year.
By balancing creativity with methodical execution, lululemon has crafted a scalable and repeatable innovation framework that innovation managers and corporate leaders across industries can draw inspiration from to elevate their strategies.
In a recent Innov8rs Learning Labs session, Rachel Gordon, Founder of Triple Agent, and Chantelle Murnaghan, Vice President of Research and Product Innovation at lululemon, gave an under-the-hood look at how lululemon leverages core innovation to remain a trailblazer in the market.
Rachel Gordon & Chantelle Murnaghan
Founder at Triple Agent | Vice President of Research and Product Innovation at lululemon
What is Core Innovation?
Core innovation focuses on improving existing products, services, and processes to better suit the current customer base. It is often overlooked, but Rachel and Chantelle remind us of its importance as the engine that keeps businesses competitive and relevant in the short term, usually within the one- to three-year timeframe.
Rachel explains that this Horizon 1 innovation “still requires planning and investment, and a lot of companies really struggle with that.” Unlike transformational changes, core innovation builds on current capabilities, involves relatively low risk, and uses clear, straightforward metrics to measure success.
However, organizations need to strike the right balance between core, adjacent (expanding into new markets or customer segments), and transformational innovation. While core innovation ensures short-term relevance, placing too much emphasis on it can limit opportunities for growth in the long run.
How lululemon Approaches Core Innovation
At lululemon, core innovation is about improving what’s already there as well as designing systems that can cultivate growth, maintain customer trust, and lay the groundwork for future innovations.
Chantelle explains that their team’s purpose is clear in this regard. “Our mission is to unlock new sources of growth. New platforms, new products, and components,” she shares.
“Core innovation provides immediate value to the company, which I leverage as an ROI to actually fund and experiment into those other future-oriented spaces.”
This is achieved through a thoughtful process that ensures connectivity across lululemon’s product architecture, combining immediate relevance with long-term differentiation.
Here’s what makes their system effective:
Structured and Repeatable Processes
A standout feature of lululemon’s core innovation is its structured and repeatable process. Chantelle highlights the integration of their product commercialization calendar with a specific focus on a subset of products deemed high-volume or strategically important. This ensures that their team isn’t “peanut butter spreading on everything” but instead zeroing in on the ideas with the most potential. Rachel adds, “The key to success is creating a repeatable test-and-learn-and-commercialize system.”
Relevance, Differentiation, and Value
To stay ahead in the crowded apparel industry, lululemon works toward delivering what Chantelle calls “holistic concepts” and “differentiated value propositions.” This means ensuring that every innovation aligns with customer expectations and adds something new and meaningful, even in highly familiar product categories.
“Even when we’re in categories that feel quite familiar to people,” Chantelle explains, “we are constantly asking ourselves what our orientation is and how we are eating the big fish in this space.” This focus on “bold and novel, enduring and valuable” is a key aspect that sets lululemon apart from its competitors.
End-to-End Insights Integration
Insights play a pivotal role in lululemon’s core innovations. At every prototyping phase, Chantelle’s team conducts scientific and qualitative tests to ensure that new products deliver as intended. This method of testing, learning, and fine-tuning is systematic, emphasizing robust customer insights and competitive analysis across development stages.
Core Principles That Guide Strategy
The following philosophies drive lululemon’s innovation strategy across horizons while anchoring their core innovation efforts:
1. Science of Feel
Unlike competitors who might introduce incremental product features (e.g., a single new material), lululemon focuses on a full sensory experience. This involves integrating every element from material and construction, to fit and how it feels during use.
This holistic sensory approach enhances user satisfaction, which in turn strengthens brand loyalty by creating memorable, repeat-worthy product experiences. “Holistic product experiences create a new experience in the market from what has existed before,” says Chantelle.
2. Dynamic Design vs. Static Thinking
Chantelle frequently challenges traditional design processes that focus on static scenarios, like fitting garments to stationary forms. Instead, the brand prioritizes designs suited for movement and activity. “We always have to be thinking about how to build for someone in motion, under dynamic conditions,” she says.
3. Elevating Experiences Beyond Functionality
It’s not just about minor performance enhancements, but about creating experiences that surprise and delight customers. For instance, inspiration can be drawn from the Speedo swimsuit example Chantelle cites, which sacrificed user feel in pursuit of engineering precision. At lululemon, experience and functionality are equally essential.
Real Examples of Core Innovation at lululemon
Here’s how these principles come to life in the brand’s innovation practices:
An 18-Month Cycle for Core Improvements
With an 18-month commercialization timeline, lululemon carefully plans every stage of its product evolution—from insights to prototyping and customer validation.
Their core innovation team, dubbed lululemon labs, works closely with merchandising and design teams to refine high-priority products. Only about 18-20% of net-new products are targeted, prioritizing big-volume bets that can deliver measurable value.
Products Rooted in Differentiation
Examples of successful core innovations include the introduction of dynamic and multi-functional apparel that offers both technical performance and comfort.
By designing products that fit real-life scenarios (like sitting in casual wear), lululemon products often stand out, not just for how they function, but also how they enhance the user’s overall experience.
Challenges in Core Innovation
Core innovation comes with risks, even when following best practices. Rachel identifies several pitfalls, including cannibalization, where frequent product updates can cut into the market share of existing offerings. Another is the tendency to create “me-too” products, where companies focus too much on matching competitors instead of leading with originality.
For instance, Rachel recalls PepsiCo’s delayed innovation during the rise of sparkling water brand LaCroix. Instead of identifying a unique opportunity to lead in the space, internal discussions centered around the need for a “LaCroix fighter.” The result was Bubly, which eventually gained traction but took close to two years to develop and launch. This highlights how reactive, competitor-led thinking can slow down innovation and undermine differentiation.
Overemphasizing core innovation can also hinder long-term growth and make companies vulnerable to disruption, Rachel warns.
“If you’re only focused on the one to three year horizon, you’re often only focused on the one year.”
A cautionary example is Sears, a retail giant with a firm hold on American households, which failed to invest meaningfully in digital transformation during the rise of e-commerce. Competitors like Walmart and Amazon moved aggressively into online retail, and by the time Sears attempted to pivot, it was too late. Rachel and Chantelle emphasize the need to balance incremental improvements with forward-looking investments to ensure sustainable growth.
Building Future-Proof Innovation Systems
lululemon’s success highlights the value of core innovation supported by scalable and sustainable systems. By leveraging AI, brands can recycle ideas and create bespoke tools tailored to their innovation process.
“With AI, you have immense potential to recycle old concepts and combine them in ways that deliver something entirely new,” Rachel explains.
Chantelle emphasizes that their approach integrates human insights with advanced tools like 3D avatars, enabling stronger products while making room for future-focused innovations. Their core innovation systems are designed to “raise the water level” of products while creating space to invest in Horizon 2 and 3 innovations.
Building a Culture of Core Innovation
For innovation managers and R&D teams, the key takeaway is that organizations must strike a balance between the immediate impact of core innovation and long-term strategic goals. Investing in efficient testing infrastructure, refining systems, and enhancing collaboration across teams are essential steps.
By embedding customer insights at every stage and ensuring that innovation serves both short- and long-term goals, innovation leaders can emulate lululemon’s success in the crowded and competitive market. Want to future-proof your innovation strategy? Start by building systems that make core innovation repeatable, measurable, and meaningful.
