E-Commerce Startup May Oust Lululemon From The Market
With its vertically integrated model that uses crowdsourcing and social media focus, Ellie looks to take on the luxury yoga brand.
Same quality but cheaper price sounds like a pretty good deal, doesn’t it? The problem is, most of the time, it is not feasible. Despite this, Ellie, an online-only women’s athletic clothing brand, is seeking to prove that it can make yoga pants, capris and tops on par with luxury label Lululemon, at half the cost.
The Canadian brand has dominated the yoga gear market since it arrived on the scene in 1998 but it is equally known for its high price tag as well as its healthy mantra. This left a gap in the market, says Ellie co-founder Marcus Greinke:
Lululemon is regarded as the pinnacle but it’s also a luxury that many can’t afford. That’s why we realized there’s truly no one in the market at the middle ground of $30 to $70.
Ellie is not your traditional fashion brand, but rather comes out of incubator company, Science Inc., based in Los Angeles. It uses the same high-quality fabrics (anti-microbial, moisture-wicking) and high tech processes as Lululemon but while Lululemon leggings costs $78, Ellie leggings will only cost you $42. How is this possible? Says Greinke:
We’re applying a good bit of tech start-up mentality into a very traditional industry… Why should you pay $130 or more for workout clothes like yoga pants? A healthy lifestyle should be attainable for everyone, and Ellie wants to make sure you look and feel good whether you begin or end your day with a trip to the gym.
The key is that Ellie is a vertically integrated company, so many aspects of the business that are normally outsourced, are done in-house. The brand has its own design team and local manufacturing supply chain, and with no bricks-and-mortar-store, overhead costs are low.
Moreover, it is using social media to it advantage, turning to Facebook users to gather feedback. Since there is a pattern-maker onsite, a prototype can be made within 12 hours and then be shared on the site for fans to comment on. The most popular styles can then go into production within four days and be made available for mass retail in 2-4 weeks, much quicker than normal. It would take a brand such as Lululemon 8-12 weeks to produce a similar garment. In this unique model, Ellie is building a relationship and having a conversation with their customers that will actually affect the product they make.
The company recently announced a 2 million dollar investment by Trinity Ventures, Rustic Canyon Partners and Blumberg Capital and launched its e-commerce site last week. Time will tell if the model is successful, but Lululemon should be shaking in their $78 luxury leggings.