If you haven’t heard of LuLaRoe, you’re living under a rock, but just in case, here’s the rundown. LuLaRoe is a party plan company that sells comfortable clothing in bold, eye-catching patterns. They sell shirts, skirts, and dresses, but what they’re famous for is their leggings which are touted to be extremely comfortable—the word “buttery” comes up a lot when people talk about the softness of these leggings. And, like the title of this post suggests, they’ve done well—really well. In September of 2015, LuLaRoe consultants numbered about 2,000. A year later there were 35,000.
So, what’s the story? Why is LuLaRoe blowing up? In any direct selling company, the quality of the product plays a big role in this kind of fast growth—and LuLaRoe customers are fanatic about their clothing—but the most fascinating thing about the LuLaRoe story is the way that they’ve harnessed the power of exclusivity.
Their collection currently includes 32 styles of garments—dresses, shirts, skirts, and leggings—which come in different patterns. But they make a limited number of items in each pattern. So, when the last pair of purple tiger print leggings is sold, that’s it. When a LuLaRoe consultant places an order, she gets to choose which garments and sizes she gets, but the patterns she receives will be random. When a customer wants a specific dress in a specific print, she can’t order it directly from LuLaRoe nor can she ask her consultant to order it. She has to actively seek it out.
This might sound deeply frustrating. We’re all so accustomed to getting exactly what we want when we shop, but it seems that this break from the norm of modern shopping hasn’t frustrated customers so much as whipped them into a shopping frenzy. This ”on-purpose” product scarcity creates the perfect circumstances for what LuLaRoe fans call “unicorn hunting”—chasing down that shirt you love in that pattern you need. It makes shopping LuLaRoe an adventure and a challenge—both of which we often lack in our lives. It also drives customers to connect with more than one consultant and to spend more time browsing the virtual racks—much of LuLaRoe’s business is done right on Facebook—during which they may stumble across more pattern/style combos that they love.
Browsing through videos and blog posts, you’ll find consultants advising newbies to build their inventory well beyond the onboarding packages (which range from 284–503 garments)—which can be a scary proposition for companies with standardized products, but which actually works in your favor at LuLaRoe—and to “go deep before going wide”—in other words, decide what styles and sizes you’ll carry and then stock several items in each style/size combination before trying to carry every style. Carrying inventory by these principles means that you have more for people to look at when they browse their favorite styles and more chances for them to bite. You’ll also find a general attitude of camaraderie and comfort about sharing customers with other consultants. If you don’t have what someone’s hunting for, it’s really not a terrible thing for them to buy it from someone who does.
It’s rare that you see a company innovating successfully by doing the literal opposite of what we usually think of as best practices. Inventory loading is a dirty word in this industry, but at LuLaRoe it’s good business which isn’t just hype; it’s tried and true wisdom from successful consultants. LuLaRoe has been so successful that consultants and their partners and spouses have launched apps like ShopTheRoe and WhatDidISELL to help consultants manage, market, and sell their inventory.
Recently, LuLaRoe has gone through some of the typical growing pains we see in companies that experience this kind of hypergrowth but they’re not folding under the pressure. We’re keeping an eye on their progress and we’re impressed by what they’ve accomplished.