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Lessons - Building Reebok & LuLulemon | Bob Meers - Ex-CEO at Reebok & LuLulemon · Success Story with Scott Clary

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  in this lessons episode discover how to integrate sustainability into your business model effectively.
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  Overcome resistance to change and build brands that command premium pricing. Learn strategies to
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  influence consumer behavior, balance costs, and drive innovation while staying ahead of market trends.
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  So you you see this and you see that there's an opportunity there and you write it's not it's it's a
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  problem is opposed to just an opportunity it's something that most businesses should be focused on
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  but ultimately not not all are not all are as focused on it as as as what you're doing like the
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  business model that the the thesis of the business focuses on sustainability so there is the
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  opportunity there so say say you're a business leader and what you're trying to do is you're you're
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  trying to effectively tap into this movement but also make a part of your core business so it's not
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  just a nice to have but it's actually integral in how you build out your processes and you build
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  that your product and you communicate with your customer so for example for better for all you
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  focus on sustainability as a as a as a key component of your business how do you do that effectively.
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  Well I mean you first of all with sustainability you don't have to look very far you've got you've got
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  the tip of the spear being the Gen Z population that is 88% of them according to McKenzie
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  just think companies are blowing smoke in terms of they're trying to ease their way into sustainability
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  or trying to use solutions that already exist that really are not sustainable you've got
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  40% of that same population with making decisions on what companies they purchase and what companies
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  they support based on that companies commitment to the climate commitment to the planet
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  and commitment to sustainability that to me is a business opportunity and when you look at what
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  companies are pushing they're pushing old solutions that there is no recycling you know let's be
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  let's be candid there's 5% or less of recycled product goes into recycling and then the recycling
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  process in terms of sorting is so labor intensive that even a smaller portion of that gets recycled
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  people are tired of single use they really want reusable but not reusable forever they're looking
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  for reusable today want to get rid of it but when they want to get rid of it they wanted to disappear
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  in a reasonable amount of time and then they look what's this product made of am I depleting
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  the planet's natural resources so you know from my standpoint in terms of whether you're talking
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  to an entrepreneur why fight it consumer who is actually influenced the generation above them
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  the generation below them and actually is leading it is making a demand that is not going to go away
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  do you think get out of the way and make it happen do you think people fight it because they're
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  concerned about it's complicated it's expensive like all the regular pushback like this is
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  already difficult for me to figure out I'm just trying to build a basic business I don't have to
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  add layers of complexity onto it just to play a devil's advocate what are the reasons why somebody
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  wouldn't do this why availability I know we we check a look when we first started the business
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  packaging yeah you know and packaging is is is is sitting right there but now you're the product now
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  you're the item that you tear away to get at the product you bought and and now what do you do with
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  it now the ideal thing is to have have the the product disappear in a reasonable amount of time
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  but what what we chose to do with better form and we make a cup so we make a variety of cups
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  because one it's universal they used all over the world number two the night they used
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  normally in a celebratory way they're with a cup of coffee or a cold ring or a dull beverage
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  and that in is big so there's a big opportunity I was thinking I was looking
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  last week or or or recently it's just the red cup you know you they're producing 7.4
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  billion a year units a year and they think to myself if if you can just take a percentage of
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  that business you're going to have an impact on the planet let not take them away from it just
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  have an impact so why would a company go against it I've run into this myself this this will be a
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  rebar story so we had a enormous success bringing out a line of shoes designed for aerobics
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  and we expanded around that those items with soft garment leather white product and they they were
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  very very successful your success becomes your anchor because you're so busy filling the demand
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  you're not innovating behind that demand and more importantly you're not coming with the car
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  of the future and so consequently we peaked we started to go down and then we needed to come out
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  with something that fit consumer demand so we came out with the pump and the consumer was saying
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  loud and clear no differently than sustainability I want a product that gives me more support
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  I want a product that gives me protection I want a product that gives me custom fit I go back to
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  my days with the Porsche guy and I take a look at the pump shoe and I said does that shoe give you
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  support protection and custom fit and is it unique enough looking that it doesn't look like
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  everything on the market and that thing saved rebacks but so I look at companies why are they
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  resisting it candidly it might be because they don't have time to look at something or it's
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  not readily available in what they're doing or even worse than that that we're going to require them
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  retooling and yeah you know I would say it's more expensive not to change than it is to change
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  you know and that's not a euphemism I've been in the seat where you held on and turn the lights
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  out on the industry and that that is not a fun thing to do that's expensive you know one thing
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  that you've done very well across again all the companies is and you mentioned this briefly at
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  the beginning you've never been a race to the bottom you focus on building a product that can
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  command a price point in the market that allows you to create the best possible product and that gives
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  you margin to allow you to conduct business in a different way so if for example a sustainability
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  focus company say the product isn't as cheap I'm assuming that the the cogs on that product is
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  slightly more than a non-sustainable product but you've built brands that support that business model
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  effectively so that you can charge for a product that's a little bit more expensive to make or produce
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  even and I don't even know I could be incorrect it could be totally the same and happy to have
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  that conversation but the point I'm making is as somebody has done this repeatedly how do you
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  build that brand that that allows for that price point in the market that allows for buyers to be
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  okay spending a premium premium amount of money on whatever you're selling well I'm gonna I'm
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  gonna have to answer out of both sides of my mouth all right go for I think the answer you're
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  with I think to answer your your question and her short answer is who influences the buyer you know
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  how do you how do you influence the influencer so that you get your your trend setter
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  putting the product taking the product you get the early adopted taking the product you get the
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  general population to get in the product and the pyramid builds and so you're always looking for
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  do I influence through my yoga instructor do I influence through my coach do I influence
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  through my school do I influence influence through my team but how do I influence somebody um
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  the other one is coming out the other side of my mouth you can't price this product
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  based on cost because you look at the tech industry they've taught us anything with the
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  Amazon and you take a look at Tesla you've got a price it to where you get you get you can get the
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  volume you can get the efficiency you can get the raw material cost down and you get the accesses
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  to cross at some time in reasonable future but you're pricing the product at a slight premium not
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  an obscene premium and and and you keep your operating expenses at variable expense rather than fixed
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  so you get a you're going to look at what business am I in we've chosen to be in the design development
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  and marketing business now what we look for do we have experts in source in material do we have
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  experts in manufacturing who have experts in social media and marketing and in advertising and
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  promotion that we can access so that our expenses are variable and we don't make them fixed into
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  we actually have the top line revenue and margins to be able to support the company so I'm not true
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  I would advise people don't bury a company in fixed expenses that are not your core business
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  thanks for tuning in if you found this valuable don't forget to hit that subscribe button so
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  you never miss an episode and if you want to dive deeper into this conversation check out the links
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  in the description to watch the full episode see you in the next one