Lessons - Building Reebok & LuLulemon | Bob Meers - Ex-CEO at Reebok & LuLulemon

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