Lessons from Lululemon's See-Through Faux Pas

While such customer service events are not inevitable—or even very common—scandals like the recent Lululemon yoga pants issue can hit any business in any industry. When an awkward situation does occur, it can be devastating for the company in question if that company is not adequately prepared to manage such circumstances. Thankfully, a number of lessons can be learned from Lululemon's predicament, and certain safeguards against scandal can be put into place by any business, small or large. Following the six steps detailed in this article can help make a public embarrassment less likely and help prevent long-term damage if the worst does occur.

In Lululemon's case, an overly sheer batch of Luon fabric—manufactured by Eclat—was apparently at the metaphorical bottom of a widespread issue with some of the company's yoga pants. According to the Canada-based athletics brand, roughly 17 percent of its figure-hugging bottoms were made with the material. As a result, certain pants were effectively rendered transparent and unsuitable for use.

Although the pants were withdrawn shortly after being placed on store shelves at the beginning of March 2013, the repercussions for Lululemon have been serious. Certain company procedures for dealing with the issue—including controversial pant opaqueness tests performed in certain stores—have attracted significant negative media attention.

The sheerness issue is the latest in a number of problems for the fitness wear company, which was founded in 1998. Unfortunately, the consequences for the company are likely to extend beyond the short term this time: experts note that Lululemon revenues are projected to fall by $12–17 million in the first quarter of the year and by roughly $45–50 million over the rest of 2013.

Certain elements—such as raw materials from an outside source like Eclat—are out of a company's direct control; as such, it may not be possible to prevent every faux pas. However, some steps can be taken to prevent a full-blown media scandal:

• Quality control: Increasing the frequency of checks at every stage can identify problems before they reach your consumer base.
  
   
• Customer Service: One-on-one attention in a retail environment can add an extra measure of protection. Obvious flaws can be detected on-site before they inconvenience or embarrass your customers.
  
   
• Long term focus: It is wise to examine every stage of the product manufacturing process frequently, before problems ever occur. If your company is set up to offer your customers quality merchandise and excellent, personalized service, you may be able to avoid the worst crises.

Despite a company's best efforts, crises do sometimes happen. When a product issue does occur, the way that you react can either make the situation worse or stem the effects of a scandal:

• Put customers first: Many industry pundits agree that, particularly from a PR standpoint, a company should put the needs of its consumer base first. If a customer's reputation, health status, or safety is affected negatively by the way you handle your hot potato, the fallout is likely to further affect the image and the economic stability of your company.
  
   
• Make a list and check it twice: In the wake of an awkward situation, your customer base is likely to need reassurance. If you create a list of tangible measures you plan to implement to avoid comparable problems in the future, it can help assert your company's good intentions and reliability.
  
   
• Think long term: There are several insurance measures that can be taken by companies. Emergency funds can be placed in a specific account to be be used to fill a proportion of any deficit created by lost sales in the event of a product defect or similar unfortunate predicament.

As well as lost income, Lululemon will need to overcome the public relations nightmare created not only by the faulty fabric but also by its allegedly inappropriate reaction to the situation. The clothing company's handling of the affair in the coming months will most likely determine how well—and how quickly—its image recovers. For other businesses, particularly clothing manufacturers, the Lululemon dilemma presents a learning opportunity that they would be foolish not to take advantage of.

(Photo courtesy of Freedigitalphotos.net)