The company LuLaRoe has recently taken the stage as being an incredibly unethical and selfish enterprise, and this is because it has become largely known as a pyramid scheme. What can be taken from this situation is to look at the advertisement and public relations strategies and tactics that made LuLaRoe so popular in the first place, and then to see if those methods can potentially be reproduced or utilized by more wholesome companies.

The considerable question is: how did LuLaRoe become so popular so fast? And can their strategy be produced again? A few hypotheses to this question would be that LuLaRoe was directly aimed at their target audience with psychological advertising. Or, that LuLaRoe set their aim to consumers’ wants and needs, stating that their company is the answer to feeling fulfilled. Now, this is a prominent strategy for nearly all business types because need-fulfillment is what is required for all consumers to see in a product. Even if that need is superficial, the consumer will require this information in order to see themselves with/in it. A null hypothesis in this sense would be that LuLaRoe is not doing anything differently or uniquely than other companies to promote their brand and company.

The target audience that LuLaRoe’s products (leggings, dresses, etc) strived for was women. More specifically, women who are sociable moms, who want to be comfortable with their bodies, and who want to join a world of positivity and empowerment (Suddath, 2018). The clothes were incredibly soft, modest, and well designed, for women who wanted to look respectable and still feel attractive (Young, K., Zazzi, S., & Blevins, R., 2018). The LuLaRoe company started off as something that was incredibly loving, bubbly, and profitable and then ended as a sour, painful, debt-causing business, in all of the eyes of the people that touched it.

The reason why the company LuLaRoe was chosen for this research is because of its booming success in such a saturated market (clothing for women). Exactly how LuLaRoe was able to grow from the ground up? Making over $2.3 billion in sales between 2013 and 2017, LuLaRoe has made quite the name for itself (Peterson, 2018). This amount of sales volume in this time frame is incredibly large, which makes LuLaRoe appear to be an ideal example for advertisers and public relations strategists to look to in the future.

• How did LuLaRoe begin and become such a large brand in a saturated market?
• What were LuLaRoe’s advertising and public relations (Ad/PR) methods used to gain such a speedy and massive following?
• Are the methods practical/ viable for upstanding companies? 
• Or, were they backed by pyramid scheme-type techniques alone? Focusing more on recruiting retailers in its Ad/PR work than selling products.

Hypotheses:

• LuLaRoe was directly aimed at their target audience with psychological advertising.
• LuLaRoe set their aim to consumers’ wants and needs, stating that their company is the answer to feeling fulfilled.

Null Hypothesis:

• LuLaRoe is not doing anything different/ unique in comparision to other companies in order to promote their brand and company.

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When attempting to do research to answer the questions for this analysis, it was challenging to find the Ad/PR methods that LuLaRoe put into place that was directly related to their products. This is where the possible problem could lie – that LuLaRoe strategized solely as a pyramid scheme would and therefore would not be methods repeatable by more wholesome businesses. Luckily, behind the mask of LuLaRoe’s bad press, there were some discernible Ad/PR strategies to be analyzed.

How did LuLaRoe Start?

The company LuLaRoe is not a typical clothing retailer, in that, it does not act as a traditional product-selling business would. One cannot go online to LuLaRoe.com and order their clothes, additionally, one cannot walk into a LuLaRoe store and try on leggings. The latter does not even exist. What LuLaRoe does do is work on a consultant-basis where individual contractors buy at a “50% suggested retail price” and then sell to make a profit (Kestenbaum, 2017). This, of course, begs the question, how does this type of company start? And this is where many women have become inspired to follow the LuLaRoe life.

Founder and president, DeAnne Stidham, in a LuLaRoe brand Youtube video (also found on the LuLaRoe website under the “Our Story” page) described a day at a market where she met a man selling girls’ dresses at $10 each and how this changed her entire life (2019). Stidham, the night of meeting the man, thought to herself that he needed more help and wanted to be the person to do it; so she called him asking if he would be interested in having a selling-party at her house (2019). After the dress man accepted Stidham’s invitation to sell to her friends, and after the overwhelming success of the party, Stidham found her calling: “dress parties” (2019). Luckily, the dress man did not enjoy the party and gave Stidham all of the profit from that night, selling 300 dresses; he told her to start her own business with all the parties she wanted with that money and so Stidham did “dress parties” for 27 more years (2019).

This narrative may be an overdramatization of the real-life events, but none the less DeAnne Stidham has painted herself to be a billionaire that grew from the ground up. Even if that portrait includes Stidham’s niece, who worked in the film and costume industry, helping her land a retail producer/manufacturer (2019). This was when LuLaRoe became closer to the brand we know today, Stidham utilized her niece’s expertise and her past “dress party” network to get the show on the road (2019).  The part of the LuLaRoe backstory that is more commonly heard/ told is that Stidham made a maxi skirt for her daughter, who then posted it onto social media (Instagram) and then received many women wanting to buy one for themselves (2019). While this part of the LuLaRoe history was gone over in the video, most people word this single instance as being the entirety of the LuLaRoe start-up, and a simple maxi skirt going viral establishing the overall brand is what convinced many women into becoming a part of that empowering story (Suddath, 2018).

What were LuLaRoe’s advertising and public relations (Ad/PR) methods?

Comfort. In the podcast, “Sounds like MLM but ok,” hosts Katie Young and Sasha Zazzi interviewed Roberta Blevins, a former LuLaRoe consultant, and go into great detail about Blevins’ time with the company (2018).  Blevins began by saying that she first heard about LuLaRoe from a friend who was selling the product, she said that all of the clothes were perfect for moms who wanted to feel comfortable in their own skin, no matter what shape or size (2018). The podcasts hosts went onto say that in their research, friends throw buying-parties that are similar to mini-boutiques where “whatever you buy today, you take home today” with no shipping cost or delivery time (2018). Now, one could expect that the vast majority of these buying-parties quickly turned into recruitment-parties for the LuLaRoe Company because people would want to join in on the fun, profit, social pleasantries, and cute clothes.

In the second part of the two-part LuLaRoe series on “Sounds like MLM but ok,” Young and Zazzi interviewed another former consultant, Courtney Harwood, who fell into the company in nearly the same exact process as Blevins (2018). Harwood explained just how good she felt when wearing her first outfit of LuLaRoe clothes, how usually nothing fits her comfortably and it was like a match made in heaven, she felt confident and beautiful (2018). Harwood also explained how this was her favorite part of the LuLaRoe brand, that the brand itself promotes body positivity and empowerment (2018). Both Harwood and Blevins saw the potential the company had as a career because they viewed LuLaRoe as something that was empowering and saw joining the company as the next organic step. 

This love and excitement toward the brand are even echoed on small mom blogs online, of course always precursing reasons why LuLaRoe is not what it used to be. Blogger Laurie Bennett wrote about how she saw past an “outrageous” amount of $36 for a T-shirt after realizing it fit her plus-size body shape perfectly; bought all of them and then bought into the company (2017). Bennett continued by saying she justified these purchases by making herself feel better – she believed she was paying extra for USA-made clothing, moreover because she had a hard time finding clothes to fit comfortably in the first place (2017). This is a story most shoppers have either heard of or have had experiences with – finding clothes that fit (women’s complicatedly curvy bodies) is very tricky and so when it happens there is a natural reaction to celebrate and to promote it.

Exclusivity. What the LuLaRoe brand became known for and advertised are “buttery soft” leggings that come in an intense range of colors, patterns, and styles, more importantly, in limited editions that have been called “unicorns” (Truth in Advertising, 2019). So while the softness and comfort of the clothes were one of LuLaRoe’s selling points, the other major part of LuLaRoe’s Ad/PR strategy was this sense of exclusivity. LuLaRoe consultants have also been known to highly employ Facebook to perform their business practices. This includes things that most modern companies do today, such as making a Facebook page, group, or even a profile. What is unique about what LuLaRoe retailers do is that they make live-stream sales, which are live broadcasts to Facebook friends/followers, or, the newest form of direct sales (Turner, 2016). Similarly to Stidham’s original “dress parties,” the LuLaRoe consultants reach out to their friends and friends’ friends in order to share, sell, and make a profit.

Roberta Blevins, from the podcast interview, voiced that LuLaRoe’s products are almost completely randomized, there are no catalogs, there is whatever is available that day, making every consultant’s “shop” different (2018). Imagine, thousands of small, online boutiques that all have the same LuLaRoe “buttery soft” clothes but each one is completely different from one another. In addition to this, Blevins explained that her “co-workers” and the whole LuLaRoe family also wore the product lovingly; having to decide whether or not the wanted to keep or sell new incoming clothes and eventually creating a collection (2019). And example Blevins gave was women who would post photos of their legging collection and ask their following to show them theirs (2019). So alongside having the most “unicorn” leggings, they also wanted to have the most amount of “unicorns,” incentivized specifically by social media posts like “show me your collection!” Promoting the act of having the most exclusive collection.

There are two sides to this exclusivity, but potentially only one that is particular to how LuLaRoe ran its business practices. Despite the fact that “unicorns” were all the rage in LuLaRoe’s Ad/PR marketing, the consultants/retailers were unfortunately not given the choice of the matter. For those who do decide to join LuLaRoe as a consultant, they are not then able to pick and choose what they want to have in their own shop because of this lack of a catalog to look through. Starter kits come with a blanket price and as a blanket package of various patterns, colors, and even sizes (Gunsberg, 2019). This makes knowing your store’s “girl,” a term meaning a store’s overall fashion style, incredibly difficult and the only true selling point is the randomized “unicorn” patterns, and then simply hoping that they are fashionable.

Are LuLaRoe’s methods practical/ viable for upstanding companies?

Weaknesses. After conducting and collecting this research and analyzing the business practices of LuLaRoe, a large question comes to mind: was LuLaRoe’s success entirely on behalf of the consultants who were hurt by the pyramid scheme scandal? Just as all Ponzi schemes run, the consultants bought the products and then made a profit from both selling and recruiting others to buy into LuLaRoe. And the recruiting side of the company was painted as being easy as the experiences laid out by former retailers showed: the clothes were comfortable, empowering, exclusive and women wanted them.

When looking at LuLaRoe as a successful business that had thriving Ad/PR campaigns, it must be noted that psychological aspects of comfort, empowerment, exclusivity, and forming collections. The characteristics of a collectivist cult start to form. There are three major aspects of a cult that, Harvard graduate, Psychiatrist Robert Lifton discerned in his paper “Cult Formation,” which are: a “charismatic leader,” “coercive persuasion or thought reform,” and “exploitation of group members” (1991). In taking a look at Courtney Harwood’s and Roberta Blevins’ podcast interviews again, it becomes clear that LuLaRoe did in fact use similar methods to that of effective cults and cult leaders.

• Charismatic leader
  • Harwood felt that she “couldn’t say no to DeAnne” (LuLaRoe president and co-founder), always wanted her overall approval, stating that this was a profound feeling that many other consultants she has talked to had also felt (2018). 
• Persuasion/ thought reform
  • Blevins shared that every LuLaRoe consultant celebrated and acknowledged with highly positive remarks when other members performed well or reached a higher milestone/ position within the company’s hierarchy (2018). 
  • When Blevins first started to have problems with the products, all of her inquiring posts onto Facebook groups were quickly deleted after being seen by group admins, who then would message Blevins saying that she cannot share negative information or possible disinformation (2018). 
  • Similarly, Harwood said that past LuLaRoe conferences have all been like one big happy-go-lucky family gathering, with smiles and happy colors spread about like a children’s party (2018).   
• Exploitation of members/ consultants
  • Both Harwood and Blevins said that because of their going into LuLaRoe, they have been left with old, stored clothing and less money than before the experience; but both also reflected on women they know who have been hurt worse with mountains of debt (2018). 
  • Harwood expressly spoke of the money she was owed but more importantly artesian “cow rugs” that she and a small group of women paid for and were promised the delivery of during a company trip to Guatemale (2018). Harwood also went onto say that DeAnne Stidham posts into social media photos of her and the rug that Harwood picked out and that she could tell from the cow’s spots (2018).
  • The PR aspect of these company trips and conferences is that they act as an incentive to join the women-empowering LuLaRoe family. On the contrary, Harwood explained that these quickly became heteronormative couples retreats that focused more on recruiting husbands than the company’s original message of becoming a bread-winning woman that is comfortable in her own body, and finding out that she and others could not go if their husbands could not too (2018).

Strengths. The strengths of LuLaRoe’s Ad/PR methods are potentially practical/ viable for upstanding companies (non-pyramid schemes) when one takes out all of the aspects of it being a pyramid scheme. But can one take out those aspects, of exploitation at least, and still be able to reach a similar amount of success and be an upstanding company? When dealing with psychological issues such as a need to fulfill the wants of a leader, the only practical wholesome way to do this would be for the leader’s wants to be that of a wholesome and ethical company. Which is not the case for LuLaRoe. This would require a company not to have a goal of making money, or for LuLaRoe, not to have a goal of recruiting women through empowering tactics to then be the first-tier customer of the products.

The overarching achievable strengths for an upstanding company to conduct goes as follows:

• Produce and advertise comfortable clothes 
  • Clothes for all body shapes, sizes, and ages and showing that in advertisements 
    • Both mentally and physically comfortable: feel comfortable but also still look fashionable and sexy
• Make customers feel empowered
  • By making them feel comfortable in their own skin
  • By making them feel as if they could accomplish any goal

•  Create a sense exclusivity 
  • By (only) having limited edition product lines
  • Keeping products at a higher price point
• Create a want for quantity/ collections
  • Advertise people owning a great deal of product 
  • Have a large number of varying products, such as with patterns and styles 
    • Have exclusive/ limited product lines

Looking back at the hypotheses of this research paper, proposing that LuLaRoe could have potentially directly aimed at their target audience with psychological advertising by stating that their company is the answer to fulfilling wants and needs. It was found that LuLaRoe did use tactics that made them appear to be an outstanding company that believed in body positivity. When in reality, this was entirely an Ad/PR tactic that made them popular and trendy with women who are older, heavier-set, and generally moms that cannot afford a $36 T-shirt at first sight.

In Conclusion

Fortunately, in the light of LuLaRoe’s scandal, there is at least some good to be taken from this situation. When considering the strengths found in the research, one can recollect other popular brands that use similar tactics. For instance, gym clothes and sportswear has become increasingly predominant in the fashion world because it is so comfortable. Brands that make people feel good about themselves and comfortable with their bodies are also often successful because they open themselves up to a large target audience by making plus-size clothes. And one specific example that is popular today that everyone in the world is talking about: Supreme. Supreme is a modern brand that is constantly being sold out and then resold again by sellers at a higher price point, making a T-shirt that costs $44 originally up to $200 in resale (Mikhaylov, 2016). The phenomenon of this limited/exclusive act then turns the product lines into collectible products that people will want in quantity.

Follow-up research on this phenomenon and a brand becoming similar to a cult would perhaps be very advantageous for Ad/PR specialists in the future for making companies/ brands larger and popular. Even the language used today appropriates this strategy, when companies/ brands refer to their consumers as a “following” on social media, it is becoming reinforced that brands are the charismatic leaders of the modern age. And then the act of brand partiality becomes brand worship, or “thought reform,” where people have emotive thoughts toward brands that are for the name of the brand and not the acts of the people behind the brand. All the while, companies are exploiting consumers by making simple products with gruesome prices – placing logos on the simple item and making them collectible/ exclusive/ potentially profitable from the resale. 

While these methods may be how LuLaRoe’s founders became billionaires in a few short years, the question must be asked: is LuLaRoe doing anything differently/ uniquely than other companies to promote their brand? If the null hypothesis and the hypotheses are both true, and the only difference between LuLaRoe and other popular brands is its pyramid scheme business model, then could one conclude that in order to become a large company it is necessary to act as a cult would? And is that something an upstanding, wholesome company is capable of doing? 

Within the world of advertising and public relations (Ad/PR), it is crucial to note how the world is evolving and moving around us. But within the world of ethics and moral reasoning, using psychological means of wants and needs to reach an end goal of making money ought to be thought of very carefully. It is important that companies do not exploit consumers with high prices because, to a certain cult-like extent, the consumers cannot help themselves but to adhere to their faith in brands. In summary, there is good to be taken from LuLaRoe’s evil but the strategies and tactics to prove so are at the cost of every company’s leader’s moral judgment.

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References

Bennett, L. (2017, May 4). Why Not LuLa? 7 Reasons I Quit Selling LuLaRoe. Retrieved October 25, 2019, from https://slapdashmom.com/reasons-quit-selling-lularoe/. 

Gunsberg, K. (2019, August 6). Uh Oh, Is LuLaroe Going out of Business? Retrieved October 25, 2019, from https://toughnickel.com/self-employment/Uh-Oh-Is-LulaRoe-Going-Out-of-Business. 

Lifton, R. J. (1981). Cult Formation. The Harvard Mental Health Letter, 7. Retrieved from http://www.csj.org/studyindex/studycult/study_lifton2.htm 

LuLaRoe. (2019). Our Story. Retrieved October 25, 2019, from https://www.lularoe.com/our-story. 

Kestenbaum, R. (2017, October 20). This Retailer Went From Zero To $2 Billion In Four Years. Retrieved October 25, 2019, from https://www.forbes.com/sites/richardkestenbaum/2017/10/19/this-retailer-went-from-zero-to-2-billion-in-four-years/#263bff125fa3. 

Mikhaylov, A. (2016, March 15). Why Is Supreme Always Sold Out? Retrieved October 25, 2019, from https://medium.com/@antonmikhaylov/why-is-supreme-always-sold-out-17bdf782a47. 

Peterson, H. (2018, November 20). LuLaRoe is facing mounting debt, layoffs, and an exodus of top sellers and sources say the $2.3 billion legging empire could be imploding. Retrieved October 25, 2019, from https://www.businessinsider.com/lularoe-legging-empire-mounting-debt-top-sellers-flee-2018-11. 

Suddath, C. (2018, April 27). Thousands of Women Say LuLaRoe’s Legging Empire Is a Scam. Retrieved October 3, 2019, from https://www.bloomberg.com/news/features/2018-04-27/thousands-of-women-say-lularoe-s-legging-empire-is-a-scam. 

Truth in Advertising. (2019, November 2). What You Should Know about LuLaRoe. Retrieved October 25, 2019, from https://www.truthinadvertising.org/what-you-should-know-about-lularoe/. 

Turner, M. L. (2016, October 31). LuLaRoe’s Secret To Becoming A Direct Sales Powerhouse? Facebook Live. Retrieved October 25, 2019, from https://www.forbes.com/sites/marciaturner/2016/10/18/lularoes-secret-to-becoming-a-direct-sales-powerhouse-facebook-live/#7737db5336df. 

Young, K., Zazzi, S., & Blevins, R. (2018, May 7). The Rise and Fall of Lularoe: Part One. Sounds Like MLM But OK. Retrieved September 29, 2019, from https://open.spotify.com/episode/3kI95scBBjdwltB8bGrCJw.

Young, K, Zazzi, S, & Harwood, C. (2018, May). The Rise and Fall of Lularoe: Part Two. Sounds Like MLM But OK. Retrieved from https://open.spotify.com/episode/7gVwMRwEflXxrr0LmKeW4f