Updated: Jul 2
Lululemon Athletica Inc., the leader in yoga apparel beloved by athletes and thrived as athleisure wear, a fashion style hybrid of fitness clothing and lounge attire, has decided to invest in technology, making their first acquisition with the $500 Million purchase of Mirror, creators of a home fitness mirror technology for in-home workouts.
Lululemon had made a small investment in Mirror just last year as the beginning of their partnership, while fitness has continued move home as people around the world are staying-in-place due to the COVID19 pandemic. Since the shutdowns which came in March 2020, sales of Peloton bikes, FightCamp punching bags, and Mirror have risen substantially.
Naturally health and fitness is engrained into Lululemon's brand. For years Lululemon has held in store-yoga classes, running groups, and fitness programs to boost overall customer experience. The purchase of Mirror, bring this up a level as this is the beginning of Lululemon becoming a technology company and weave into their overall product strategy.
Product Strategy for Lululemon
So why did Lululemon purchase Mirror? How does it make sense for the Lululemon brand and company moving forward?
Below is our analysis of the product strategy behind the investment.
Mirror sells for $1495, providing a one time lift in sales to Lululemon, though the larger opportunity for for the yoga clothing brand is the $39 per month subscription for monthly subscription. SaaS (Software as a Service) products are all the rage in Silicon Valley and desired by Venture Capitalist as it creates a method of predictable revenue which in theory should increase over time.
In addition to the monthly revenue, as Mirror is connected to the internet and is an IoT product, provides Lululemon to display offers, promotion, or present other services.
Mirror Founder and CEO, Brynn Putnam, a former professional ballerina was quoted just last year in Fast Company saying "we're building the next iPhone." Putnam had been focused o building the attachment to its fitness mirror just as Apple, and Amazon with Alexa or Google with Google Home. Through the Mirror acquisition, Lululemon has officially entered your home, and as Amazon and Google have shown, this is powerful for a branded retailer for continued engagement with the broader brand. IoT has become integral to consumers every day lives especially during COVID19 and also is the driver for data analysis by Lululemon.
While Lululemon has one of the top omni-channel consumer experiences with their retail locations and eCommerce, there is only so much you can learn from your customer as a result of loyalty and purchasing data. Mirror is an elegant full-length mirror with the ability to record heart rate, monitor calories burned, compare time and intensity, all while taking account of any injuries or fitness goals.
Analysis of this rich consumer data, provides Lululemon with the ability to operate similarly to Amazon and Google, by serving relevant information, advertisements, and offers to users, while building data sets which provide insights into investing into new markets, products, or even simply its clothing.
Broaden Customer Set & Boost Brand Engagement
As Lululemon has a highly targeted customer based on being fashion brand, Mirror can be agnostic to fashion choices, meaning all users may not be into yoga, providing the opportunity for new customers to familiarize themselves with the clothing brand and for Lululemon to potentially branch out to other fitness styles. When viewing Mirror.co, you can see the actors and models used clothing which looks as in the style of Lululemon. This method will likely become more pronounced with instructors in the mirror and models on the site wearing Lululemon gear with the logo visible, boosting brand recognition and engagement.
Content is King and owning your own distribution channels is the kingdom. Companies having their own IoT product in your home allows them more simple distribution of their content and ability to get messaging across. Lululemon will be able to add content pieces whether as shows, podcast, exercise, cooking tips, etc. all through Mirror seamlessly as a "new iPhone" instead of relying on existing content consumption means such as phone or computer. Look for Lululemon to create broader content strategies.
Brands will become Technology Companies
Retailers and brands have been late to technology since the mid-90s when eCommerce was first introduced. At the time, big retailers did not believe the eCommerce let alone the internet was here to stay, which led to the rise of Amazon, while big box retailers like Sears, Boarders, K-Mart ended up going bankrupt.
The legacy brand and retailers who have had lasting power have been those who invested in technology for commerce such as REI and Nordstrom who have large tech organizations and brands like Nike and even Lululemon who have leveraged their networks for broader commerce adoption of their products.
Through the purchase of Mirror, Lululemon has taken the next step from advanced commerce to full blown tech investment. This wont be the first technology move by Lululemon and we will likely soon see innovation coming from with in.
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