Canada is about to get more MIRRORs.
In a LinkedIn post yesterday, lululemon CEO Calvin McDonald shared a Globe and Mail article announcing some news about MIRROR, along with the following summary blurb:
"Today, lululemon announces the expansion of MIRROR into Canada. Our guests can now experience the Mirror in nearly 40 lululemon stores across the country, and purchase in-store and online beginning November 22. We are so excited about the opportunity for MIRROR to extend our powerful, inclusive digital sweatlife offerings and community to new and existing guests."
But... what's a MIRROR, you ask?
It's the product of a company by the same name that lululemon acquired in July 2020 for $500 million USD. The product, when turned off, acts as a full-length basic mirror. But when MIRROR is activated, "users are able to pick from weekly live classes, on-demand workouts, and one-on-one personal training."
That all sounds amazing... but it comes with a price hefty cost.
In Canada, the MIRROR device itself will sell for $1,895, which is the same as a base-model Peloton bike. And, like Peloton, MIRROR users will need to buy a monthly subscription to access those fitness classes, at a cost of $49 per month.
So if you're in the market for some new technologically advanced, connected, home-fitness equipment, how do you decide which device you should buy? The well-known Peloton, or the unknown MIRROR?
That's the $686 million question.*
And if lululemon wants to seriously compete with this product -- and benefit from the monthly recurring revenue that it will contribute to the company's bottom line -- it needs to be able to answer it.
Specifically, lululemon needs to figure out how to differentiate itself in what has very quickly become a very crowded home fitness market.
The good news is that the company has the existing brand equity and assets needed to win... if they're smart about how they use them.
Here's an example: did you know that if you're a "leader in sweat", Lululemon has a program where you can apply for discounts on the company's apparel products?
lulu, you need to leverage those "sweat leaders"!
Mostly because right now, a good percentage of them are likely riding Pelotons.
So bring them over to Team MIRROR! Give them a hefty discount on the MIRROR and/or eliminate their monthly fees: these people are influencers, so enable and encourage them to influence.
Also, since lululemon is an apparel company first and foremost, why not extend the Sweat Leader discounts to customers who become MIRROR subscribers? That would be one way to differentiate from Peloton, and surely a customer who buys a $1,900 MIRROR and then spends an additional $600 on a digital fitness subscription every year deserves 20% off their lululemon purchases, right?
Even better, ask customers who order the product for their sizing, then send them a custom, unique, MIRROR/lululemon co-branded workout outfit as a "surprise and delight". Ensure the outfit can't be bought in stores... these would only be available to those customers who join the MIRROR tribe.
Let's be clear: having MIRRORs in every Lululemon store will absolutely help drive awareness for the offering.
But it won't be enough.
The ideas I suggested here won't be enough on their own either; they're just a start.
But the company has the existing brand equity and assets needed to win... if they're smart about how they use them.
Let's see what lululemon decides to do to make MIRROR shine.
* If you're wondering how I got $686 million, earlier this year PR Newswire reported that the connected gym equipment market "was valued at US$ 510.5 million in 2020 and is projected to reach US$ 3,472.7 million by 2028; it is expected to grow at a CAGR of 7.03% during 2020-2028." Take $510.5 million and multiply it by 7.03%, and you get $546.3 million.... but that's in US dollars, and most of the other numbers I quoted in this post were in Canadian figures. So when you apply today's US to CDN exchange rate, you get $686 million CDN.
And if you're thinking this was a LOT of math for just one bad joke, you'd be correct.