As a brand that is about much more than the products it sells, Lululemon sells itself as a lifestyle. And their latest acquisition of Mirror is an extension of that.
Lululemon has made a name for itself as a top athleisure brand. Now it’s seeking to dominate in the home fitness arena as well. What does this mean for the industry? We’ll explore that, in context of:
- Lululemon is coming for Peloton. What does this mean for the rest of the fitness industry?
- Lululemon is setting the bar when it comes to OmniChannel experiences. How can your brand follow suit?
- Is a merger or acquisition something to consider right now?
And here are some fitness industry stats to get your blood pumping:
- The fitness industry is valued at over $82b USD
- 174m people are part of a health and fitness club worldwide
- The health industry is growing at 8.7% annually
Mirror Combo is LuluLemon in Peloton’s Eye
The acquisition of Mirror was an extremely smart business strategy for Lululemon. While home gyms and workouts have been on the rise for a while now, they have been more popular than ever due to COVID-19 shutting down gyms for nearly four months.
Comparing Mirror and Peloton, we can see Mirror’s edge when it comes to pricing and options.
- Retails at approx. $1,495.00
- Membership cost of $39/month
- More class options
- Retails at approx $2,245.00
- Membership cost of $39/month
- Limited to spin/riding classes
And the combo with Lululemon is crucial, as Lululemon is dominating Peloton when it comes to share of voice.
This isn’t only happening in the media, but on social media too. Looking at the graph below, Lululemon had the highest share of voice in the media (published count) and on social media (social engagement), while Peloton ranked pretty low in both areas.
Lululemon also had approximately 50% more social media mentions than Peloton in the last month, which means people are listening. And more importantly, they are talking – and pretty passionately too:
And Lululemon has one of the highest sentiment scores too when compared against other companies. They have have significant, positive share of voice.
But Peloton isn’t the only company that has to watch out. Lululemon poses a risk to the fitness industry as whole.
And the risk isn’t just to home workout brands like Peloton. Luxury gyms, like Equinox, are at risk as well. As market analyst Kate Fitzsimmons said, “with people realizing they can work out from home, why would you pay the $200/month+ for an Equinox membership?”
When looking at a general view of patents filed over the last few years having to do with “fitness,” we can see that majority of them fall into the fitness equipment category, shining a light on the growing trend of at home workouts.
And the number of home fitness companies is growing too, especially workouts focused on digital experiences.
So, what exactly does this mean for the future of fitness?
It’s no secret that maintaining a strong brand reputation requires multiple touch points. And that’s exactly what Lululemon is doing with this acquisition. This business deal is the perfect omnichannel experience in the making.
Lululemon knows that its brand is much more than the clothes that they sell. As mentioned, it’s a lifestyle. And in an age of personalization, that sort of image is consumer gold. This acquisition of Mirror is an extension of this thought process, and the timing could not be more perfect.
With social distancing guidelines in effect right now, and for the forseeable future, Lululemon is investing in the likelihood of a consumers seeking a fully digital experience for years to come.
If your brand is in the process of acquiring another business, or if you’re wondering how to follow Lululemon’s lead and create an omnichannel experience that’s built to last, consider doing the following:
- Set up emerging market trend searches to stay a step ahead of competitors in your industry
- Ensure social listening happens every day, so you can capture, analyze and be part of conversations happening about your brand, and your industry, in real time
- Monitor brand sentiment to identify unmet needs and opportunities
- Listen to what consumers are saying – and keep track of who and where. This will help you get your messaging out to your consumers wherever they are.
Because it’s not just the fitness industry that’s ripe for disruption on many fronts. Innovative M&A strategies about with the right tool on your side . . .
Innovative M&A Strategies Abound
Just Eat Takeaway recently closed a $7.3B merger deal with Grubhub. This came after Uber wasn’t able to overcome antitrust concerns around acquiring Grubhub itself. And this firmly positions Just Eat Takeaway as a force to be reckoned with in the food delivery category, bolstering Grubhub’s standing against its former almost acquirer.
And there will be more M&A deals like this as we enter Q3 still solidly affected by the trials and tribulations of COVID-19. Many industries are trying to figure out how they will recover from the blows that keep coming. Many companies are going bankrupt (up 26% from last year), while others are turning to M&A as a last-ditch effort before sinking. For those with healthy balance sheets, as our report on mergers and acquisitions indicates, the sentiment is trending quite positively. Any why wouldn’t it, as it’s really a buyers’ market:
Smart brands are watching these deals (and opportunities for deals) closely, as it can entirely shift the landscape in a given space – much like the Lululemon/Mirror deal is bound to do.
Whether a brand acquires another, gets acquired or merges, the resulting shift is felt by consumer and competitor alike. Market intelligence tools are helping businesses perform due diligence to ensure that the timing – and need – makes sense before making a move. And the results are pretty amazing.
If you’re ready to learn more about how market intelligence and social listening can help you better understand what your next move could/should be, reach out for a demo. We love showing businesses how to identify white space and track emerging trends. It’s crazy not to right now!