What’s Lululemon going to do with their acquisition of Mirror?

By Zhenni Liu

Just when we thought retailers were shrinking away and hanging onto cash reserves for survival, Lululemon shocked the industry this week by announcing a landmark acquisition of a home fitness equipment startup, Mirror. Why?

Having worked with Calvin McDonald at Sephora before he became CEO of Lululemon, I would assume this acquisition is a further reflection of his vision and strategy for experiential retail. As Calvin said:

“In 2019, we detailed our vision to be the experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect…The acquisition of MIRROR is an exciting opportunity to build upon that vision, enhance our digital and interactive capabilities, and deepen our roots in the sweatlife. We look forward to learning from and working with Brynn Putnam and the team at MIRROR to accelerate the growth of personalized in-home fitness.”

Calvin has always defined experiential retail strategy as building repeatable, memorable, and shareable experiences within a consumer shopping journey. The ability to integrate real life experiences with digital capabilities and to draw the best of both physical and digital not only makes experiential retail more powerful, it also draws on this concept of Omnichannel (which we all know drives incrementality in sales and loyalty). With Mirror, Lululemon adds new consumer journeys to build these experiences on. Some examples could include:

• Integrating Mirror within Lululemon’s experiential two-story store and enabling customers to take classes through Mirror (rather than purchasing and installing Mirror at home)
• Empowering Lululemon store associates to become Mirror ambassadors, or even elevating associates to become Mirror instructors
• Creating digital and physical communities around Mirror and Lululemon products: Lululemon already brings local communities together through run club, and highlighting fitness instructors to teach classes inside stores. It’s not hard to imagine a day when there are new communities created for the Mirror enthusiast who also love their Lululemon align pants
• Establishing a recurring billing relationship with customers: Lulu previously tested a loyalty program for customers. A monthly subscription to Mirror could easily include add-ons of clothing and workout gear. A recurring billing revenue model could also boost their multiples
• Mirror as a new distribution channel for purchasing Lulu gear on Mirror. Could we potentially see Mirror as a new social commerce channel? Or even Mirror branded Lulu gear?

At the end of the day, I think the merger of Lululemon and Mirror is actually a powerful brand-building play. The brand identity of both companies appeal to a very similar demographic, and together, they can create an even more targeted approach to building loyalty. The genesis of the Lululemon brand was established through yoga teachers. With Mirror, Lulu now has the opportunity to establish its leadership among emerging digital fitness instructors and influencers as well.

So where does that leave the rest of the industry?

Athleisure has been on the rise, and there’s more DTC brands than ever going after apparel. We’ve seen legacy brands, such as Nike, test experiential retail and build out digital fitness and lifestyle platforms to stay relevant and maintain market share. Retailers are finding it harder to drive customer loyalty, and in the future, I wouldn’t be surprised if other brands start exploring acquisitions that would enable them to create new touch points with customers along their shopping journey.