Lululemon Athletica (LULU) is bringing its home-fitness platform Mirror to Canada, rolling out the interactive technology to 40 locations on Thursday and making it available for purchase for $1,895.
Canada is the first market outside of the United States where the retailer is launching Mirror, the at-home fitness technology Lululemon acquired last June. Mirror will be rolled out at 40 locations across the country to start, allowing customers to test out the technology in-store, and will be available for purchase beginning on Nov. 22.
Mirror, a high-tech mirror that doubles as an at-home fitness platform with live and on-demand classes, will cost $1,895 plus a monthly $49 subscription.
“Our guests are going to have the chance to demo Mirror, talk to our Mirror leads and really understand and learn why Mirror is the right option for their at-home fitness solution,” Celeste Burgoyne, Lululemon’s president of global guest innovation, said in an interview with Yahoo Finance Canada.
“The opportunity for guests to experience it firsthand is really key in their ability to consider and purchase a Mirror… we know that living an active lifestyle is more important than ever and that guests want to be able to see all the options that are out there.”
Lululemon acquired Mirror for $500 million last June after making an initial investment in the company in 2019. Lululemon CEO Calvin McDonald called the acquisition an opportunity to “enhance our digital and interactive capabilities and deepen our roots in the sweatlife.”
“We’re playing the long game and have much to unlock in the coming years,” McDonald told analysts during the company’s most recent quarterly conference call.
A competitive market
The COVID-19 pandemic spurred an explosion of demand in the at-home fitness market, propelling newfound popularity in brands such as Peloton (PTON), Tonal and Mirror. The market has become increasingly competitive through the pandemic, particularly as many consumers choose to return to in-person gyms and classes. Peloton recently slashed the price of its bike, reducing the cost of its basic model from $2,495 to $1,895 – the same price of Lululemon’s Mirror.
A McKinsey report released earlier this year found that with more consumers returning to traditional fitness options as economies reopened, the market for at-home fitness will be more competitive and the growth in new users for at-home fitness may slow.
“This is a sector that has attracted many entrepreneurs and investors, and the number of good and emerging solutions is rapidly expanding,” the report said.
“The COVID-19 pandemic has scrambled fitness consumers’ habits, and the next phase in recovery is a prime opportunity for industry participants to reset. Selecting a target consumer segment and updating value propositions to better align with their wants and needs and responding to industry developments will help industry participants survive and thrive in the new normal.”
Burgoyne says the technology itself, as well as the community aspect of it, will help differentiate Mirror from some of its competitors.
“One of the things that really differentiates Mirror is that it truly blends seamlessly into your home, and yet it’s just a few steps away, so ease and accessibility of it is huge and really beneficial,” Burgoyne said.
“It also does a great job of combining personalized, in-home fitness with a community atmosphere to ensure that you feel engaged and connected.”
McDonald has also touted Mirror as a way to drive community and connect with customers through multiple channels.
Lululemon faces challenge ahead
But the acquisition of Mirror has not come without its challenges. McDonald said on the company’s most recent conference call that increasing costs of digital marketing for Mirror – which he also noted has "low awareness right now" – has put pressure on customer acquisition costs. Recent reports said Mirror’s founder and CEO Brynn Putnam stepped down as CEO of the brand, just over a year after Lululemon acquired the company.
Retail analyst Bruce Winder said a key challenge for Lululemon will be selling the value of the Mirror product to consumers, given the highly competitive landscape of the at-home fitness industry as well as Mirror’s offering, which doesn’t include equipment outside of the mirror.
“They do have a very strong community, but the challenge will be getting them to see the benefit of this and take a chance on it,” he said.
“The proof will be in the pudding with the technology and whether people really enjoy it, whether people see value in it, whether it gives them what they want in terms of community… It’s a big leap.”
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.