June 30, 2020

empowering you with insights and information from the edge of today’s headlines

Business

Lululemon, the athletic apparel company, announced that it is buying Mirror, the connected fitness platform, for $500M. Mirror is a subscription based service which plays on-demand fitness classes through a wall-mounted “mirror”.

Most gyms are closed for the foreseeable future, and for good reason (see the quarantine of 200 people following an outbreak at a Virginia Planet Fitness). Demand for connected fitness platforms (such as Peloton and and every trainer’s Instagram story) have been skyrocketing.

By purchasing Mirror, Lululemon gets into the homes of its consumers. Not only will Lululemon be able to expand its e-commerce offerings to include the on-demand fitness subscriptions, but it could potentially leverage the AR capabilities of the device. Can the Mirror be transformed as an at-home, virtual try-on room? Will Lululemon have the data to know when your body is changing and offer to sell you different gear? Will clothing be added to its subscriptions?

Seems like an attractive addition for Lululemon, especially with their abundance of retail stores and the unexpected $790M quarterly loss from Nike reported last week. Expect to see more digital transformations from retail.

What we can’t wait to watch: The Tour de France will be a virtual event this year. The organizers have partnered up with Zwift, a multi-player platform that allows you to “train with your community.”  The professional riders (and the public) will be riding online for the next few weekends, as the annual event was postponed until August. Kind of takes the fun out of the clashes in the peloton and the crazy crowds, but we’ll happily sit on our couch and watch others sweat.

What we are watching: The on-demand, food delivery market is heating up again. Uber has been attempting to purchase Postmates for over a year now, and the deal seems to be on the verge of closing. Uber had been looking at both GrubHub and Postmates, while Postmates was playing the reluctant target.

Postmates is now considering an IPO or a $2.6B takeover. With the drop in Uber’s ride hailing business, and more restaurants shifting to take-out, we expect to see a continued rise in delivery and even ghost kitchens (delivery-only restaurants). Will be interesting to see if this acquisition brings in the regulators over antitrust concerns as well.

International

While the skirmishes on the China-India border have slowed down, the countries continue to remain hostile. The battles have now moved from the battlefront to cyberspace and the pocketbook.

Yesterday, India announced it will be banning 59 Chinese apps due to concerns over data collection and for national security purposes. Some of the apps have a huge presence in India — TikTok’s largest overseas market is India and Xiaomi is the top smartphone vendor in India. (27 of the 59 apps were among the top 1,000 Android apps in India.)

This is not India’s first problems with social media. WhatsApp and TikTok have been used to spread hate speech and increase religious bigotry, and some apps were banned prior to the country’s elections.

“Boycott China” has been trending in India following the death of Indian soldiers in the Himalayas earlier this month. The Indian government had also been amending its rules regarding foreign direct investment and suspending some of its trade. But this move shows that India is leveraging its huge consumer base to get at the heart of China’s economic growth.

Other countries, such as the US, have threatened to go after China’s economy by banning Bytedance (the owner of TikTok) or Huawei and ZTE’s 5G infrastructure. We’ll be curious to see if India’s population is more loyal to its apps or its government. Would you boycott Amazon and Netflix during a pandemic because of international hostility?

Go Deeper:

CNN

Technology

We had always been told never to leave something in our Amazon’s carts. The “save for later” function allowed Amazon’s algorithms to update the price (usually to the upside) of the items we were watching, so we’d worry about buying before it got too expensive.

But put algorithms, gamification and bored teenagers together, and we have yet another social justice movement flamed by gaming the system. This trick is called shopping cart abandonment. A set of internet warriors has been filling their carts with unwanted items from stores they don’t approve of, and then abandoning them before purchase, in the hopes of tormenting the retailers’ algorithms.

E-commerce retailers generally use shopping carts as a means to control inventory (they know what is selling best and what to purchase more of), pricing and trends. High abandonment can mean a poor user experience, bad data collection or a broken sales funnel, which may lead to a site redesign or other spending on marketing and logistics.

With WFH, we’ve all had a lot more time to browse online and potentially research our online purchases, but we’ve also had to think harder about spending our hard-earned cash. According to one study, shoppers have created 47% more shopping carts than before the pandemic.

As you might have guessed, one store that got trampled by TikTok: the Trump Campaign’s merchandise e-tailer. 🤷🏻‍♀️

Culture

Just in case you thought the local, nightly fireworks weren’t painful enough, Macy’s had the bright idea for a weeklong display of professional fireworks in NYC. Macy’s traditionally sponsors the July 4th show in NYC, but the planned event had been on hold due to the pandemic. Instead, Macy’s has decided to keep us wondering, and each night the fireworks will appear at a secret location, so that crowds won’t have time to gather.

To some, the legal fireworks are a celebration; to others, they are yet another nightly trigger. Plus, Macy’s continues to layoff its workers — why spend on fireworks instead?

— Lauren Eve Cantor

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