Google Acquires Popular Fitness Products Company, FitBit
On the latest episode of the E-Commerce Retail Briefing podcast:
Google just pushed further into a competitive wearables market with its recent acquisition of Fitbit. The $2 billion dollar deal is expected to close next year.
Lululemon is now an investor in technology startup, Mirror. Mirror, which sells a home fitness system that displays on a full-length mirror, announced they raised $34 million in new funding, bringing the startup’s total funding to almost $72 million since launching just over a year ago. According to a press release, Mirror plans to use its recent funding to expand into new areas and content verticals. For Lululemon, the investment in Mirror could signal what the retailer is planning next as the company continues to expand its offerings beyond its yoga-apparel origins. Lululemon acknowledged plans to expand its personal care line in September and revealed it was testing a paid membership program that goes beyond free shipping and membership-specific attire perks last year.
US-based sports retailer, Hibbett Sports, has partnered with Shipt to introduce same-day delivery service for its customers. The service is free for Hibbett Rewards VIP Members and available in Atlanta, Birmingham, Charlotte, and select Nashville areas. To use the service, customers can select the ‘deliver today’ option online before checkout. They can then track their order status in realtime through email and text alerts. The company’s digital commerce senior vice president said, “Today’s consumers are demanding faster and faster delivery, so we’re leveraging our digital capabilities and partnering with Shipt, to provide seamless and lightning-quick turnaround on the items they want right away."
With net losses growing, Wayfair is focusing on warehouse utilization. The company opened what the CEO described as a U.S. sized warehouse in the U.K. in the 3rd quarter, bringing its global logistics network to a total of 15 million square feet. Wayfair’s CEO said the company will largely focus on increasing utilization of existing warehouse capacity in 2020 and will pick up its pace of square footage expansion in the U.S. by 2021. Also in the 3rd quarter, Wayfair opened a warehouse in California that has been instrumental in increasing the retailer’s one-day and two-day shipping potential while decreasing inbound shipping costs. Another will be opening in Jacksonville, Florida early next year. Though net losses are growing quarter by quarter, up nearly 80% year-over-year in Q3, the company’s CEO insists the Wayfair network is unmatched, and fast delivery means sales.
Google Acquires Fitbit for $2 Billion
Google reached a deal to buy wearable fitness products company Fitbit for $2 billion. The move intensifies the battle among technology giants to capture consumers through devices other than smartphones. For Google, the deal marks a further push into health.
It also puts Google into direct competition with other tech giant, Apple, which said the rising sales of wearables and related services were becoming a bigger driver of its business. Apple in many ways is a model for what Google hopes to accomplish. While the Apple Watch was initially a disappointment, sales have picked up and the company’s AirPods were an instant hit. The company said that sales in its wearable business have soared 54% in the latest quarter.
Fitbit says it has sold more than 100 million devices worldwide since its founding and has more than 28 million active users. In a statement, co-founder of the company, James Park, said, “Google is an ideal partner to advance our mission. With Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone." The deal is expected to close next year.