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👟 Lululemon’s looking far beyond yoga pants
April 29, 2022
PLUS: CBD is everywhere.
Are you a busy person, always looking to combine tasks and maximize efficiency? Then perhaps you’re the target audience for Tropicana Crunch, a new cereal made for orange juice, not milk. As Tropicana says, “It may not be for everyone, but it could be for you!”
In today’s email:
Beyond yoga pants: Is Lululemon the next Nike?
Chart: CBD usage is booming.
Codie’s Corner: How to cash in on rising egg prices.
Around the web: The history of comic books, no more junk mail, and more cool internet finds.
You may know Lululemon for its pricey joggers and yoga pants, but soon, you may know it for much more.
The athleisure giant plans to double sales to $12.5B by 2026, per The Wall Street Journal, and is making big moves to get there.
What’s the plan?
Lululemon has aggressive goals across 3 core areas:
Product: Double men’s sales and launch new categories
Experience: Double online sales and strengthen its community
Expansion: Quadruple international sales by growing in China, Europe, and APAC
The brand has already pushed into Nike’s territory, launching a women’s footwear line this year, and is making moves to rival Nike’s digital strategy:
In 2020, Lululemon acquired home fitness startup Mirror for $500m, arming itself with a competitor to Nike’s fitness offerings (e.g., Nike Training Club, Nike Run Club).
Last week, Lululemon announced a new membership that includes fitness classes and early product access, evoking Nike’s membership strategy.
The brand has also moved into sports, launching golf and tennis lines and debuting in its 1st Olympics as Team Canada’s official outfitter.
But Nike is big…
… like, really big. In 2021, Nike pulled in $44.5B in sales, ~2x Adidas, and ~7x Lululemon. Nike also moved into Lululemon’s territory in 2019, launching its own yoga collection.
Lululemon’s new efforts could pay off in the long run, but for the foreseeable future, Mirror and shoe sales are only expected to make up ~5% of revenue.
Lulu does have one big thing going for it — the massive rise of remote work. With Google searches for “casual work clothes” as high as ever, more people will be working in “athleisure chic” for years to come.
Going down: US GDP fell 1.4% YoY due to supply chain disruptions and a growing trade deficit (AKA importing more than exporting). Despite the drop, consumer and business spending rose, suggesting growth could resume quickly.
Curtain call: In what could be its final earnings call after being purchased by Elon Musk, Twitter missed revenue estimates but grew “monetizable daily active users” by ~16% YoY.
Drone, but cute: Snap launched a pocket-sized flying camera called Pixy, which will retail for ~$230.
Jackpot: A lucky Arizonian bought the winning ticket for Powerball’s $473.1m jackpot Wednesday. Winners can choose between annual payments over 30 years, or an immediate cash-out. Most pick the latter, equivalent to $283.3m after-tax in this case.
Media consolidation: G/O Media, owner of Gizmodo, Lifehacker, and Jezebel, acquired business news site Quartz. Quartz recently dropped its paywall, and plans to remain free.
The Rob Dyrdek AMA: On May 10, back by popular demand, Trends is hosting a Q&A with the icon known simply as “human optimization.” Get in here.
New do: D2C hair color brand Madison Reed wants to open 20 new color bar locations and hire 850 colorists by the end of the year, thanks to a new $33m investment. #ecommerce-retail
The ambitious European Commission’s 100 Climate-Neutral and Smart Cities Mission includes 112 cities that have pledged to be climate-neutral by 2030. Each will now prepare a contract detailing its plan of action. #clean-energy
Moderna has requested FDA approval for its vaccine for kids under 6 years old. If approved, it will be the 1st covid vaccine available for young children. #emerging-tech
A mystery: An internal document suggests Facebook doesn’t know what it does with users’ data or where it goes. The document describes it as a bottle full of all kinds of user data poured into a lake. #privacy
Whistleblower Edward Snowden was revealed as a participant in a 2016 ceremony to create zcash, a cryptocurrency designed for privacy, not transparency. #fintech-crypto
Oops: Twitter overcounted its users for 3 years by ~1.9m per quarter. How? It counted users’ multiple accounts as active, even if the users had abandoned them. #big-tech
Selina Lee / The Hustle
CBD is freakin’ everywhere
The World Health Organization reported a 25% increase in anxiety and depression worldwide after the 1st year of the pandemic.
As a result, people are turning to all kinds of solutions:
Therapy: ~¾ of mental health professionals who treat anxiety reported an increase in demand
Medication: Prescriptions for anti-anxiety drugs popped 34% at the onset of the pandemic
Alcohol: Binge drinking jumped 21% among US adults
Then, there’s CBD — which has seen a spike in usage across all generations, per Morning Consult.
… only ¼ of US adults had used a product with CBD. These days, that number is up to ⅓.
And the pandemic isn’t the only reason. It’s also freaking everywhere — what started with gummies and tinctures has evolved into CBD-infused drinks, massage oils, bath bombs, and more.
The bigger question is, Does it work? To that end, results are mixed. Some studies have suggested CBD can treat anxiety, but, up to this point, only one CBD medication has been approved by the FDA (for epilepsy).
3 eggcellent cash flow opportunities
The cost of scrambled eggs recently popped300% in one week. What the cluck?
There’s nothing funny about food prices spiking to all-time highs. The average American eats 245 eggs a year, and price bumps can add a considerable amount to grocery bills for families that are already cash-strapped.
But whenever I see this kind of phenomenon, I ask, “What are the 2nd and 3rd-order effects?” So, egg prices spiked. Now what?
One of the best ways to combat inflation is by taking the means of production into our own hands. (For example, raising your own chickens, which, for ~$381, can set you up with endless eggs for years to come.)
Here are 3 ways entrepreneurs can play the chicken vs. egg game:
Rental chickens: Companies like RentACoop and Rent The Chicken deliver customers 2-4 hens, a coop, feed, and directions. You can babysit your chicken for 4 weeks to 6 months and it’ll cost between $250 and $500. At the end, you can even buy them.
The owner of cleverly named Rent The Chicken noted a 48% YoY increase in her business in 2021. Maybe start a competitor?
The chicken whisperer: Chickens are walking targets. Everything tries to murder them. This lady sells chickens, coops, etc., and teaches you how to raise and protect them. In 2020, her sales were up 400%.
Chicken influencer: You could do what the kids do these days — document yourself buying backyard chickens and create products around it, like Jill did.
The lesson is to always strive for the information advantage and act.
P.S. If new cash flow ideas are your thing, you should definitely subscribe to my newsletter, Contrarian Thinking.
Ask Me Anything with Rob Dyrdek: May 10
Human optimization is revisiting Trends for one hour of exclusive insights. We couldn’t be more pumped.
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