Driven by extensive knowledge of its customer, a differentiated product and the exploitation of influencers, online sportswear retailer Gymshark sales skyrocketed 217% to £40.5m in FY2017.
Its rapid rise means that it will overtake established players such as Sweaty Betty, with analysts expecting it to reach £200m in global sales by 2019.
A differentiated proposition in a crowded market
Despite Gymshark having strong competition from major sports brands like NIKE and adidas and more niche competitors such as Lululemon and Sweaty Betty, it has successfully differentiated itself. It is more fashionable than the major sports brands and younger than the more premium brands.
It also has the added benefit of appealing to both genders, giving it a wider audience than Lululemon and Sweaty Betty, which according to recent research by GlobalData appeal to female shoppers aged 25-35. Gymshark further differentiates itself through innovative products, for example its Energy Seamless collection of sports leggings that come with built-in underwear to ensure that they are ‘squat-proof’.
The use of influencers
Gymshark catapulted itself into recognition by sending its gym wear to Lex Griffins – a well-known fitness guru followed by gym buffs – who consequently wore the merchandise and directly communicated the quality of the ranges, making it a must have among fitness fanatics. Now Gymshark has an army of high-profile fitness influencers promoting its product on YouTube, Instagram, Twitter and Facebook.
The outcome is 2.1 million engaged followers on Instagram, significantly more than rivals JD Sports and Sports Direct. Last month, Instagram introduced the ability to purchase items directly through its site by clicking on links embedded in photos. Currently Gymshark has a ‘shop the Instagram look’ feature on its website but should incorporate a purchase function into its Instagram feed to fully capitalise on the growth of social commerce.
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Founder Ben Francis has rejected stores in favour of pop-up stores with limited-edition products and guest appearances from influencers. As a result attendance is extremely high and events feel unique and exclusive, driving further sales. Not stocking through third-party retailers such as ASOS, JD Sports and Sports Direct also ensures that the brand image stays intact and it retains its cult image among gym goers.
Future-proofing Gymshark’s success
For an online pureplay, Gymshark’s delivery is behind competitors; it has no third-party pick up options and should consider introducing a delivery saver scheme to drive further loyalty.
Gymshark also has copy-cat competitors hot on its tail, such as Physiq Apparel, which offers a similar price and product. As Gymshark grows, under the right circumstances it should consider mitigating emerging competition through acquisitions, as Boohoo.com has done through its acquisition of PrettyLittleThing and Nasty Gal.
For more insight and data, visit the GlobalData Report Store – Verdict Retail is part of GlobalData Plc.