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For decades the big brands – the likes of Nike, adidas and Reebok – have dominated the field in sportswear. Now, with category sales growing at a pace around the globe, a flurry of fresh contenders are arriving targeting performance clothing in particular. Regardless of the 23% total value growth predicted in global sportswear to 2017, getting a sportswear brand off the ground is a tough proposition. Euromonitor International looks at what tactics start-up sportswear brands are employing – and how their arrival might impact on the category.
For new arrivals in sportswear to succeed a unique brand positioning is vital – simply following in the footsteps of the established brand leaders isn’t a strategy for success. Targeting smaller sports that are growing in popularity has potential. MooMotion, for example, a New York-based start-up that began life in 2012 produces cycling and triathlon gear for women – both sports growing in popularity. Focusing on a particular sport means the brand can understand the needs of the athlete they’re targeting, fine tuning their products for the relevant sport and giving themselves a fighting chance against the big name brands.
Canada’s Lululemon is a prime example of how being an expert in the chosen field can result in success. Since its creation in 1998, Lululemon has steadily acquired 1.2% of the North American performance sportswear market by focusing its attention on yoga wear for women. It must be acknowledged however that the company has faced problems over recent months – sheer yoga pants hit the headlines when recalled in early 2013, bringing doubts over product performance, then the problem was exacerbated when the company founder implied that larger sized women were at the root of the problem rather than the garment itself. Despite a good start, the brand now faces the challenge of rebuilding its image.
With yoga pants priced up to US$100, prior to the faulty products of 2013 at least, Lululemon had also proven that provided the quality and brand positioning is right, start-up sportswear brands don’t need rock bottom prices. However, a delicate balance must be struck. New arrivals in sportswear need to be priced competitively with the big brands – if not consumers may never give them a try, ruling them out on the basis of cost. Price too low however and consumers may assume that performance won’t be up to scratch. Without the huge economies of scale afforded to the category’s global players, balancing the books is certainly a difficult proposition for sportswear start-ups, but the key is to be competitive without hugely undercutting the big name brands.
Utilising social media is proving a great way for new entrants to the sportswear market to get out of the blocks, acting as a great leveller by allowing big and small brands alike access to their consumers on an even playing field. In 2013 Tribesports launched the first performance sportswear brand to be funded through crowdsourcing. The Tribesports range was entirely funded via Kickstarter, with those making a financial contribution given a say in product design. Prior to launching its apparel range Tribesports nurtured a large online community, with more than 200,000 members all pushing each other to achieve their fitness goals. What better way to get a sportswear range off the ground than by targeting it at a pre-established community of fitness fans already engaged with the brand? For sportswear start-ups, a social media strategy is as vital as the warm up before a race.
Lastly, another strategy adopted by sportswear start-ups is to play on social responsibility. With sportswear’s major players having historically come under fire for falling short on issues of social and ethical responsibility, this is an area where smaller companies can stand out from the crowd. Janji, for example, a Boston-based company producing running clothing, donates US$4 to charities providing food and water around the world for every item it sells. Although the likes of Janji are currently targeting a niche group of ethically-minded consumers, concerns over the ethical sourcing of apparel are likely to gain momentum in the mainstream, indicating that socially responsible sportswear holds potential as a future prospect.
While the likes of Nike and adidas don’t need to worry too much about being usurped from their medal winning positions in global sportswear in the immediate future, they must however keep a tactical eye on their new opponents – especially close to home. In its home market of Canada Lululemon has quickly amassed 6% of the sportswear market to become the category’s second largest brand, behind only Nike, overtaking adidas in 2012, proving a new arrival that gets its offering right can make significant headway – although only time will tell if Lululemon’s impressive growth trajectory can be maintained after last year’s difficulties.
While some of the category’s new arrivals won’t last the distance, with so many new competitors joining the race, now is an exciting time in sportswear.