FMB / NTU - GymShark live project Main report by Isobel Soylev

GYMSHARK

Retention and Loyalty Project ISOBEL SOYLEV N0828271 WORD COUNT : 3969

I confirm that this work has gained ethical approval and that I have faithfully observed the terms of the approval in the conduct of this project. Signed (student) ………….......……………………………………………

CONTENTS 1/2.......................................................................INTRODUCTION 3/4......................................................................METHADOLOGY 5/6......................................................................1.SITUATIONAL ANALYSIS 7/8......................................................................COMPANY OVERVIEW 9/10....................................................................MARKET OVERVIEW 11/12....................................................................PESTLE 13/14...................................................................KEY ISSUES & CHALLENGES 15/16....................................................................SWOT 17/18....................................................................ACTIVE STYLE TRENDS 19/20..................................................................NEEDSCOPE MODEL 21/22...................................................................CONSUMER INSIGHT 23/24..................................................................BRAND POSITIONING 25/26..................................................................COMPETITOR ANALYSIS - LULULEMON 27/28..................................................................ALOYOGA 29/30.................................................................USP 31/32...................................................................TARGET MARKET 33/34................................................................. CORE COMPETENCIES

35/36................................................................2. MARKETING STRATEGY 37/38.................................................................THE VISION 39/40................................................................SMART OBJECTIVES 41/42.................................................................GROWTH OPPUTUNITIES 43/44................................................................3. COMUNICATION PLAN 45/46................................................................COMUNICATION PLAN 47/48................................................................YEAR 1 49/50................................................................YEAR2 51/52..................................................................YEAR 3 53/56................................................................COMUNICATION OVERVIEW 57/58.................................................................OUTGOINS 59/60................................................................MEASURE AND REVIEW 61/62..................................................................CONCLUSION 63/64.................................................................APPENDIX 65/67.................................................................BIBLIOGRAPH 68/69................................................................REFRENCES

INTRODUCTION

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Customer retention and customer loyalty are more than just

a saying. They both share similarities, but retention and loyalty cannot be the same thing when describing consumers. A retained consumer may or may not buy from the brand, but when it comes to buying again, they might choose a different brand. A loyal customer however will repeatedly buy and encourage other people to buy from the company as well. This report analyses fitness apparel brand Gymshark and identifies opportunities for the brand to gain and develop loyal consumers.

To understand the market and an understanding of Gymshark consumer behaviour, a combination of primary and secondary research was gathered for this report.

Primary research was gathered by Q&A at GSHQ with Sophie Beckley and Hannah Cooper. 3 surveys were conducted. The first survey was sent to fitness enthusiasts with a mixture of age and nationalities to clarify consumer behaviour, consumer location and the brands positioning. The second survey was sent out to Gymshark shoppers to gain an insight into their thoughts about how the brand can develop and where they think the brand is lacking. The third survey was sent to none-Gymshark shoppers to understand why they donâ&#x20AC;&#x2122;t shop with the brand and their insights on what Gymshark could do for them to become a customer. All three surveys had a sample size of 85 respondents.

Secondary research was a combination of online research, such as WGSN to analyse upcoming micro and macro trends and Business Insider to evaluate the future of retail. Scholarship articles were used to back up gathered information and relevant books covering e-commerce, finance and social media marketing. All these resources helped gather an understanding of Gymshark and the market that the brand is currently in as well as create a strategic plan presented in this report.

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METHoDOLOGY

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COMPANY OVERVIEW Gymshark Is A fitness apparel & accessories

Gymshark has since grown from a screen-printing operation In a garage into one of the fastest-growing and most recognisable brands in fitness. This growth has come from a devotion to producing innovative, effective performance wear and an ever-expanding social presence, along with a commitment to the Gymshark vision: â&#x20AC;&#x153;Before there is an Action, there is an ideaâ&#x20AC;?. (Gymshark UK, 2019) Gymshark was placed No.1 in the prestigious 2016 Sunday Times virgin fast track 100. Their revenue increased from $50m in 2017 to $128m in 2018. Gymshark has one of the fastest-growing net worth in the fitness apparel market. Focussing on targeting niche products, Gymshark has managed to make a place in a wider industry made up of established brands such as; Nike, Adidas and Under Armor etc. Gymshark has also managed to maintain its cult-like status by not wanting to sell through third-party retailers like ASOS, JD Sports. The brand has also become unique with is the exclusive promotions that it holds twice a year.

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brand, manufacturer and online retailer. Based in the United Kingdom, it is supported by millions of highly engaged social media followers and customers from 131 Countries. The brand was created In 2012 By teenager Ben Francis and A Group Of His High-School Friends.

MARKET OVERVIEW Several reports and trend forecasts on the future of the fit-

According to a survey on Monitor, consumers say they are willing to pay more to keep cotton substituted with synthetics such as polyester in items like their T-shirts (65%) and activewear (55%). The survey showed the reason consumers have come to this conclusion is for comfort (49%), product lasting longer (34%), garment breathability (10%) and kinder to the environment (10%). Yoga pants and leggings have developed much more than the other athleisure products as they have become the flagship clothing for the athleisure trend. The leading five brands for yoga pants and leggings have been sourced out to be Victoriaâ&#x20AC;&#x2122;s Secret, Aeropostale, ALO, Forever 21, and Electric. Some of the key brands catering to the premium price range in the segment are The Upside, Beyond Yoga, lululemon, ALO, and Electric (Mintel, 2018). In 2018, USA activewear sales reached $80.1 billion, according to Euromonitor International. The category is projected to grow roughly 17% by 2023 to $94.1 billion.

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ness apparels market suggest that the fitness apparel industry is a highly developing and competitive sector, due to many small businesses making a step into the market. Activewear has become very popular, traditional manufacturers have expanded their opportunities into fitness apparel market, while makers of sportswear continue to offer new ideas and styles to consumers.

• Impact of Brexit has definitely affected the brand with importing products and sending dispatch of product items.

• Depending on sales and a certain country can be affected by its economy by bringing in sales to drop within the country the economy is bad.

• Compliance with international trade restrictions and tariffs currency conversion rates and customer duties.

• With the trend of healthy living can be seen that gym membership has reached an increase over the years, people have developed an interest in improving their health this matter would affect fitness apparel positively.

• Political interest in improving health of country increase in interest in sports apparel brand.

S • Within the UK the ageing population represent a new market that brands could easily target. • Gaining advertisement within a big following on social media would encourage and increase trust with the consumer before making a purchase. • In Gymshark through the use of cookies the brand can access data within the consumer such as; What product they have bought previously, what products they have looked at and are interested in with this information the company can use specific ads to target the consumer and send similar products to try to encourage the consumer to rebuy.

T • Within todays society there is many different options to make a payment for any kind of product such as; apple pay, google pay, PayPal, Amazon pay to contactless payment in some retail stores have even took away cash registers and making there consumers pay via these payments or by scanning a QR code. • Technology that improves consumer experience has become popular within the retail sector with VR and AR developing.

L • Being aware of design patents of competitors is a important aspect when creating a new product. • Gymshark is famous with their popular brand ambassadors and this would lead of their contract being fair for company and to represent the brand correctly.

E • Usage of eco-friendly packing and developing packing suitable for recycle. • Within the company be aware of waste disposal such as food from the food cantina and developing paper waste and develop a way to minimise it. • When producing the product usage of eco-manufactures that would be using organic products to weave and colour fabrics.

KEY ISSUES & CHALLENGES

das, Under Armor, Puma etc. have successfully identified themselves and differentiated their names in this highly competitive market. These brands are known to interact with their consumers by offering free gym classes, VIP discounts, loyalty schemes, yoga and running clubs â&#x20AC;&#x201C; a brand that is not a specialist in this market would find it difficult to compete against this. In order for Gymshark to increase its value and consumers interaction, they should consider similar strategies of the market-leading brands to build a stronger presence & consumer loyalty.

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Competitors such as Nike, Adi-

• The brand developing a recognizable brand name for their target demographic. • Being one of the fastest growing UK company in terms of sales (2016).

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• Holding a strong social media presents. • Having a various of social media influencers to be able to do the brands online advertising. • Payments being done through electronic funds is a fast and efficient. • Outsourced manufacturing.

• Having a physical present with a store or an pop-up opportunity’s. • New emerging markets. • Wearable technology.

• Target new consumers in new markets. • With different strategy’s gain loyal consumers and interactive consumers.

• Delivery costs.

• Brexit economic uncertainty.

• Exclusively online retailer.

• Many similar business entering the market.

• Not enough opportunities for consumers to interact with the brand.

• Men’s sales only make up 20%.

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S.W.O.T ANALYSIS

ACTIVE STYLE TRENDS 21/22 THE CLUBHOUSE The concept of old school is focusing on old-school glamour and

SIZE OVER MATER The future of athleisure is moving and developing in a more

diverse direction, as smaller brands develop to niche demands and big-name brands shift to reflect and accommodate evolving consumers lifestyles, practicality and ideals. Developing products for all across all sizes in particular does become critical for the brands.

CYBER ESCAPES Cyber escapes trends is a nostalgic theme that brings digital

influence into physical location. It is seen as a bridge between club and gym physical spaces. This trend is seen to be relevant to fitness and training.

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decadence to offer a sense exclusivity. A feeling opulence is key in this trend, creating a premium feel within the garments with satin sheens and merino performance also has been seen adding monograming to add more of a luxurious personation, This trend is relevant for yoga, fitness training and ath-luxe.

NEEDSCOPE MODEL

Clothing, Price, Quality

Feeling good about making a big purchase, Feels better about sustainability factor whilst making the purchase, First time buyer could be surprised of quality of product.

Quality, Fun, Energy

Female & Male, Target Age 20-28, Niche, Ethical

High quality fabrics used within each product, Main products are made in the UK manufacturing detail is a main detail, Premium price point.

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Peer Group, Body Image, Self-Care

62.5%

Of 85 Gymshark consumers also said they also shop from Nike, Adidas, Underarmour, Puma etc.

42.3%

Of 85 Gymshark consumers said they are more likely to be shopping from the brand when they are offering a sort of promotions.

49.4%

Of 85 Gymshark consumers said they are more likely to be purchasing sets instead of purchasing one items

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CONSUMER INSIGHT

BRAND POSITIONING Innovative

Varied selection

The two brand positioning maps clearly identify the main

competitors of Gymshark. The first map can identify that Alphalete, Alo yoga and Under Armour are the main competitors within an innovative and trend driven combination. The second map shows Gymshark as is a premium young brand when analysed with its competitors.

Trend driven

Premium

Mature

Young

Affordable

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Limited selection

COMPETITOR ANALYSIS LULULEMON

market, one of their most recognized products is the Barely there leggings. The resemblance to seamless camouflage collection from Gymshark both brands has got difference in price. Both brands have a similar following, except Gymshark has developed a stronger platform with interactions within their consumers. Lululemon has an older background to stand on and has gained brand awareness with physical stores, Lululemon’s sales are noticeable larger than Gymshark’s as they even developed flagship stores. In the latest fiscal year, Lululemon’s sales amounted to $3.3 billion, with sales at stores open for at least 12 months surging 18%, compared with growth of 7% during the prior year (Thomas, 2019). Even though Lululemon is a brand focused around yoga and started as an online company and overtime has developed within multiple flagship stores over the globe, as well as a flagship store in London that is based on consumers experience.

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Lululemon is one of the biggest competitors within the

Alo yoga has developed in to become one of the most popular brands in fitness apparel with its exclusive prices and seen on celebrityâ&#x20AC;&#x2122;s helped it gain its brand awareness. Alo began in Los Angeles in 2007 as a yoga based brand and started of online but now has developed more brand awareness with itâ&#x20AC;&#x2122;s in store and exclusive yoga and fitness lessons within the stores. In fact, the world has seen a 61 percent growth since 2007 and the industry has a projected 6.5 percent compound annual growth rate from 2018 to 2024 (Resnick et al., 2019). Alo yoga has generated a big following on multiple channels with different events and interactions but still has a lower following then Gymshark with an 2.2 M following on Instagram this shows Gymshark has always found a way and has more interaction with its consumers more then any of there competitors.

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ALO YOGA

USP

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Ben Francis, Founder of Gymshark

Gymshark has always been very confident in accomplishing needs of their consumers. By being aware of how they need the product, what they want with the product of and what the products needs. Having a clear brand position Gymshark has identified itself and its competitors around the brand clear enough to allow the brand to remain one step ahead of the competition.

Gymshark has an advantage against all of its competitors due to the quality and of its style of the clothing, being supported by over 60 powerful social media influencers, with in the surveys I provided to Gymshark consumers 70% said they maid bulk purchases after seeing the products on one of the influencers and style it the way they have.

”

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“

We’ve set the standard and continue on our journey towards being the greatest fitness brand in the world.

TARGET MARKET adults that were born within the 1990s onwards. This puts the consumers age between 18-28. The majority of consumers are female at 80% and 20% are male. This is a big difference and Gymshark would prefer to have equal distribution. The majority of Gymshark female consumers are students who like training and looking stylish at the same time. They also buy into Alphalete, Nike, Adidas, Under Armour and Lululemon. Gymsharks female consumers would describe themselves as fashionable, hardworking, enjoys socialising & passionate. Gymshark male consumers tend to be students & business starter entrepreneurs who enjoy going to the gym and most likely plans which days he is going to be training. He shops with the same other brands as the female consumers.

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Gymsharks main target audience is young

Gymshark is well developed as a compa-

ny and understands what their consumers want. This understanding has grown from consumer interaction through Instagram and other social media platforms. When asking questions such as â&#x20AC;&#x153;would pay extra for quality?â&#x20AC;? 85% said they would pay extra for quality and 15% said they would pay extra for comfort. Gymshark has given what their consumers just that with comfy and high-quality products. Gymshark has also been able to keep a step ahead of competitors by developing and testing their own materials, making their products exclusive and different from other brands.

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CORE COMPETENCIES

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the vision

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Vision In Everything We Do, Be True To Our Own Vision And Respectful Of Others. We Are Here To Bring Ideas To Life. There Is No Idea Too Big, Or Too Small.

SMART OBJECTIVES

IN THE SECOND YEAR • Having a hashtag trending within UK, USA, Germany and Canada. • Gain 10% of lapsed consumers into active consumers that interact with the brand.

IN THE THIRD YEAR • Gain another 15% of lapsed consumers into active consumers that are interactive with the brand and attend events etc. • Gain awareness for Gymshark events and get a higher turnup through Gymsharks own app and other social media platforms.

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IN THE FIRST YEAR • Aim to get 10% more interactivity within the brand and the consumers. • Gain 15% off the lapsed consumers to purchase within the 6-mounth time period to not to fall back as a lapsed consumer.

GROWTH OPPUTUNITIES Gymshark are currently leaders in the e-commerce in fitness apparel mar-

Market penetration – Existing; • Affordable pricing. • Good interaction with consumers on social media. • Great customer service. • Outstanding and different designs. Product development – New; • Virtual reality. • Loyalty app development. • Augmented reality. • QR shoppable bus development. Market development – New; • Mobile apps. • Interactive events. • Tech accessories. • VR fitness games when developing a QR shoppable bus. Diversification; • Loyalty app development sync into current app and sync with the Health app provided on mobile phones. • VR development for games and to gain more buzz from the consumes with the bus going through the cities. • Scan & go payment options on the pop up bus.

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ket, however for Gymshark to gain more loyal and active consumers they should consider developing a loyalty app to gain points where Gymshark consumers can interact with the brand more personally and become more active with the brand. Gain new consumers by sending a QR shoppable bus to big cities. The bus will be stocked with a limited number of products so consumers can feel and see the quality of the product.

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comunication plan Creating a drive-through store to give new and existing consumers a

The consumer could use these points to earn early access to new collections or early access a popular discount event in the year such as the blackout sale allowing them to purchase before everyone else. The app would also provide special recipes and consumers could make weekly meal and exercise plans on one app as well as follow influencers exercise and meal plans. They could also add friends to motivate each other.

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chance to experience and feel the quality before purchasing. Influencers would be present and give an opportunity to interact with consumers with VR games for more interaction. Developing a loyalty scheme for consumers to plan their workout within the app and gain points through their activeness and success. If the consumer walks a certain about of steps tracked from smart watches or health apps or when they complete a certain part of their exercise plan the consumer gains points.

YEAR 1 The first year will be focusing on developing the loyalty scheme integrating

1-4 months

5-8 months

9-12 months

launching Loyalty scheme

Social media ads

additional offers

Gymshark will be introducing their new loyalty scheme within the app they already have in progress by encouraging consumers to give their personal information to socialize with people that have the same interest with them, to learn new methods to use in the gym, new recipes and also to earn points that would reward them exclusive offers and invites to Gymshark events.

Additionally, the year will be aiming to gain loyal consumers and retention consumers, for consumers to be aware of the loyalty scheme have ads through social media on Gymshark page, Gymshark ambassadors inviting people to join and interact with them throw the app to promote people to sign up. Send out emails to all Gymshark consumers to keep them aware of the development of the app, provide the consumers a platform where they can pay an annual fee of ÂŁ20 - ÂŁ25 in return get free next day delivery through out the year.

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it into the already progressing Gymshark app, develop consumer relationships and convince lapsed consumers to make a purchase. Loyalty schemes can be adapted in various ways, but consumers today like being social and share their journey with their loved ones and get inspired from other influencers or to have an experience within the scheme. My survey showed that most Gymshark consumers are more likely to shop at Gymshark when there is a reward involved. Combining all of these facts into one will help increase engagement with consumers and increase sales, linking back to the identified SMART objectives.

YEAR 2

them as loyal consumers by getting them to purchase regularly. Society has proven one size doesnâ&#x20AC;&#x2122;t fit all, provide content that motivates every consumer from every size by showing exercises to burn fat the easiest way, motivate plus sized consumers to get into shape with the brand. Provide social proof of other consumers benefiting from the loyalty scheme. Have exclusive events with invitations sent out to only to consumers who have gained a certain amount of points through the app. This would gain hype around the app and encourage more consumers to join and make a purchase in order to be included. Also start advertising for the pop-up bus what will be making a trip throughout the USA and UK in the third year.

1-4 months

5-8 months

9-12 months

Campaging for plus size consumers

a Gymshark event with consumers from the app

Ads for the pop-up bus

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The second year will be focusing on regaining lapsed consumers and keep

YEAR 3

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As the growth of Gymshark continues through these two years, there is an opportunity to personally interact with Gymshark consumers by sending a pop-up bus around key cities. Consumers will have a chance to see their favorite influencers in person in their hometown. They will have a chance to experience the feel and quality of the product before purchasing. This pop-up bus will be completely electronic by having QR scans to make the purchase, there will be a limited amount of stock on the bus as it would be a struggle to keep track of inventory and travel at the same time. There will be VR games with the influencers to win small prizes such as free delivery; small Gymshark items such as a Yoga mat especially made for the event or an experience to workout with an influencer. The bus will also have 3D body scanning mirrors for consumers to try fit before their purchase.

1-4 months Promotion towards

5-8 months

9-12 months

Launch the QR pop- up bus

Refine and grow in international markets

Comunication overview

COMUNICATIONS

JAn

FEB

MAR

apr

MAY

JUN

JUL

AUG

sep

oct

nov

Dec

Instagram

Direct Emailing Blog Pop-up Bus Flyers Youtube

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Facebook

June • Promote Gymshark loyalty scheme through their Instagram accounts and creating a hashtag so aim towards the SMART objectives.

• Especially locate the cities the pp up bus is going to be going through and have specific advertising for each city.

• Create an highlight with answers that consumers might need to know to make their journey signing up much easier.

• Send out direct emails advertising the pop-up bus that’s going to be near them very soon.

• Show some of the recopies throughout a YouTube video of a sneak peak of the app if they desire to see ore just like that video.

• Design flyers and send them put for new and current consumers.

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January

MARCH

july

• Promote App and coming up event opportunity’s via Direct emailing.

• Launch the pop-up bus that consumers can shop on via a QR code.

• Have live streams with Gymshark HQ insights for consumers to feel part of the company.

• Live stream the ongoing pop-up bus and stream the interactive games to create a buzz around it.

• Promote and provide images and exclusive glimpse of the pop-up bus.

sep

oct

nov Dec

£36.000

£52

£91

profits

£182

£30.000

£156

MAR

20000 28000

FEB

MAY

JUN

28000 40000 40000

apr

AUG

sep

oct

nov

Dec

60000 50000 50000 50000 60000 68000

JUL

£11.150.008

514.000

£27.000 £27.000 £9.000 £9.000 £9.052

£27.143

£307.000 £307.000 £458.600 £458.600 £658.948

£979.857 £831.000 £831.000 £831.000 £998.000 £1.131.000 £6.732.870

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£640.857

£502.000 £569.000 £4.417.138

£22.143 £4.000 £4.000 £4.000 £4.000 £4.000 £142.338

£166.000 £166.000 £232.400 £232.400 £332.000 £332.000 £498.000 £415.000 £415.000 £415.000 £498.000 £565.000 £4.266.800

£500.000 £500.000 £700.000 £700.000 £1.000.000 £1.000.000 £1.500.000 £1.250.000 £1.250.000 £1.250.000 £1.500.000 £1.700.000

20000

JAn

Total

£27.000 £27.000 £9.000 £9.000 £9.052 £23.143 £18.143 £4.000 £4.000 £4.000 £4.000 £4.000 £142.338

£91

£52

total costs £193.000 £193.000 £241.400 £241.400 £341.052 £359.143 £520.143 £419.000 £419.000 £419.000

total of one off fixed costs

cost of sales

turnover

units sold

£52

£5.000 £5.000 £5.000 £5.000 £5.000 £5.000

Marketting costs

total

Petrol

ar mirrors

flyers

£24.000

£2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000

AUG

instagram

JUL

£24.000

JUN

£2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000 £2.000

MAY

Facebook

apr

£28.000

MAR

£14.000 £14.000

£18.000 £18.000

FEB

Total

Pop-up bus

App Developer

JAn

Marketting costs

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Outgoings ESTIMATED ROI & PROFITS

MEASURE AND REVIEW

of lapsed consumers into active consumers and increasing the sales at the same time, with an extra ÂŁ6.732.870 that is measured by studying the financial figures for the year 2020. Also, gain 35% more consumers to interact with the Gymshark consumers and the consumers to interact within the website/app by measured by analyzing the number of clicks from invitations sent via direct emailing. The communication plan will increase brand awareness as well of maximizing profits, what will be measured through different range of techniques including social media followings and app signups. The pop-up bus will be measured by tracking the number of consumers attending to the event and analyzing sales figures through the pop-up bus and after the event. The figures for July would be expected to be higher than the previous months as the pop-up bus will be released and is expecting to reach out to new and existing consumers to make a purchase through the event. Brand loyalty will be measured by through the number of consumers signing up to the app.

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The smart objectives of increasing the lack

conclusion

This report has carefully considered the most suitable

Through the use of a three-year marketing strategy and a one-year communication plan focused on a loyalty scheme and a pop-up bus, the brand will be gaining ÂŁ6 million or more than they were normally projected by 2020. The communication plan will also be aiming to achieve the SMART objectives for the year by gaining loyalty and retaining consumers by brand awareness and engagement by this the company will be improving their loyal consumers and seeing profits within sales. With this strategyâ&#x20AC;&#x2122;s Gymshark will be able to keep communication and interaction on a daily basis with their consumers and keep relevant insights to maintain their stable position in the competitive market.

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and effective strategies to increase consumer royalty and consume retention for the brand Gymshark. By both taking on primary and secondary research it is clear that the brand has and still gaining massive growth through social media.

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Appendix

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