Gymshark Live Project

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MARKETING AND COMMUNICATION STRATEGY ELIS POTTER N0816376

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ETHICS CLAUSE I confirm that this work gained ethical approval and that we have faithfully observed the terms of approval in the conduct of this project.

Signed ............................................

Elis Potter N0816376 Word count: 4002

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CONTENTS WHERE ARE WE NOW?

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Brand overview

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Social media

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Consumer segmentation

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Marketing Mix

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Market overview

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USP

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Brand positioning

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Competitor analysis

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PEST Analysis

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Trend analysis

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SWOT Analysis

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Key issues and challanges

HOW ARE WE GOING TO GET THERE? Stage one - reactivate 35

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Stage two - retain 36 WHERE DO WE WANT TO BE? Brand vision 28

Stage three - transform

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Communication strategy

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The future

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SMART objectives

Communication timeline

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Finance

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Measuring 44 Conclusion

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INTRODUCTION This report will explore a marketing strategy for brand Gymshark to build customer retention and loyalty. Firstly, the brand’s current situation, competitor analysis and market overview will be explained.

Current macro and micro trends will be analysed together with primary research to develop a relevant marketing and communication strategy. Suggestions will be made to support the brand’s growth and retaining loyal customers.

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METHODOLOGY Primary research objectives were to gather Gymshark consumer insight and find possible weaknesses in the eyes of the consumer to develop a relevant marketing strategy. Secondary research objectives were to get an overview of the brand’s current situation, market health and explore growth possibilities for the brand to extend its success.

The completed primary research consists of a questionnaire conducted on the SurveyMonkey platform. It was specifically targeted towards customers who had bought from the brand intending to understand the brand’s consumer.

The questionnaire consisted of short and simple questions in a way it would not affect the respondents’ answer. There were 100 respondents, 70% female and 29% male, 1 respondent preferred not to answer about their gender. The majority of the respondents, 65%, were aged 18-24. An order from the brand was also done to experience the purchasing and returning process.

Secondary research was conducted on a variety of databases and websites such as Mintel, Passport, LS: N Global, Business of Fashion, The Economist and WGSN. To gather the further insight of the brand, Gymshark social media platforms, blog and other communication channels such as newsletter subscriptions were analysed.

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WHERE ARE WE NOW? PART ONE

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BRAND OVERVIEW “Gymshark is one of the fastest growing and most recognizable fitness apparel and accessories brands, supported by over 5 million highly engaged social media followers and customers in 100’s of countries.”

“Gymshark is a fitness apparel & accessories brand, manufacturer and online retailer based in the United Kingdom.” (Gymshark, 2020) Gymshark was founded by Ben Francis and his high-school friends in the year 2012. It is now lead by Ben Francis, Steve Hewitt, Dave Parry, Paul Richardson, Chris Perrins, Réne Skytte and Noel Mack. The aim was to create innovative and comfortable workout wear which could also be worn outside the gym. (Gymshark, 2020) The founder Ben Francis sent the products to some athletes that he had noticed on social media. It later resulted in them becoming Gymshark brand ambassadors. The brand started promoting products through fitness enthusiast what now is known as influencer marketing. Currently, Gymshark sells its products to 131 countries worldwide and has gained millions of social media followers, who continue to love and support the brand. (Gymshark, 2020)

“Moving up 44 places from 2018, runner-up Gymshark made £18.1m in profit last year on sales of £103.2m across 178 countries.”

(Drapers, 2019)

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SOCIAL MEDIA “The influencers give shoppers a reason to buy into Gymshark over other brands, because they feel a personal connection,” she says. (Bearne, 2018)

Gymshark is very good at communicating with their consumers on various social media platforms. They have millions of followers on different social media accounts, each having its unique content and message.

The largest following the brand has achieved is on Instagram, with over seven million followers across their three accounts. There is an account for training videos, an account for women and an overall Gymshark account. The brand gets promoted by their athletes, who also have large followings. On Gymshark’s YouTube channel which has 232,000 subscribers, they post behind the scenes and past events footage.

Gymshark’s founder, Ben Francis also has his channel, where he gives business advice and shares his journey as a young entrepreneur. YouTube is the second most popular social media platform after Instagram amongst Generation Z. (Business Insider, 2019) Gymshark (3.9M), Gymsharkwomen (2.5M), Gymsharktrain (772K) Facebook – 1.6M Twitter – 244K Pinterest – 10M+ monthly viewers YouTube – 232.000 subscribers TikTok – 8.3K followers

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CONSUMER SEGMENTATION Geographic – Most traffic on the Gymshark website is generated from the UK, US, Canada, Australia and Germany. (SimilarWeb, 2018) The biggest market is North America.

Psychographic – Trend-driven, interested in current trends and taking care of themselves.

Ambitious and hard-working. Influenced by spending a lot of time on social media, they are influenced by others following the same path.

Value keeping their mind and body healthy, not focused on eating/ training trends, instead want to achieve a perfect balance and follow a lifestyle. Would rather support businesses who sell a lifestyle instead of just a product.

Demographic – Target consumers are considered to be men and women aged 16-25 or slightly older as the loyal consumer is aging. Students, educated young professionals, who have an average income.

Behavioural – The consumer values high-quality products and good performance.

Motivated by achievements.

PRICE Product prices vary from 8 GBP to 90 GBP.

Fitness apparel and accessories for men and women.

Innovative designs and performance activewear.

Middle-class price range.

Offer free standard deliveries on orders over 35GBP, free express deliveries available for orders over 65 GBP, international shipping costs vary.

Free UK returns.

PLACE

PROMOTION

Available online through brand’s website (B2C).

Arranged pop-up stores in various locations worldwide Black Friday “Blackout” campaign, June-July sale

International distribution centres.

Student discount

Headquarter located in UK.

Gymshark66

PEOPLE

PACKAGING

Gymshark family consists of their employees and brand ambassadors.

PHYSICAL

Over 215 employees and 11 athletes.

See-through matte packaging with the brand’s logo on it.

Items packaged separately.

Reusable for returns.

No physical stores, but have a simple and effective website for customers to have a good shopping experience.

Customers can leave reviews.

Good quality product images.

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MARKETING MIX

PRODUCT

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MARKET OVERVIEW The largest markets for Sportswear are North America, Asia and Western Europe.

Amongst the brand shares in the Sportswear market, the largest share is Nike’s with 15.2%, following Adidas 10.4% and Under Armour with 2.2%. The sales of Sportswear are predicted to grow significantly during the upcoming years. This shows that demand for sportswear is growing and the possibilities for Gymshark’s growth are realistic.

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Steve Hewitt: “It’s our USP that we are able to be agile, and create and produce new items within eight to 10 weeks.”

(The Daily Telegraph, 2018)

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BRAND POSITIONING

PREMIUM

LOW PERFORMANCE

HIGH PERFORMANCE

AFFORDABLE

COMPETITOR ANALYSIS 19 TALA TALA is a sustainable activewear brand for women founded in April 2019 by Grace Beverley. Their mission is to offer recycled athleisure and fitness wear that would not be highly-priced. The collections are inclusive, high-performance and made for every body type. They are currently using 92% of recycled materials, but aim to produce 100% up-cycled products. (TALA, 2020) TALA might be a threat to Gymshark because it’s targeting the same age group and having the same price point items. Since there is a movement towards sustainability and consumer looking for ethical brands what Gymshark is currently not focused on, they might choose to purchase TALA instead.

LULULEMON Lululemon is a technical athletic apparel brand founded in Canada.

(Lululemon, 2020) It is known for its high-quality yoga and athletic wear, healthy living communities and events. In comparison, Lululemon’s product range wider than Gymsharks, which affect the consumer to not purchase from Gymshark. Their target consumers are men and women aged 18-35 who have a slightly larger income. The pricing is more expensive than Gymshark’s, around 45 to 150 GBP an item. Lululemon has successfully found its way to the consumers by managing physical stores and creating a yoga-community. Gymshark could also be more available to the consumer with different types of workout festivals and physical stores.

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PEST ANALYSIS

P E

Political - Political situation in the UK is still uncertain if Brexit will happen or is postponed again. According to predictions, if the UK leaves the EU without a new trade agreement, there can be a loss of at least 4.5 billion GBP in a year. (Market Inspector, 2018)

Economical - Confusion concerning Brexit, leaving with no-deal or coming to an agreement, what will happen?

Customers may reconsider their purchases if the economy is predicted to lower and they are not financially stable. Gymshark needs to consider the possibility of lower sales until the consumer figures out their financials.

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Social – Aging population might be a threat to Gymshark who targets younger consumers.

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Technological – Sustainable materials innovation, Gymshark only sells on their website, however, customers are shifting to make purchases on apps.

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MICRO TRENDS

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MACRO TRENDS

FAST (CONSCIOUS) FASHION

AT HOME FITNESS

There is a rising demand for ethical and sustainable brands amongst all categories. While the number of people online shopping is increasing, it has remained difficult to find sustainable brands amongst the non-ethical ones. Platforms are being invented, that connect consumers to sustainable brands and what offer to section out the most important qualities for the consumer. Upcycling has also been on a rise, 71% of shoppers have planned to spend more on second-hand items. Fast fashion has begun to affect the UK’s natural resources, investigation of the pollution and consequences has been started. (LS:N Global, 2018) Gymshark has not released sustainable ranges and launches new collections frequently. An informed consumer might choose to shop with Gymshark because of that.

Consumers that are constantly busy with work and responsibilities have started to look for new alternatives for at home workouts. YouTube videos and online workout classes have been accessible to everyone for a long time, but now working out at home is becoming even more interesting. Online live workouts and wellness devices allow people to enjoy the time being at home and support with excersise knowledge. (LS:N Global, 2018) There could be an option for Gymshark to share live workouts on their app to make consumer engage more with their brand.

ENVIRONMENTAL SHIFTS

SHOPPING REINVENTED

SUSTAINABILITY

Demand for sustainable products and ethical brands is on a rise. The effects of pollution resulting in climate change are talked now about now more than ever. Out of control wildfires, storms and droughts affect water and energy resources resulting in rising production costs. Increasing competition may cause risks for supply chains and challenge the future of their business. (Euromonitor, 2019)

On-app purchases are becoming more popular amongst consumer, it is estimated, that purchases made on a mobile device make up to 50% of all digital purchases by the year 2022. Gymshark has an app, but it does not include a possibility to purchase products, therefore, to be even more accessible to their consumers an app development could be done. (Euromonitor, 2018)

“61% of consumers worry about climate change, while 53% believe their purchase choices could make a difference in the world.” (Edelson, 2018) Also an understanding of how the product is being produced, material sourcing and having an overview of the manufacturing could potentially make consumers more likely to pay more for ethical products. (Edelson, 2018)

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SWOT ANALYSIS

The company keeps growing, revenue reached 128M USD in 2018.

WEAKNESSES Limited accessibility in comparison to the competitors - only available online.

Quickly responsive to trends.

In comparison to larger competitors, limited product range.

Gymshark values their workers and employee satisfication is extremely important to them.

Difficult for the consumer to experience the brand and products if Gymshark does not have a permanent physical store.

Offers customer service on various platforms.

High quality, innovative and affordable activewear.

Due to not selling to any third-party retailers, they can make changes in a shorter period of time.

OPPORTUNITIES

Become more transparent and sustainable.

Open a permanent physical store where a customer can experience the brand in person.

Targeted for younger consumer aged 16-25.

Not very inclusive and diverse.

THREATS Oversaturated market, competition from bigger brands such as Nike and Lululemon.

Their younger price-sensitive target market may choose to purchase from other similar brands/fast fashion brands that offer a more affordable price.

The situation around Brexit might make their consumer reconsider spending habits.

A wider range of products, new product development, a product that would differentiate Gymshark from their competitors.

Bigger competitors, such as Nike, may be able to market to more people since they have more variations to personalise their campaigns.

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KEY ISSUES AND CHALLENGES The sportswear market is oversaturated which makes it difficult for Gymshark to achieve customer loyalty. Their aimed target consumer is at a price-sensitive age, many of them being students, which results in the consumer choosing more affordable alternatives. Many fast fashion brands have developed their own activewear lines, which are affordable and accessible. Gymshark has not been seen as a very diverse or inclusive brand, whereas bigger competitors like Nike are accomplished in that area. Nike and other bigger brands have built strong customer loyalty, which is a threat to Gymshark. Also, bigger brands offer a wider range of clothing and accessories for different workout types. Sustainability and ethically produced products are in consumers’ minds, but Gymshark has not given any insight into their production.

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WHERE DO WE WANT TO BE? PART TWO

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BRAND VISION

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“Before there is an action, there is an idea.

We exist to create the tools that help people unlock their full, incredible potential and put their ideas into action.

Be all that you imagined you could be. Be a visionary.”

(Gymshark, 2018)

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THE FUTURE Gymshark has achieved great brand awareness amongst their target audience. The brand’s aim is to build brand loyalty and keep customers shopping with them. The brand has already been successful in the sportswear market, competing with several big market leaders and still managing to grow. The aim for the future is to build an even more engaging community and for it to be known by the lifestyle they live.

Therefore, the goal is to retain customers and build loyalty to become their number one choice activewear brand.

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SMART OBJECTIVES 1. To reactivate the loyalty of 16-25 year-old existing customers by increasing customer satisfaction by 30% by January 2022 .

2. To retain 40% of the active consumers by introducing the loyalty program by 2023.

3. To transform 15% of the active consumers to the super-loyal category by creating more engaging touchpoints by 2024.

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HOW ARE WE GOING TO GET THERE? PART THREE

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STAGE ONE

REACTIVATE

POP-UP TRAILERS

The first stage of the retention and loyalty strategy is reactivating the “lapsed” customers. Therefore, the first stage would be organizing pop-up trailers to bring the brand back closer to its customer. Brand such as Nike and Lululemon have successfully developed an omnichannel retail experience and that allows the customer to experience the brand in person. Encourage customers to make a purchase – people are more likely to buy activewear in-store, which enables them to feel the materials, see what design fits them best and get customer assistance. 65% of the respondents stated when buying activewear, they would like to try it on before making a purchase. 75% find brand experiences such as pop up stores interesting..

The locations were chosen to take in consideration universities and the overall population of the city. Introducing pop-up store trailers to different cities and university campuses, since the target consumer is possibly a student.

UK – London, Birmingham, Nottingham, Manchester and Edinburgh Germany – Berlin, Hamburg, Munich Canada – Toronto, Montreal, Vancouver USA – Boston, Chicago, Miami, Dallas, Los Angeles Pop-up trailers will be located in the city centre or near a university campus, depending on the city and its size.

There will be an activity where customers can personalise their items, but for that, they would need to generate the energy used for printing. It could be done either running on a curved treadmill or rowing on a machine. 62% of the survey respondents said, that they would like to personalize or design their own gym wear. People in the survey also stated, that there are other brands the same quality items for a cheaper price, but a real brand experience could win back the lapsed consumers. “First Insight Report which found that 71% of all shoppers surveyed spent $50 or more when shopping in-store.” (Petro, 2019)

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STAGE TWO

RETAIN

APP DEVELOPMENT

Loyalty scheme in full action! Collect points, join the Gymshark family and get most out of it! Consumers can collect points while attending events, completing workouts on the Gymshark app and purchasing products. 61% of the survey respondents said, that a loyalty scheme does affect their purchases.

New updates on their website and app to improve the customer experience while making a purchase. Currently, Gymshark has its own workout app and a website to purchase products. The app will be developed so that on-app purchases can be made. Consumers might use the app while commuting to browse new-in products and read Gymshark blog posts. Website and app development will also include personalised messages when logging into an account. It will browse workout classes, fitness events and mindfulness classes near the consumers’ location, each attended event adds loyalty points. Consumers can create weekly training plans and collect points if they have achieved them.

Many other activewear brands are not focusing that much on sustainability and transparency which could be something for Gymshark to improve in. They do not have a very wide product range, which makes the changes easier to be done.

With every purchase, clients will receive a prepaid postage label for them to send back old workout clothing which will be recycled.

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STAGE THREE

TRANSFORM

REWARD

The final marketing strategy stage is transforming the reactivated and retained customers into the super loyal category. Stage three is about saying thank you for the repeat purchases and high brand engagement – the customers that are a real part of the Gymshark Family.

Loyalty scheme reward system - receive free passes to different workout classes. Gymshark X Barry’s Bootcamp, Gymshark X Soulcycle or Gymshark own events. Offering free workouts motivates the consumer, especially if it is not a usual class. Analysing the survey results, there were a correlation between how many days per week customers work out and how often do they buy new activewear.

According to the primary research, Gymshark consumers do not see the brand as very diverse or inclusive.

Gymshark is going to improve that by sharing consumers’ success stories and choosing them as brand ambassadors. Like other brands support athletes, Gymshark starts supporting their loyal customers too – to arrange a campaign search for a professional athlete who they could sponsor. Some people may have very high potential to be very good athletes and the brand could support their journey.

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BOSTON

LONDON

EDINBURGH MANCHESTER

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COMMUNICATION PLAN In order for the marketing strategy to be successful, a thought-through communication strategy needs to be followed.

The main focus is on direct mailing and giving the lapsed customer something surprising. 70 000 direct mail vouchers will be sent out on different dates throughout the year to customers living near the upcoming pop-up stores. The direct mail contains a personalised message to the customer, as well as information about the soon-to-be happening pop-up concept. Customers receiving the mail will also have an opportunity to sign up for a free gift, which they can collect in the store. A suggestion for the gift would be a resistance band because the aim is to motivate them to work out and achieve their fitness goals.

At the beginning of the year, a promotional video will be launched, which announces the pop-up store concept.

Social media promotion will be launched with a hashtag #TouchdownGymshark, which relates to the moving pop-up trailers across various cities and countries.

From January until September, there will also be a dedicated podcast series that features different quests and shares their stories. It gives the brand an opportunity to feature inspiring people from the pop-up experiences and amongst loyal customers. The series will include transformation stories, mental health episodes and motivational talks and have its own hashtag #TalkAboutProgress. The popularity of podcasts has been on a rise. 32% of the US population are listening podcasts monthly. (Winn, 2020) Gymshark already has gained 44,978 followers on their Spotify account so it could be an option to connect with the consumer in a different way.

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TIMELINE The given timeline is put together taking into consideration the different steps of the first year’s marketing strategy. Firstly, in January, a campaign will be launched on Gymshark’s social media platforms. The UK pop-up stores will also be launched at the same time as the campaign, therefore leaving time for customers to take part in a guess-and-win giveaway in which five cities the pop-ups will be taking place. Two weeks prior to the first store, the locations will be launched. In each country, a store remains at its location for two days. In January, the podcast series will also be launched.

There will be one episode every two weeks.

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COMMUNICATION TIMELINE Canada pop-up stores

JAN

FEB

Start of the social media campaign

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APR

Canada store promotion, direct mail to lapsed consumer

USA pop-up stores

Germany pop-up stores

MAY

JUN

Germany store promotion, direct mail to lapsed consumer

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AUG

SEP

USA store promotion, direct mail to lapsed consumer

UK store promotion, direct mail to lapsed consumer Podcast episodes to promote the pop-ups and give the consumers another way to engage with the brand

Measurements

OCT

NOV

DEC

2022

2021

UK pop-up stores

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FINANCE The given budget for the communication strategy is 300 000 GBP, from which this communication plan will cost 142 000 GBP. The largest expense is direct mailing to 70 000 lapsed customers. Resistance bands as gifts would be 75 000 GBP for 70 000 consumers, but it remains uncertain until the consumers confirm their attendance. 16 billboards in all locations for 2 weeks are calculated to cost 16 400 GBP. The production of the podcast is the lowest cost, calculated to be 1600 GBP. A promotional video will be produced in-house.

Calculating with the average garment cost being 32 GBP and cost of sales 5 GBP, the profit of this campaign will be 325 100 GBP. It is expected to rise higher when consumers stay loyal to the brand and continue purchasing from Gymshark. 45% of the survey respondents purchase activewear three or more times in a year, 35% twice in a year. From these measurements, it could be drawn that the demand for buying workout clothing is high.

MEASURING The direct mail contains a ‘Come and collect your prize’ note, which makes it easy to measure how many customers have received the letter and are influenced to attend. A follow-up direct email will be sent out as well so that it would be possible to confirm their attendance and gift. Podcast episodes are measured by how many times people have listened to them, the separate #TalkAboutProgress can be used on social media posts to express any other thoughts on the podcast topics. Social media campaign can be measured by social media statistics, the amount of likes and comments and the usage of #TouchdownGymshark. .

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CONCLUSION In conclusion of this report, after careful consideration of the applied marketing models, trend and primary research, it could be said that Gymshark has great growth possibilities and facilities to achieve customer loyalty. Applying the strategy of pop-up store trailers in the United Kingdom, United States, Canada and Germany will be successful as the brand needs to be brought closer to its consumer. In order for the store experience to be successful, a carefully considered communications plan will be applied. A social media campaign with the hashtag #TouchdownGymshark will start in Janurary 2021 with the aim to inform consumers about the upcoming pop-up stores. Website and app development will be done to support seamless customer experience as well as sustainability and transparency will be taken into consideration. A loyalty scheme will be worked out to say thank you to loyal consumers. By applying the recommended marketing strategy, Gymshark succeeds in reactivating lapsed consumers and helps to retain them.