How Activewear is Outperforming Wider Retail

Apparel retailers have recently had their own "year without a summer" as the outbreak of the pandemic sweeps through their industry and ripples around the world.

Sales in discretionary retail have been particularly hard hit, with many consumers resisting new summer clothes. UK clothing sales fell by more than a third in March 2020. That terrible summer saw many familiar clothing brands disappear from the high street, including Laura Ashley and Cath Kidston, and most retailers ended the year in the red.

Sporting goods brands have also underperformed this year, but such apparel and related merchandise have outperformed many other types of apparel retailing.

Sports equipment such as bicycles and digital fitness technology performed particularly well in a tough retail year. Perhaps unsurprisingly, gear related to non-contact or low-contact sports appears to be the most popular. This includes gear for home workouts, cycling, and running.

The athleisure trend continues to be strong, and competition in this space is becoming more intense as fashion brands continue to enter the category. When we talk about activewear, athleisure is increasingly what we mean because this subcategory of activewear is huge right now.

Even as retail continues its shaky recovery, the athleisure category remains strong. The global athleisure market is worth approximately $330 billion this year and is expected to grow at an annual rate of more than 6% through 2027.

The Asia Pacific region is the fastest-growing market, with strong growth momentum expected in India and China. North America remains the largest market, but China is expected to overtake it soon. Many vendors are focusing on this category of apparel, trying to tap into the growing trend and appeal to a younger audience who seem to prefer athleisure the most.

Activewear may be seeing slightly better days compared to other retail categories, but brands in this space are still affected by the same challenges as retailers of other types of merchandise. The collapse of supply chains is just one example.

Brands also face workforce challenges, with employers feeling the impact of employee absences due to COVID-related illnesses and the displacement of key workforce demographics such as student part-time retail employees.

Counterfeiting remains a problem plaguing the wearables market. Counterfeiting of sportswear merchandise could also become an issue as sought-after brands enter the sportswear market. Brand protection group Red Points estimates that half of consumer sports spending during the lockdown was spent on counterfeit goods. Much of this spending is intentional.

Sustainability is increasingly important to consumers, and brands are constantly challenged to justify their sustainable credentials. There is also now increasing pressure to consider parts of the consumption process that were previously outside the remit of brands, such as what happens to products after they are no longer used.

Around the world, many markets are considering legislation to force manufacturers to dispose of consumer waste, rather than expecting taxpayers to foot the bill. This puts extra pressure on manufacturers.

The fact that many other brands specialize in activewear, especially athleisure, adds a certain level of pressure.

Many of the top global brands are devoting resources to launching new products, promoting new athleisure categories, and generally trying to enter and own the space strongly. This has intensified competition at both ends of the pricing spectrum and put increasing pressure on brands to differentiate.

Conversations and social changes around gender are taking place in many markets, especially in the West, and this has implications for clothing and how it is marketed. This looks like it will be a long social evolution.

Many brands are adopting more relaxed social dressing styles and trends, such as unisex fashion. Despite this shift in gender perceptions, gender differences in the activewear market are stark. About 60% of the sportswear audience is women.

The traditional sportswear market caters almost exclusively to men, which pretty much means clothes to wear while exercising.

The "spin-off" category of this market, which includes products like athleisure and activewear, is geared more toward women. Before the pandemic, women's activewear sold five times as much as women's traditional activewear. New categories in sportswear tend to target women in particular, and any innovation is focused on appealing to this group.

Athleisure is also a generational interest: 65% of all athleisure products are purchased and used by teens, tweens, and young adults. It's class of wearables that are being driven especially by millennials. Perhaps this is not surprising. This generational group includes most young working-age adults and most parents, and they tend to be the biggest buyers of any type of clothing anyway.

But we know that younger consumers tend to be more health-conscious, enjoy activities like yoga and the gym, and are generally interested in wellness. This attitude drives the athleisure market.

Their interests in sustainability also overlap. Sustainable activewear for men grew 65% in 2020. This year has proven to be particularly critical for consumer interest in sustainable consumption, with this year's event boosting sales of more sustainable products. Another increasingly important consumer value is inclusivity. Brands need to be mindful that audiences have expectations of how their products will be marketed in terms of larger body sizes and more.

We know sportswear fans seem to be digitally savvy. Mobile research and e-commerce are particularly beneficial for this category. Social media and influencers on the channel have driven athleisure. This is an excellent way for brands to reach audiences and increase awareness.

It’s also the preferred channel for customers seeking customer service communication, and your brand needs to be on top of customers’ preferred social media platforms in every market (and every language) you operate in.

We also know that 44% of activewear buyers prefer to shop in-store. That's why many of the top retailers in the category, including No. 6 Lululemon in the world, are investing heavily in the retail experience.

Despite booming online sales, the in-store experience still matters.

Sportswear in Asia Pacific is considered likely to grow at a healthy growth rate of 7% over the five years to 2024.

Much of this market is currently dominated by North American sports brands Adidas and Nike, but there are also significant local brands. In China sportswear, especially athleisure, looks set to follow a normal trend shift: adoption from influential Tier 1 cities to smaller, less affluent cities in Tier 2 and Tier 3.

Fitness is a growing trend in China, as is posting on social media and taking part in activities such as yoga in sportswear.

India has also developed a strong interest in sportswear, which has grown steadily over the past decade. Sportswear is now outperforming wearables in many other categories, including fast fashion, and local brands are emerging that cater to local tastes and cultural expectations.

It's driven by influencers and embraced primarily by young adult consumers, growing with participation in activities like yoga and running. It was held back slightly by a lack of specialist sporting goods stores and the challenges of sourcing suitable materials locally. India rarely keeps up with global fashion trends, but athleisure seems to be an exception.

Like the rest of the world, athleisure is more of a lifestyle and a way of self-expression than just a clothing trend.

For brands looking to appeal to these huge Asian markets, it's important to remember that athleisure is a form of self-expression. It is important to understand local concepts of femininity, modesty, and consumer expectations of performance.

For many consumers, this may be seen as a very westernized way of dressing, which they may need to coordinate with their own cultural expectations. Consumers in these markets are keen to live a modern lifestyle focused on self-actualization and health, but they may do so from a very different perspective than domestic market consumers. The way your brand communicates lifestyle aspirations must be carefully tailored to these specific markets.

The above has introduced the impact of sportswear on the retail industry. If you want to order sportswear, please contact us.

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