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Gymshark vs Lululemon: Challenging the status quo of the sport apparel industry

Updated: Feb 3, 2022

In this first edition of "Battle of the Brands", we take a look at Gymshark and Lululemon, two brands that are transforming the sport apparel industry. Our focus will be on analyzing how they are executing their “go-to market” strategy so you can extract lessons that you can then apply to your own business.

The sport apparel industry: Projected growth for years to come

During 2020, despite the events related to Covid-19, the sport apparel industry was able to achieve around 4% growth vs 2019 and, based on the forecast by Grandview Research cited in this Front Office Sports report:

"The athleisure market is expected to grow to $549 billion by 2028 at an 8.6% compounded annual growth rate. For context, the functional food and beverage space is anticipated to reach $529 billion during that forecasted period while the global virtual event space is expected to reach $509 billion."

Athleisure market size projection

In 2018 / 2019, the industry reached revenues of $181 billion with the leading brands, Nike & Adidas, representing 35% of the market between them. 2020 has been a challenging year for both organizations, although Nike has been able to navigate through the storm much more effectively thanks to a fantastic transition into becoming a D2C focused brand, which currently represents 33% of its business according to eMarketer. Nike achieved sales figures of $37.4 billion ( “only” a -4,6% vs 2019) while Adidas revenues were $19.9 billion (a decrease of -19% vs 2019).

Meanwhile, Gymshark & Lululemon have emerged as relevant challenger brands in the category as proven by their remarkable results. Gymshark achieved sales of almost $360 million and is currently selling in more than 170 countries. Meanwhile, Lululemon reported 2020 sales of $4.4 billion, which is an 11% increase vs the previous year which clearly defines it as one of the “winners of the year” in the sport apparel industry.

Lululemon´s 2020 was also marked by the acquisition of “Mirror,” the connected fitness equipment business, which enables the brand´s expansion into the “at-home” fitness realm. So far though, it seems the integration between both brands is not going as smooth as it was thought it would be and Mirror is struggling to meet revenue expectations so far, although there may be a different story to tell in the long term.

In terms of international presence, Lululemon “only” has 140 stores outside North America (27% of the 515 stores it operates) and international revenues account for about 14% of the total revenue figure. Their current CEO though, believes the group can achieve a 50% split in this regard and looks to open up more international stores in the upcoming year.

Both brands, as we will see below, have been able to sustain their growth on top of, among many other things, the quality of the product, successfully defining & engaging with its target customers across different channels and creating content that is highly meaningful to that target.

In this analysis, we focus on the following elements:

Battle of the Brands Framework: Lululemon & Gymshark

Introduction to the brands: Sport apparel for fitness & yoga enthusiasts

Gymshark was founded in 2012 and it is a sports apparel brand that sells clothing to “fitness fanatics.” Founder Ben Francis explains, in this Esquire article, how he came about to the idea for the brand:

“It wasn’t particularly strategic, it was just me and some friends thinking that no one else was making what we wanted to wear. At that time, in the early 2010s, the American style was a big, baggy, boxy fit, while the European brands were more ‘fashion’, instead of functional. So we morphed those two worlds together. I wanted to make nice, stretchy lifting wear that accentuated your physique and made you look good in the gym.”

Gymshark Fitness Apparel

The brand is mainly known for selling apparel & accessories for both men and women, but it also offers basic home workout equipment (mainly powerbands) and a training app that has just been made fully available for free on Android and iOS. In 2020, it accomplished “unicorn” status after being valued at $1.3 billion following an investment from General Atlantic.

Lululemon on the other hand, which was founded in 1998, sells yoga-inspired apparel for both men & women. The brand has become one of the "faces" of the industry and perhaps, the most significant strategic move it made during 2020 was the purchase of Mirror, the “at-home” connected fitness brand, for $500 million.

Lululemon Yoga Apparel

Target market: Gymshark & Lululemon know very well the niches they go after

This is perhaps the reason we actually decided to write this post; understand how two brands have been able to succeed this much by focusing, almost obsessively, on a very specific niche of customers.

Gymshark´s target audience consists mainly of men and women aged between 18 and 25 whose passions are primarily fitness, fashion and music. Honestly, you can get a sense of “who” the target is by looking at any promotional image they share, such as this GIF:

Lululemon is also a prime example of a brand with a well defined target market. In their case, they look to sell to people who are passionate about practicing yoga, as picked up by The Content Spa:

“Our primary target customer is a sophisticated and educated woman who understands the importance of an active, healthy lifestyle. She is increasingly tasked with the dual responsibilities of career and family and is constantly challenged to balance her work, life, and health. We believe she pursues exercise to achieve physical fitness and inner peace.“

While initially they focused on women, truth is that they have also launched a men's collection, given their increased interest in this activity. In fact, the company aims to increase menswear sales to $1.4 billion by 2023, as reported by the Financial Times.

Once again, a quick look into any of the brand´s images on the web helps understand quite well who they are selling to:

Clearly defined pricing strategies tailored at their target markets

Lululemon is a premium brand that sells its leggings (their most recognizable product) for about $120. Moreover, it rarely offers discounts / promotions, as a tactic that reinforces its premium image.

Gymshark on the other hand, given the younger audience they initially target, look to offer more affordable prices for their items; the average price of their leggings stands at around $55. Similarly though, they follow a similar policy in terms of discounts; they hardly offer any except on major retail events such as Black Friday.

Distribution strategy: Leveraging the eCommerce momentum

While Lululemon can be considered more “brick & mortar” than Gymshark, the truth is that it has been able to develop a robust eCommerce as well. In 2020, as a result of the trend towards increasing online sales, it was able to double eCommerce sales (which was actually their 2023 objective…), and in the final period of the year alone, the channel represented around 43% of the group´s total sales.

This does not mean though that they have abandoned their brick & mortar strategy. In fact, they consider opening up new stores as a critical driver of their international expansion as we mentioned above. Specifically, the brand hopes to open around 40 to 50 new stores in 2021 with a strong focus on China, Japan, South Korea and Australia.

Lululemon has embraced “omnichannel” as a pillar of the strategy of the business. As picked up in this Forbes article, the company looks to include elements such as “virtual waitlists, mobile POS outside of store entrances, BOPIS at door or at the curb, appointment capabilities and online chat” as distinct elements to improve the overall customer experience. Moreover, we are eager to see how Mirror integrates into their physical stores. Will they organize events around the product in particular locations? Will some stores develop into a sort of “brick & mortar” gyms? In any case, we believe they have a great opportunity to enhance the “in store” journey, increase traffic to the store and ultimately drive greater sales.

Gymshark on the other hand, was born as a pure online player and is actually pretty “bullish” on the D2C model, having even rejected proposals from major retailers, as Ben Francis explains:

“What we’ve built is a community-led, purpose-driven, direct to consumer model, it’s where the future of brands will go. We’ve had some massive retailers put huge orders in front of us. We could be twice the business, but we said no every time, we feel like that model is outdated.”

While their revenues are primarily driven by the online channel, it is true that in February of 2020 it attempted to open up its first pop-up store in London, where customers could purchase the brand´s apparel but also enjoy workouts & classes that were actually free. Customers only needed to register and reserve their spot, which seemed like a fantastic method to acquire potential customers. We are curious to see if the brand attempts to carry out such an action in the future, once a “new post Covid world” is defined.

Content marketing: When not looking like an apparel company drives sales

Honestly speaking, Gymshark´s content strategy is one of the coolest we have seen. The first time we became aware of it, we must admit we believed it was a fitness brand sharing online workouts.

Their strategy evolves around creating highly visual content that is aspirational, educational (workout focused) and to some extent, "cocky." They have relied heavily on influencers to generate awareness among younger audiences ever since the very initial phases of the business in 2012 / 2013. Francis explains it like this:

“We were watching fitness YouTubers at that time, so we decided to send some T-shirts, shorts, hoodies to them, not because we wanted anything, but because we thought it would be cool if they liked it.”

Today, Gymshark has over 10 million followers around the world across the major social media platforms like Instagram, Tik Tok, Facebook, Youtube, Pinterest and Twitter.

As we mentioned, their organic content strategy is brilliant and here are a few examples of how they execute it.

As you can notice, it is aimed at a very specific audience, it has a clear “brand voice” and it looks to create value for potential customers by offering gym workouts & exercises for people to perform instead of focusing just on pushing product sales.

Not only that, they adapt quickly to the context which is a key to success. Proof of this is when, during the lockdown caused by the Covid pandemic, they changed the names on their social media channels to “Homeshark” and even started developing “at-home” workout type videos:

Similarly, their paid media strategy is also brilliant. But don´t take it just from us; Facebook applauded their campaign generation efforts and the use of lookalike audiences back in a 2018 investors call:

“They target with lookalikes [audiences] people who had previously purchased and custom audiences of people who had started but didn’t complete the purchase [process] and they saw a 9.3 times return on investment for the two week holiday period.”

And if you want a deeper dive into Gymshark´s Facebook paid media strategy, take a look at this fantastic review by Charlie Lawrence analyzing just that:

All in all, Gymshark knows very well who they want to sell to, are consistent in their brand communications and all its content is successfully designed to engage with its community of followers while being able to adapt to the particular formats of each channel.

Lululemon is precisely another great example of “community-based” marketing. We only need to take a look at their “This is Yoga” campaign to realize how they look to engage a global audience of people passionate about Yoga, but making sure to transmit that it is something that it is present across all aspects of life.

In general terms, the brand also delivers consistent brand communications and essentially, all its publications “breathe” Yoga. They have successfully positioned themselves around certain content territories including Yoga, Sweat (which is present across #Thesweatlife and even their “Sweat Collective” loyalty program), and so on.

Traditionally, the best example of their community marketing efforts were the organization of Yoga classes in selected stores / locations which then were used to feed their social media channels, which include Twitter, Pinterest, Instagram, Facebook, and YouTube.

From the example above, we can notice a more "mature" angle to its content and aimed at an older segment of the population whose priorities are different in comparison to Gymshark´s approach. Again, it will be now interesting to see how they embrace Mirror and how they include it within their community marketing strategy. As noted in this article on SGB media, they have already begun to do so:

Community engagement initiatives will be added. A recently-added feature, Community Camera feature, allows members and instructors to see each other during the workout. A Face-off feature added in March allows two members to compete head-to-head during the class.

As we have seen, both brands rely and develop a strong content marketing strategy. It all starts with a clearly defined target, identifying the relevant content territories that will drive higher engagement, develop valuable content for them and sharing it in those channels where those potential customers are present.

The latest example? Gymshark has recently launched its own Twitch channel...a space in which they will share more “workout related” content aimed at those younger generations which are “hanging around Twitch.”

Looking into the future of Gymshark & Lululemon

In this section we will give our opinion on how these two brands could evolve.

By no means does this imply we have any type of “insider information,” far from it. The aim is simply to try to predict their strategic moves and further down the line see how well we did…

Gymshark: Looking to dominate the fitness apparel industry

Our predictions around Gymshark can be split into the following categories.

Growth opportunities for Gymshark

Similarly to what Lululemon did by acquiring Mirror, we would not be surprised if Gymshark entered into either a partnership agreement or even acquired its own connected fitness solutions. They better hurry though, as Lululemon has already announced the launch of a set of dumbbells and ankle weights that connect to Mirror...

Virtual Fitness: This may make more sense, especially if they have now entered the world of Twitch. The space is growing, it is still largely untapped and it could potentially engage much better with Gymshark´s target. It is true though that there is still not a virtual fitness “category leader” in this space as Zwift, for instance, could represent in the cycling realm.

Physical retail seems like pretty obvious given the pop up stores Gymshark has tested in the past. Besides, many digital pure players look to develop their own physical stores as a logical element that reinforces their D2C strategies.

This makes us believe that Gymshark could provide an enhanced customer experience if it decided to make these stores a combination of “stores” & “gyms” and become a sort of fitness operator. We basically are imagining Gymshark as the “Hard Rock Café” of fitness…

Another avenue for diversification Gymshark could be to become an online digital workouts platform to rival with the likes of Les Mills. They already have an app, they are posting workouts on Twitch /YouTube/ social media, and even if they do not monetize it directly, it could be another channel that drives people to their eCommerce.

Sponsorship: To be fair they have already entered this space and their best example at this stage is their partnership with Francis Ngannou, who became UFC Heavyweight champion in March of 2021. Given their success and the amount of exposure it brings, we would not be surprised if Gymshark took their sponsorship efforts to the realm of professional weightlifting, crossfit or other UFC fighters.

The final, and probably most obvious one, would be to increase its presence in new markets. At the end of the day, there are “fitness fanatics” in every country so the decision could lie, primarily, on financial and supply chain aspects.

Lululemon: After "owning" Yoga, leadership in sport apparel is now on the horizon

We already know that Lululemon is going to push its international presence and it has already entered with force into the “connected fitness” space. This does not mean though that it has tapped all the opportunities for new sources of revenue.

Growth opportunities Lululemon

Similarly to what we visualize for Gymshark, would it make sense for Lululemon to develop its own network of Yoga boutiques? Probably. Or at least, it could consider creating its own online platform for “Yoga inspired workouts.

This actually makes even more sense with Mirror, who competes, among many others, with Peloton, who, as we saw in this post in our blog, generates 20% of its revenue from users who only have a digital workout subscription rather than owning any type of Peloton equipment. We are pretty sure this could be “a way to go” for Lululemon; developing virtual Yoga sessions with the goal of driving sales towards the purchase of apparel or even, Mirror equipment.

Lululemon & Gymshark: Is a future together possible?

We decided to leave the "craziest" idea for the end of the post. Could it be possible to see a merger or even an acquisition between these two brands in the distant future? Or at the very least, a partnership of some sort between them?

It seems far fetched, we know, but numbers aside, it could have a strategic angle:

While the target markets seem radically different, it could ensure a higher LTV. Let us explain, on one hand, Gymshark customers at one point “grow old,” priorities change and they need new modalities of training to ensure longevity and performance, Yoga is a great option for that. On the other, it could be the case that Lululemon customers have sons & daughters that could potentially be Gymshark customers. A joint effort of some short could increase the average order from certain customers or drive more frequent purchases from them.

If these seems totally "off," think about what Disney did by acquiring Marvel or Lucas Films. It essentially looking to provide high quality entertainment to customers "for life."

In addition, there would be several synergies between both brands in terms of the type of content they create, maximize eCommerce related efficiencies or even strategies around connected fitness, physical retail, virtual fitness, etc.

Gymshark & Lululemon: Winning by being coherent in target and brand.

If we had to summarize the success of both Gymshark and Lululemon in one sentence, it would be that they were able to define a very specific group of customers to target, design a coherent business model and marketing strategy around them and deliver against the brand promise consistently.

In addition we believe they have the necessary elements to embrace the winning business model of the future, as described by Christopher Lochhead:

  • A digital service

  • Unique "in person" experiences

  • Physical goods

It will definitely be interesting to see how they deliver against that business model in the near future...

In the mean time, if your sport apparel brand is looking to revamp its marketing strategy and take advantage of the opportunities that lie ahead, be sure to get in touch and let´s shape the future together!

Keep safe.


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