Essay on Gymshark

Gymshark is an accessories brand and fitness apparel. The company develops and distributes diverse fitness wear. In the UK, the company was named the rapidly growing corporation. Gymshark products are available in more than 180 countries through its website. Due to its aggressive expansion plans, the company opened an 8,000 square foot office in China and also sold a 21% stake to General Atlantic, a US private equity firm, to meet their expansion goals. Social media influencers are major marketing strategies for the company since its brands are well-known on social media platforms. With over 5.1 million Instagram followers, the company lacks brick-and-mortar stores and is focused on e-commerce. For Gymshark, the industry seems favourable since its sales have been growing; however, different trends and uncertainties may affect the industry, thus impacting revenues (Muir, 2020). A scenario analysis would be helpful in planning business strategy and making better decisions, by challenging future assumptions. TOWS analysis would also enable Gymshark to match external opportunities with internal strengths and emphasize on those which can bring business success.

Scenario Analysis

In the current global pandemic, the distinction between casual wear and traditional gym clothing has become less noticeable. The athletic and wear industry is providing more options to enable consumers to transition between exercise and leisure easily. The trend has been named athleisure and comprises hoodies, sports bras, tank tops, jogger pants, and yoga pants. Wearers want to trim down their wardrobes and buy essential apparels that can be worn in various contexts. In the next 24 months, the yoga culture is expected to grow in the industry, as seen in the previous year whereby it grew by 42% through the sale of yoga-related wear (Linchpin, 2021). Customers are showing interest in a variety of colours like beige, light blue, and baby pink. Pastel colours demand is extending past yoga clothing to the athletic apparel sector as consumers continue to dump traditional white and black colours. Moreover, technological trends for smart clothing and personalization can enable companies to offer more smart clothing and customization to customers. Most customers will have the opportunity to customize their products on online platforms. Smart clothing trends are major developments that allow wearers to watch their wellness and health (Linchpin, 2021). Technology in clothing production is being utilized in making better recommendations that meet the needs of consumers.

90s influence is also coming back in the industry after the athleisure trend emerged. The 90s wear has been deemed to have a nostalgic appeal on millennial consumers. Breathable and lightweight leggings and crop tops with twists on classic designs among women have begun seeing increased interest (Linchpin, 2021). Athletic corporations are experimenting with irregular and oversized wear for men. Besides, flashy track jackets and hoodies sporting large logos are regaining popularity. Sustainably sourced apparel demand is on the rise as wearers become increasingly environmentally conscious. Demand for transparency among customers on how wears were produced and other sustainable clothing demands are rising. Companies in the industry have begun using non-toxic, low-impact dyes, and recycled polyester; for example, Reebok highlights different sustainable wear produced with organic cotton (Linchpin, 2021). More size inclusivity is another trend whereby athletic wear companies are shifting and developing wear that can suit customers across different clothing sizes. Companies are being challenged by consumers to show commitment to inclusivity and diversity. Due to global increased awareness about diversity and inclusivity, the trend is likely to more prevalent in the industry in 24 months to come.

Different uncertainties facing the industry include changing consumer behaviour which is highly likely. In every business, the consumer is always the king. Today, consumers are well aware of apparel trends due to internet and media exposure (Martinez, 2019). Since consumers are adaptable to shifting fashion trends, it may be hard for Gymshark to keep up with such demands in future. Fast fashion has also become another uncertainty in the industry as consumers have become frequent shoppers for apparel. More designs flood the market every other time due to increased disposable income. Other international brands may force Gymshark to adopt a business model which ensures it keeps up with such fast fashion trend. Due to stiff global competition, it may be hard for Gymshark to stay upbeat with increasing demand and heavy competition from global brands. Digitization in the apparel industry may see a downfall since companies fail to quickly adopt emerging technological advancements (Martinez, 2019). Industry players develop innovative concepts which fail to grow. However, consumer choices and behaviours are shifting, and the digital mindset may be what Gymshark requires to keep up with the competition. Digitization is a highly likely uncertainty since innovation happens daily.

A hot-cold uncertainty is more power to competitors in the industry. However, such may not be bad news for Gymshark as emerging markets like Africa, Middle East, and Latin America is expected to continue growing. China brands have increasingly become problematic in the apparel industry. Even though the uncertainty is low, it remains a threat to Gymshark. China continues to provide exciting and incredible expansion opportunities for industry players (Martinez, 2019). However, Chinese companies are much more sophisticated as time passes, and this has proven challenging to international brands. As a result, it cannot be predicted whether Chinese firms will continue posing more threats in two years to come. Companies should stay more alert and extremely cautious with regards to monitoring possible frictions between emerging markets and developed economies (Martinez, 2019). Due to another potential case of recession during the coronavirus pandemic, Gymshark should create contingency plans and resilience guides to mitigate trade tensions, geopolitical and macroeconomic instabilities (Muir, 2020). The uncertainty is highly likely if the world does not find a solution to the present pandemic sooner.

Shifting consumer choices and behaviours is one of the uncertainties which impact the athletic and wear industry. Consumers always shift with current trends in fashion brought by factors such as digitization and innovation in the industry. For example, Chinese brands strive to offer new exciting brands frequently. Besides, such brands are relatively cheaper compared to other industry players. Since consumers have unpredictable and sophisticated purchasing patterns, this uncertainty can adversely impact Gymshark in near future. Moreover, new designs swamp the market more often and lure consumers to shift their focus on such enticing designs. If other interesting designs emerge, consumers will shift their focus. Their unpredictability is therefore a significant business threat. Digitalization is also another essential uncertainty since technology keeps shifting almost every day. Industry players are required to keep up to remain competitive and offer exciting wear to customers. Suppose technology in the apparel industry shifts rapidly, it would become hard for Gymshark to keep upbeat. However, the company is uncertain which major technological development in the industry would arise. Even with small inventions, industry players normally have a huge budget for technology investment. Therefore, digitalization presents a challenge as it may significantly affect cash flows. If not adopted and major market players do, Gymshark may lose competitiveness.

 Table 1: Showing scenario analysis

Table 1 above shows how two different scenarios can affect Gymshark in the worst-case scenario, changing consumer behaviours can result in adverse impacts like loss of revenue and competitiveness. The scenario is more likely to occur in the athletic and wear industry as consumers are perceived as unpredictable and complex in their purchasing behaviours.

TOWS Analysis

Table 2: Showing TOWS Analysis

S3O3: boost e-commerce presence by creating mobile applications.

S3W3: ensure continuous product development and differentiation to sustain competitiveness.

W1O1: develop expansion plans to other markets like US.

W2T1: keep up with recent trends to mitigate shifts in consumer choices and behaviour.

Implication

Gymshark should now focus on predicting consumer trends and develop resilience measures. Resilience measures may include having enough financial resources to keep up with changing market trends in the athletic and wear industry. Based on the scenario analysis, it is highly likely the industry would be affected by changing consumer behaviours. Further, TOWS analysis shows Gymshark is limited to some markets like the UK. As a result, it should set up expansion Plans to other emerging and developed markets like China and the US.

References

Linchpin, T. (2021). Trends Shaping the Athletic Apparel Industry Outlook For 2021. Linchpin SEO. Retrieved 15 June 2021, from https://linchpinseo.com/trends-athletic-apparel-industry/.

Martinez, J. (2019). Top 10 challenges facing fashion in 2020. FashionUnited. Retrieved 15 June 2021, from https://fashionunited.uk/news/fashion/top-10-challenges-facing-fashion-in-2020/2019123046802.

Muir, L. (2020). Spotlight: Gymshark Strategy Considerations | Lucidity. Lucidity. Retrieved 15 June 2021, from https://getlucidity.com/strategy-resources/spotlight-gymshark-strategy-considerations/.