This scenario is far too common for people looking to purchase workout clothes, most commonly referred to as “athleisure.” 

Athletics Meets Fashion

Athleisure is apparel that is meant for athletic activities but can also be worn casually. The idea is that this type of clothing fits inside and outside of the gym, and a person won’t look out of place wearing it on the treadmill or at social events. Some common athleisure items are yoga pants, leggings, tank tops, sports bras, jackets, and more. 

The rise in popularity pushed companies to begin researching and experimenting with the materials to make athleisure what it is: versatile. This meant a rise in production costs and thus, a higher relative price. 

Is it “worth” spending a lot of money on clothes you are meant to sweat through?  

How do athleisure brands enhance willingness-to-pay, perceived value, and loyalty? 

Trust The Process: Innovation and Category Creation

Consumers have to think about the process athleisure goes through to live up to its purpose. 

How are they made? What kind of technology is used? 

Part of the reason why Lululemon has been able to differentiate is because of their innovative process in experimenting with different materials (nylon, Lycra, spandex, elastane) in order to make something that is both functional and versatile. Interestingly, Lululemon has a “whitespace lab” in Canada which consists of exercise machines, humidity controlled chambers, and even dunk pools to test the durability of Lululemon apparel.

If you think about it, this is a good thing. You want your athleisure to hide your sweat, smell, and keep your internal body temperature balanced. The athletic brand, Vimmia, promotes something called “thermoregulation” which regulates your temperature depending on your surroundings. This technology and innovation makes athleisure versatile for any situation. This means you can comfortably walk into the grocery store right after your workout without looking (and feeling) out-of-place. The innovation, style and fit has created a new category of clothing with its own perceived value.

Building Pricing Power 

Part of the reason why athleisure is able to maintain its pricing power is because consumers find relative value that goes beyond just product features. 

Once you purchase high quality athleisure products you acquire a sense of status due to the brand recognition that goes along with it. 

Athleisure companies have built brands to connect with consumers through product and emotion. Instead of performance like traditional athletic wear brands, athleisure connects consumers with a lifestyle that is aspirational and self-aware. These brands have tapped into the emotional connect one finds in boutique fitness (think SoulCycle), sneakers (think Yeezy), and exclusivity (think Supreme). 

This brand identification has created pricing power for athleisure companies, commanding premium prices relative to traditional athletic clothing, but also tapping into new segments of the market.

Extend The Value Proposition 

Brands have begun to take the feeling of community to another level. 

For example, Gymshark specifically turned to social media fitness influencers. They converted many into something they called a “Gymshark athlete” which is similar to being a brand ambassador for the company. The athletes are responsible for posting on their social media to raise brand awareness by trying on some of the free products they’ve received, answering customer questions, and posting their workouts in their athleisure. This helps boost sales influenced by the personal connection between the consumer and brand. 

Gymshark went further by creating expos, or Gymshark meet-ups, where consumers could meet their favorite athlete. When the company expanded, they created an “expo world tour” where people could now buy tickets to see select influencers. This kept the idea of a community but added exclusivity in the mix by making it available to a limited amount of consumers. Not only that but Gymshark is great about posting free workouts to their social media as well as reposting consumers’ posts when they tag Gymshark. With this in mind, consumers feel valued making them more likely to continue to purchase from them. 

Find Market Gaps 

The rise of athleisure has created subsegments in the market that includes those that have different willingness-to-pay. These gaps in the market create opportunities for competitors to come in and address the needs of those consumers especially because of relatively low barriers to entry. 

This competition give customers an alternative to more expensive brands. For example, the brand “Colorfulkoala” on Amazon has thousands of 4-5 star ratings. Interestingly this brand is classified as a “Lululemon dupe” because of the high quality but without the logo and price point. 

Another competitor, Fabletics, uses star power (the brand was founded by movie star Kate Hudson) and a different business model to differentiate from other brands. Fabletics is a subscription-based brand offering inexpensive athleisure with leggings selling for as low $40. Fabletics often runs sales where consumers can receive 2 pairs of leggings for only $24. 

The reason Fabletics is able to position its products at lower price points is due to its “no-waste” model. Since the brand is based on a subscription, the no-waste model means that only what is demanded is produced. Using the subscription to their advantage, members are guaranteed to visit their site monthly to purchase. Fabletics Vice President Felix de Toro claims that demand can be predicted with 95% accuracy. Fixed costs are reduced because of this, and Fabletics can consistently offer their members high quality products at affordable prices whereas their competitors markup their products to make up for waste they’ve produced. 

Final thoughts

Building a new market requires several key components, one of which includes understanding the drivers of price and willingness-to-pay. 

Athleisure brands have done an incredible job in creating a market valued at more than $155 billion globally. 

The expansion of the athleisure market has created growth opportunities for new brands to enter using differentiated pricing, business models, and value propositions (linked to pricing). 

While technology and innovation in the use of material has contributed to the value driver, athleisure companies have gone beyond to expand the value proposition – and the price opportunity – to connect and retain loyal customers. 

What has been central to the success of so many athleisure companies – and important lessons companies from other industries can learn from – is the keen understanding of their customers, what they value, and how to package product and pricing that resonate with them.

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The post Enhancing Willingness-To-Pay: Lessons From Athleisure appeared first on HelloAdvisr.