The UK brand Gymshark has reached unicorn status, after an investment deal with global growth equity firm General Atlantic brought its valuation to over $1 billion.
With General Atlantic taking a 21% stake in the business, founder Ben Francis is increasing his own stake to over 70%. According to reports, the deal will enable Gymshark to further its global expansion, particularly in the North American market where it has already built a substantial audience.
At a time when most retailers are struggling to stay afloat, Gymshark’s recent success is further evidence of its effective brand strategy, which is rooted in a shrewd understanding of its target audience.
As the impact of the coronavirus has shifted consumer behaviour, Gymshark has also proven its ability to adapt and evolve. According to the FT, Gymshark’s full-year revenues to July 2020 reached £258m – up from £176m in 2019.
A DTC model that capitalises on surge in fitness interest
The coronavirus pandemic has hit many clothing retailers hard, with long-standing high street stores including John Lewis, Topshop, and M&S announcing big job cuts. At the same time, the surge in online shopping has meant that many digital and direct-to-consumer retailers have seen an increase in demand, particularly in specific categories such as loungewear and fitness apparel (as well as groceries). In May, the proportion spent online reached a record 33.4% in the UK.
Gymshark was arguably well-equipped for the coronavirus pandemic, with its direct-to-consumer model perfectly poised to facilitate a surge in interest in fitness clothing, fuelled by people exercising from home. The brand doesn’t have much of a brick-and-mortar footprint, with just one pop-up activation in London being forced to close as lockdown began.
During the pandemic, Gymshark doubled down on digital content, largely built around its digital PT (personal trainer) program which allows consumers to access workouts at home. Speaking on ‘Marketing and Machines’ – the podcast creating by Marketing Week, Econsultancy, and Creative Review – Niran Chana, Gymshark’s CCO, explained how the brand quickly responded. Chana said: “Everything shifted pretty quickly to a community-focus. We made a decision early on to say that we are not going to buy ourselves out of trouble, or turn into a sales-orientated business overnight.”
Alongside its PT program – which gave a wider pool of personal trainers a profile on its social channels – Gymshark re-focused efforts on its Conditioning app, which offers users a wealth of content based around wellness and training.
In order to capitalise on surging interest in its brand, Gymshark also deployed its products into relevant and accessible collections, such as ‘home comfort’ and ‘home workout’.
Chana also states that the brand is proud to have upheld its commitments to suppliers, unlike many other retailers who were forced to delay or suspend orders. “We didn’t cancel out any inventory.” he said, “We made some bold statements as well where we invested in more inventory during Covid, to ensure that we are well covered in seasons to come.”
A focus on data (and changing consumer behaviour)
One of the biggest shifts in consumer behaviour due to Covid has been the scale of people who are now buying online, with over half of UK adults expecting to visit physical stores less frequently than they did before the pandemic.
For Gymshark, this has meant that the brand’s traditional target demographic has changed, with its former niche audience of 16 to 24 year olds expanding to the over 40’s, and overall, a larger percentage of people who are traditionally ‘brick-and-mortar shoppers’. In turn, this as led to the company shifting to more of a data-driven mindset, with data and analytics helping the brand to understand its newly acquired audience, as well as to develop a strategy for how to target and engage both new and old customers.
As Chana explains on ‘Marketing and Machines’, Gymshark made the decision to appoint a Chief Data Officer, with the aim of making data more prominent within the business, impacting everything from customer retention strategies to merchandising. “We have always been a brand-first, social-first – almost a sense of just winging it in terms of making data-centric decisions.” he continues, “We now have a data team in a very centric position. It will be one of the biggest functions of Gymshark alongside tech and product teams over time.”
In order to make sense of the customer data it gathers, Gymshark uses Analytic Process Automation (APA), which enables the brand to speed up its data processes in order to make critical decisions. One example of APA’s functionality is its ability to determine the best locations for Gymshark’s pop-up stores, which it does based on customer data such as app engagement and spending levels. As Fast Company states: “Just a few years ago, crunching that data took 14 days—an eternity in the fast-paced world of online retail.”
Organic social media engagement & new platform success
Social media has always been crucial to Gymshark’s success, with organic engagement largely fuelling sales. For the period of Q4 2019 – from November through to January – over 50% of the brand’s traffic came from organic and direct channels (rather than paid social or email).
With social media usage rising since lockdown, Gymshark has capitalised on this with increased social activity. One initiative that generate a good amount of engagement was the ‘Sweat for Your NHS’ campaign, which involved the brand donating 5% or every ‘sweaty selfie’ shared on social media. The campaign went on to raise a total of £180,000, as users were naturally inclined to contribute to a good cause.
Elsewhere, the brand has also capitalised on the growth of TikTok, with the brand generating one million followers in record time (when compared to other social channels such as Facebook).
Much like Gymshark’s huge Instagram presence, this success has largely been down to influencer involvement, with the brand partnering with both micro and macro influencers to generate interest and engagement on the platform.
@gymshark Let’s get it! 2020 here we go ???? @demibagby #goforgold #gymshark #gymshark66
♬ Memories (Drinks Bring Back) – Ajay Stephens
TikTok was also part of the mix for last year’s Gymshark66, which is the brand’s seasonal campaign, which involves participants forming positive lifestyle habits within 66 days (starting from New Year’s Day). According to reports, the campaign reached a total of 19.8 million fans on TikTok, with the hashtag #gymshark66 receiving over 45 million views. This is testament to the level of investment Gymshark’s audience has in the brand and its influencers, with the campaign generating huge reach despite TikTok’s relative infancy at the time.
Will Gymshark lean into live commerce in future?
While social media (and influencers) have been the driving force of much of Gymshark’s success, the brand also recognises that its strategy of being a ‘brand over a retailer’ brings up certain challenges, particularly when it comes to conversion through social channels. This is particularly the case with live streaming – a trend that has been hugely successful in driving the growth of social commerce in China.
On the ‘Marketing and Machines’ podcast, Chana agreed that live streaming could be part of Gymshark’s future social marketing strategy, but that with this type of content, there are hurdles to overcome in terms of getting customers to convert. This is largely to due with difficulties in converting a live engagement (on something like a workout video) into a sale. As Chana says, “it’s a hard one to blend in without looking too pushy or too salesy.”
Indeed, with Gymshark’s success with influencers proving to be much more organic – typically based on long-term relationships and natural brand affinity – asking consumers to suddenly ‘click to buy’ could feel off-putting and – taking into consideration Gymshark’s strategy up until now – quite off-brand. With that said, as long as Gymshark continues with its customer-first approach, its impressive success is sure to continue, regardless of how its social strategy evolves in future.
Gymshark looks to the US and APAC
Thanks to its new partnership with General Atlantic, Gymshark is firmly setting its sights on US growth, with a new office in Denver as well as distribution centres in Ohio and California. This will allow the UK team to re-focus on Europe, while General Atlantic also puts in place further plans for APAC.
It’s an impressive growth story that not even founder Ben Francis envisioned, at least not when he first started Gymshark in his parents’ garage, back in 2012.
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