Challenges in Athleisure Retailing

Despite being a growing industry, athleisure fashion is not out of its infancy stage yet. Supply chains of athleisure are not mature in all countries or regions making entering new markets challenging for big and small players. Globally, markets are limited and those markets are already dominated by a handful of strong players. Fashion brands and retailers intending to venture into the athleisure space in cities like Dubai, Abu Dhabi, Doha, Muscat, Riyadh, or any other big city in the Middle East should be aware of the nature of challenges in athleisure retailing. This blog discusses six dominant challenges encountered by athleisure brands and retailers.

Limitations in Value Chains

Athleisure is a growing industry but this growth is not even across all countries or regions. This has ramifications on the quality and performance of value chains. For example, the supply chain capabilities for athleisure businesses in Saudi Arabia may not be the same as in the UAE. Even if there is market potential and the right value propositions have been identified, a business model cannot take off if there are deficiencies in value chains. For instance, if there are no suppliers or sourcing platforms for athletic apparel brands, wherefrom would retail stores procure stock? If franchising opportunities are not available, retailers will have no option but to go as independent brands. Even if suppliers are identified from distant locations or athleisure franchise arrangements are possible, can such a business model be pulled off with commercial viability? There are other aspects also like the cost of commercial properties, availability of warehousing and logistical solutions, and ease of doing business that impact an athleisure business plan. The first movers have a lot of ground to cover because they are the first ones to pave the way into a market. This makes the market entry easier for players who come afterwards.

Market Positioning

Market or brand positioning is another challenge for athleisure brands and retailers. To begin with, most athleisure brands focus on a few select product categories. This restricts brands and businesses from differentiating themselves on the parameter of merchandising mix. Even if a brand is able to come up with unique product designs, the window of opportunity so gained is curtailed by fast fashion. Fast-fashion businesses can quickly replicate the hit designs of big fashion players and launch them in the market. Another concern for big players is the growing tendency among customers to prioritise value over brand. However, big brands have the advantage of popularity. The big players often overshadow the presence of MSME retailers for the latter to attain a significant position even in local markets. Coming to eCommerce, online fashion brands already face the challenge of validation. This challenge becomes more acute in the case of something as fresh as athleisure. These challenges partly explain the increasing demand for athleisure brand marketing and advertising services. For MSME retailers, getting listed on any popular B2B marketplace for athleisure manufacturers and retailers is also useful for gaining insights about markets, offerings, brands, and competition.

Harry Meeting Sally

True athleisure fashion is an expensive enterprise. Given that true athleisure is still a luxury makes doing business in this sector even more investing.  Significant research, studies, and investments go into designing genuine athleisure products. The amalgamation of fabrics and technology, as we know it today, is a relatively new branch of science. Coming up with true athleisure products is a multidisciplinary feat involving fashion design, fashion technology, and fashion business. Given the required volume of effort and investment, a big challenge for athleisure brands and retailers is finding the right value point for target customer segments. Products have to be designed keeping in mind the aspects of style and functionalities to meet the expectations of the target segments. The cost of creating a product with the desired values must also match the price expectations of customers. Even excellent products fail when accompanied by wrong price tags. That is a big problem with luxury products; it is difficult to determine the upper limits of value offerings and pricing. The issue of physical validation is already there for purely online fashion brands making it difficult for them to market premium products via online channels. Also, in the case of premium products, fashion brands have little scope to attract customers with offers and discounts. These are some of the reasons why expertise and precision in athleisure business model development are so important.

Parallel Competition

Two significant sources of competition for athleisure fashion brands and retailers are activewear and fast fashion. Activewear merchandise shares many similarities with athleisure products. For instance, a track pant designed for casual runners and joggers is not very far away from a track pant built for the same purpose but with a touch of vogue in it. Thus, it is easier for activewear brands and manufacturers to improvise product designs and fabrics and extend their offerings targeting the athleisure customer segment. Although this does not apply to products specifically designed for professionals the nature of similarities provides leverage to activewear brands and manufacturers.

The competition from fast fashion is even harsher. Fast-fashion manufacturers can imitate and launch similar-looking products (if not in terms of features and functionalities) in a short period. Such products are not ideal alternatives to true athleisure but there is a vast market comprising customers intending to look stylish without bothering about the benefits of true athleisure.

It is important for fashion retailers intending to offer true athleisure to be meticulous with their market and brand positioning, buyer personas, target segments, campaign strategies, market size, consumer behaviour, and elements of business models.

Tracking the Trends

Tracking fashion trends and buyer preferences has become a complex task and it holds for all fashion sectors including athleisure. Pinpointing any trend with certainty is challenging and only gauging a sense of direction is possible. Today’s sense of fashion is to look unique without the razzle-dazzle. There are so many varieties available in the market that, given a chance, no two people want to have the same piece of design. Common people no longer look at celebrities as fashion icons. Social circles continue to play a decisive role in the selection of fashion and brands. With all these factors at play, it is challenging for a fashion retailer to predict fashion trends or foresee possible changes in buyer preferences with certainty.

Determining what fashion is increasingly becoming personal and individualised. One of the best solutions to track developments in fashion trends and consumer preferences is going real-time and finding places where pertinent data and information is available. This is where digital marketing and analytics platforms become such effective tools in tracking general trends and developments with the feature of personalising product recommendations. Popular social media platforms are helping thousands of businesses around the world come to the notice of ideal customers with their products and services. Fashion retailers should also attend athleisure trade shows and conferences and networking events for the athleisure industry. Athleisure industry trends and reports are also helpful for tracking big and small developments.

Becoming a Sustainable Brand

A significant majority of people today are conscious of the impact of business and commercial interests on the planet. On the grounds of sustainability, the fashion industry almost always stays in the limelight. Veterans of sustainability consulting for the athleisure industry are often found reiterating that athleisure fashion is also examined through the same lenses of scrutiny. Anything off the routine and fashion brands find themselves facing the heat of netizens around the world. At the bottom of the value chain are the retailers bearing the final brunt.

Some of the hot issues concerning sustainability in the athleisure fashion industry are discussed next. On the top is the issue of raw materials used in manufacturing athleisure merchandise. The use of synthetic fabrics is common in athleisure clothing. These fabrics have fossil origins and their decomposition, by natural means, is a time-consuming process. This is followed by concerns about carbon footprint and energy efficiency associated with the manufacturing processes of athleisure products. Retailers, resellers or franchisees have little to no control over the events in the earlier stages of the value chain. This makes them susceptible to allegations of involvement in greenwashing practices.

Quick Recap

Fashion brands and retailers intending to venture into the athleisure space should be aware of the nature of challenges in athleisure retailing. Despite being a growing industry, the supply chains required for athleisure retailing are not mature in all countries or regions. Branding and positioning are difficult in this fashion sector owing to reasons like limited merchandising mix, product replication through fast fashion, and changing customer perspective of brand loyalty. What makes things more difficult is finding a balance between values to be offered within the right price brackets for the right segments. This is further compounded by difficulties in tracking fashion trends and changes in buyer preferences. After dealing with all these challenges, competition from activewear and fast fashion is waiting around the corner. Last but not least, athleisure brands and retailers are also expected to be environment-conscious in the conduct of business.

For enquiries on retail and eCommerce solutions for athleisure retailers or to speak to one of our expert omnichannel consultants, please drop us a message and we will reach out to you.