Online sporting apparel retailers winning the race: Report
Friday, October 3, 2014/
Online sporting apparel retailers are giving bricks-and-mortar stores a run for their money, with the online sector shown to have grown rapidly over the past five years.
Industry revenue is forecast to be worth $70.8 million in 2014-15, according to the latest report from IBISWorld. The strong performance is due to consumer acceptance of online shopping and major brands leveraging the power of social media.
IBISWorld senior industry analyst Lauren Magner told SmartCompany online sportswear retailers have used social media “really effectively” to engage customers online.
“Online sporting apparel has done particularly well over the past five years and that process has mainly involved the major players investing strongly in their online platforms,” says Magner.
Magner picks out Lorna Jane is a prime example, with the brand currently driving about 10% of online sales through Facebook.
“They launched in 2007 which is quite early in relation to other domestic retailers in Australia,” she says.
“They’ve been able to redesign the store over the past five years and that has fuelled online growth.”
Speaking to SmartCompany previously, Lorna Jane’s digital marketing and e-commerce manager Jessie Dean said the secret to the company’s success was consistently engaging with customers and sharing information that is helpful and relevant to them.
“We also regularly review our customers’ posts and share their real life stories and let all women know they can be a Lorna Jane girl,” Dean said.
“We love to keep our posts authentic and this is a great way of doing it.”
Magner says social media has allowed the sporting apparel industry to promote their products to a much larger audience than ever before.
“Instagram has been particularly good at fuelling demand for all sorts of fashion because you can have a fashion blogger promote your product and it just goes viral,” she says.
But bricks-and-mortar retailers are paying attention, with brands such as Rebel and Amart Sports rushing to expand their online presence over the last five years. This is due to consumers moving away from purchasing sporting apparel in physical locations and instead browsing online websites.
“They are able to use their store networks to scale and achieve cost savings for their online business,” Magner says.
However the industry’s expansion has also been limited by cheaper international competition, particularly in the footwear market.
“There is quite a huge price discrepancy when we compare Australian prices with US prices,” Magner says. “There has been a leakage of revenue there.”
Meanwhile, Magner points out that domestic competition tends to be based on the quality of products that domestic stores offer, instead of the hip pocket.
“Consumers have shown a willingness to pay for quality,” she says.