Gap’s Athleta announced Wednesday it is launching AthletaWell, a digital platform that will offer workout content and supervised spaces for women to chat about topics ranging from mental health to body positivity.
The service, which will be a benefit of its loyalty program, allows Athleta to tap the power of the endorsement deals it has made with marquee names like Olympic athletes Simone Biles and Allyson Felix, while building a deeper relationship with its customers. Both women will appear on AthletaWell at some point, the company said.
AthletaWell’s debut comes as the athleisure market is seeing explosive growth. With consumers increasingly embracing comfort, the category swelled to account for 33% of apparel sales last year, according to Maria Rugolo, an analyst at market researcher NPD Group. In 2019, activewear sales made up 27% of total apparel sales, NPD said.
The growth has drawn new players, making it more competitive than ever. In addition to behemoths like Nike, Adidas and Under Armour, smaller labels such as Vuori, Outdoor Voices, Alo Yoga and Nobull have joined the fray. Other big-box chains don’t want to miss the action, either. From Kohl’s to Dick’s Sporting Goods to Target, activewear is a priority.
Building loyalty
For Athleta, the hope is that AthletaWell will allow the retailer to hold its grip on existing customers while also enticing more to join its loyalty program.
Gap laid out a plan last week to make it easier for shoppers to rack up points across its four brands, which include Old Navy, Banana Republic and its namesake Gap. The retailer’s credit card holders will automatically be added to the program, while others can sign up free of charge.
Over 50% of Athleta’s sales today come from loyalty members, the company said, and a loyalty member spends two-times more money, on average, than a regular customer. Loyalty programs also provide retailers with important insights into customers’ habits, which can help guide future product development.
“This is really about deepening our engagement with existing customers, and we know there’s value in building brand loyalty,” Chief Digital Officer Kim Waldmann said in an interview at Athleta’s flagship location in New York City. “And loyal customers drive word of mouth. … We think we can bring in a wider community of people into the brand.”
AthletaWell has been years in the making, and has been in limited beta testing with selected shoppers for about a month, according to Waldmann.
Athleta will be working with Obe Fitness to offer workout content each week. The company recently participated in Obe’s $15 million Series A funding round. Both businesses will be collaborating on a long-term basis to design apparel lines and plan events for loyalty members, Waldmann said.
Tapping endorsement deals
Another perk of AthletaWell is the chance to talk to top female influencers, including trained therapists, yoga practitioners and nutritionists, who will lead conversations around women’s health and fitness via a digital message board. Users will also be able to attend influencers’ virtual office hours to seek one-on-one advice.
“This is a digital experience that helps women navigate the complexities of modern-day womanhood,” Waldmann said. “They want to be able to ask honest questions that are maybe even a little taboo at times.”
The company is planning to host in-person meet-ups to allow members to gather and work out together. At its flagship in New York’s Flatiron neighborhood, Athleta has a fitness studio on its lower level where it already has several events planned.
White Athleta has been fueling growth at Gap, it needs to find ways to continue the momentum. It recently launched in Canada, rival Lululemon’s home turf. It also has its endorsement deals with gymnast Biles and track star Felix. Waldmann said both women will appear on AthletaWell in the future, but didn’t reveal further details.
Athleta’s customers may relate to the challenges both have had to face. In a shocking development, Biles dropped out of the women’s team final in Tokyo on Tuesday, saying she had to focus on mental health. Athleta issued a statement of support: “Being the best also means knowing how to take care of yourself.”
And with Felix, a working mother, Athleta has emphasized its support for moms who also make time for fitness and sports. Felix and Athleta recently launched a grant program that has committed $200,000 to help fund child-care costs for mothers who are also athletes, when they must travel to competitions.
Athleta is targeting $2 billion in annual net sales by 2023. The brand surpassed the $1 billion mark last year, with its sales up 16% from 2019 levels. Gap’s total sales for 2020 amounted to $13.8 billion.
Some of the retailer’s rivals, meantime, have already tried to engage their customers with some sort of fitness offering. Last year, Lululemon acquired the at-home fitness platform Mirror for $500 million. And Nike has a range of workout apps, including one for running, that offer classes taught by Nike athletes who are always sporting the brand’s latest styles.
Athleta thinks the community component will set AthletaWell apart.
“Women today don’t have a safe space to ask certain questions or engage in certain topics, for fear of stigma or embarrassment or not wanting to look different than everybody else,” Waldmann said. “We were hearing this over and over from our customers.”
Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032.
Source: Business - cnbc.com
