2003SEM – Sport Marketing Insights Gymshark Case Study ID, Study Guides, Projects, Research of Marketing

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2003SEM – Sport Marketing Insights

Gymshark Case Study

ID: 6858834

Contents

• Introduction
• Importance of Data Analytics
• Data Ecosystem
• Customer Analytics and Product Pricing
• Consumer Engagement Customer Relationship Management (CRM) and
• Recommendations and Conclusions............................................
• Reference List

Events are a growing part of Gymshark by hosting ‘LIFT’ events in various global cities. Collecting data from attendees in each country can generate specific profiles so events and marketing campaigns can be customised. Additionally, with events in different venues, analytics can aid the event manager in initiating, planning, executing, monitoring and closing the event (Project Management Institute 2016). Monitoring is vital to evaluating the success of the event both during and after to judge satisfaction however success ultimately comes down to event profits.

Data Ecosystem

Data ecosystems are technical environments of software and platforms that aim to deliver data-driven marketing (Green 2019:77). DeLone and McLean Information Systems (DMSM) (DeLone and McLean 2003) examines how elements within ecosystems perform through three measures: information quality, service quality and system quality. Data quality relies on the people, processes and technology to perform tracking, checking and monitoring throughout the whole ecosystem (Sherman 2014). The process of digitisation through technological developments has engaged managers to focus on data ecosystems not just for efficiency but as pathways for growth (Niden and Sprigg 2016). Driving value in customer profiles depends on business strategy but also the data systems (Suther, Burkart and Cheng 2013 :38). Gymshark’s systems have required updating to sustain the escalating demand and growth. Back in 2015, Gymshark averaged approximately 500 orders/day with 20,000 on Black Friday, this grew in 2016 to 2,000-3,000 orders/day with 90,000 sales on Black Friday (Peoplevox 2018). Chris Perrins from Gymshark stated the ‘current system was under stress and crashed during the event (Black Friday 2015) prompting urgent need to upgrade’ (Peoplevox 2018). So, systems undertook a re- platforming to attain new levels through the Shopify Plus enterprise level solution which was stable, agile and scalable (Peoplevox 2018). The new system allowed the warehouse team to keep up with the orders and the day-to-day demands of sales. This example demonstrates how Gymshark changed their systems to become more compatible, allowing them to increase their revenue. Relating back to the DMSM, the new Figure 2: Gymshark Ambassadors (Gymshark 2019a)

system improved the three main qualities through increased stability, agility and scalability. Although this has not advanced customer analytics, it increases the supply chain efficiency meaning customers receive their orders sooner growing customer satisfaction. Furthermore, it supports Niden and Spriggs’ claim of how ecosystem developments results in organisational growth, in this case, a significant rise in revenue.

Customer Analytics and Product Pricing

Gymshark’s customers may not necessarily follow the brand with fanatical behaviour (Hunt, Bristol and Bashaw 1999) and use other brands such as Nike however it is possible to create fans with a strong allegiance. The use of the Fan Escalator in figure 3 (Mullin, Hardy and Sutton 2014) can nurture fans to invest more in the brand. Although this applies to new consumers it is crucial in retaining consumers at a high level. However, Gymshark must be wary of assuming that fandom automatically equates to repeat consumption and purchasing which isn’t always true (Mumcu 2017:92). Kruger (2011) demonstrates the Pareto Principle where 80% of the income is generated by 20% of the customers thereby understanding and segmenting consumers leads to increased profitability. Knowing this, a TiMSS plan could be used to create appropriate strategies such as the Aspire Group have done in figure 4 (Farris 201 7 :72). Adapting this to Gymshark, fans could be viewed as: fitness enthusiasts, casual fitness fans, fitness beginners. Most importantly to Gymshark’s analytics is digital marketing such as website analytics, social media and emails. With no physical store and few events, it is difficult for Gymshark to judge the appearance of its customers and create a generic visual profile. Customers are largely represented through data. Therefore, creating customer profiles which can be analysed leads to ‘faces’ being aligned to data (Kumar and Petersen 2012:215). Big data can obtain this level of analytics through its elements: voluminous, variety, velocity and veracity (Akter and Wamba 2016). These elements form the types of data in e-commerce: transaction data, click-stream data, video data and voice data (Akter and Wamba 2016). Figure 4 : Aspire Group 8-point TiMSS Philosophy (Farris 2017:72) Figure 3: The Fan Escalator (Mullins, Hardy and Sutton 2014)

Customer Relationship Management (CRM) and

Consumer Engagement

CRM is broadly defined although Buttle’s (2008:3) managerial perspective is that ‘CRM is a disciplined approach to developing and maintaining profitable customer relationships’. Creating relationships with customers is fundamental to repeat purchases therefore it is important to understand each customer’s financial value within a transaction and over their lifetime (Kumar and Petersen 2012). Comprehending this value relies on developing a relationship which only forms when consumers progress from a state of independence to dependence (Heath and Bryant 2000). Previous beliefs were that relationships and customer value only emerged during service interactions whereas a contemporary perspective denotes that customer value is created before and after purchases and measured throughout the consumers experience (Heinonen, Campbell and Ferguson 2019). To maintain their rate of growth, its important that Gymshark focus on innovative strategies such as the growing marketing methods of social media, mobile marketing and customised campaigns (Kumar and Petersen 2012:224). For Gymshark to establish customer value from the CRM systems, data should include individuals, interactions, ‘LIFT’ event attendances, demographics and purchase history so that marketing campaigns can be aimed at individual customers (adapted from Mathew 2017). The outcome of CRM is largely to achieve a return on investment (ROI) linking back to the aforementioned Fan Escalator where customisation can aid retention and drive sales. Saul (201 0 ) proposes ‘emotive customer bonding’ where consumers are immersed in a complete brand experience and to create a strong value of the customer. Furthermore, strategies with an outcome that customers can value, fitness and health, can increase the bond and allow customers to feel part of something more than a brand. Analysing the growing method of social media, figures 8,9, 10 and 11 display the performance of Gymshark’s social media channels according to analytics website Social Blade. From Social Blades’ grade ranking system, Gymshark’s social media performance is positive through Facebook and Instagram but underperforming on Twitter and YouTube. Driving revenue from these platforms is crucial for consumer engagement to be successful. Figure 7: Gymshark’s Student Discounts (Gymshark 2019c)

For example, the strong following on Instagram can be used to advertise clothing and the reach of each specific advertising post can be recorded. Along with the ‘shop the Instagram look’ endorsed by Gymshark (Gymshark 2019c) a new purchasing channel is formed however on Gymshark’s Instagram there are only three items available to purchase. A further negative is that consumer engagement on Instagram is very low and despite a new channel of purchasing, posts need to gain greater attention of followers to develop a revenue. As mentioned, Gymshark held great success during Black Friday which could be attributed to the large engagement on Twitter although proving this would be difficult and unclear. Figure 12 shows the dramatic changes in activity both of tweets and followers for around Black Figure 8: Gymshark Facebook Analytics (Social Blade 2019a) Figure 9: Gymshark Twitter Analytics (Social Blade 2019c) Figure 11: Gymshark YouTube Analytics (Social Blade 2019e) Figure 10: Gymshark Instagram Analytics (Social Blade 2019b)

bond by increasing customer involvement with the brand and developing an experience where Gymshark fully represents health rather then being sought as just a retailer. Goal setting is moderated by a commitment towards the goal which is conceptualized in various ways yet reinforces a need to reach that goal and therefore offer more involvement (Klein, Cooper and Monahan 2013). Stemming from the first recommendation, Gymshark should gain a greater understanding of how their products are consumed. Currently, workouts involving Gymshark apparel are viewed by the business through their ambassadors and the ‘Lifting Club’ app with both returning little insight. A second recommendation proposes altering the current app or develop a new app allowing all customers to access workouts and track their fitness. The ‘Lifting Club’ can still remain exclusive to retain those current Gymshark and fitness consumers at the pinnacle of the fan escalator. Moreover, there is still a target for casual fitness fans and beginners to grow into enthusiasts and be more involved. Data from the app can further target customers by aiming certain fashion lines at customers who perform certain workouts. For example, those who focus on cardio exercise can be targeted with running apparel. Data can also be collected based on the frequency, workout type, equipment used and fitness profile and be added to the CRM systems. Notably, competitors Nike have achieved success through their fitness apps and have little competition from other sport apparel brands. The final recommendation is to ensure social media platforms are used effectively to produce maximal revenue as figure 13 shows Gymshark’s performance in context of competitors. Reflecting on figure 10, Instagram user engagement is low, inhibiting the success of ‘shop the Instagram look’ section of the website as well as Instagram itself. Figure 12 evidences that increased social media activity and engagement, albeit during a major sale period, can used effectively alongside campaigns to drive revenue. Again, linking with the second recommendation, competitions via social media in conjunction with the fitness app can increase engagement by rewarding customers for working out and posting content on social media. For example, a competition on Instagram could encourage customers to upload a screenshot of their workout, tagging Gymshark in the post with a random participant selected to win a prize. Besides boosting involvement, it would stimulate a word- of-mouth style promotion reaching the followers of those who enter the competition. Figure 13: Fitness Brands by Instagram Engagement Rate (CampaignDeus 2018)

In summary, Gymshark’s focus on being an e-commerce retailer demonstrates where companies need to target modern retailing to be successful however there is still a wide gap between Gymshark and established brands. Operating online presents the opportunity to streamline the business through data analytics and the recommendations presented can achieve increased engagement and offer additional streams of revenue.

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Klein, H.J., Cooper, J.T., and Monahan, C.A. (2013) ‘Goal Commitment’. in New Developments in Goal Setting and Task Performance. ed. by Locke, E.A. and Latham, G.P. New York: Routledge, 65-

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Social Blade (2019e) Gymshark YouTube Analytics [online] available from https://socialblade.com/youtube/c/gymshark [2nd^ April 2019] Suther, T., Burkart, B., and Cheng, J. (2013) ‘Jack and the Big Data Beanstalk: Capitalizing on a Growing Marketing Opportunity’. in Big Data and Business Analytics. ed. by Liebowitz, J. Florida: CRC Press, 21-42.