The Evolution of Consumer Values in the Sportswear Industry

Top brands such as Nike, Reebok, and Puma have set the stage to showcase sports goods. Nike is the clear leader in the athletic footwear industry with a 27.4% market share and $37.4 billion in revenue in 2020. However, in today's rapidly evolving market, what do modern consumers prioritize when purchasing sports apparel and equipment? Brands like On , Pas Normal Studios , and SATISFY are introducing and implementing unique strategies, creating value through inimitable experiences, values, and lifestyle

Shifting priorities and brand awareness:

In the past, a common shoe consumer looking to buy a pair of shoes considered, for example, design and functionality first and brand second; nowadays, the modern consumer's first decision is which brand reflects and amplifies the customer’s identity. Brands need to adapt quickly to this changing environment and make brand building a priority. Narratives and storytelling are very important for brands, and while authenticity is important, brands should also allow consumers to be a part of the story. Relating to the brand and its values can cultivate a sense of brand loyalty and create a long-term relationship between the brand and the consumer.

Formerly, sportswear was mostly worn just for exercise or sports activities. But now, athleisure has changed that trend. Athleisure wear combines athletic wear and trendy streetwear, creating a hybrid style of athletic clothing typically worn as everyday wear – even if you have no plans to actually work out. The Covid lockdown meant consumers wanted comfortable yet stylish clothing for daily work, and the rise of athleisure after the Coronavirus Pandemic hit with tremendous numbers. The lockdowns since the beginning of the pandemic have seen athleisure sales orders jump by +84% (according to True Fit’s Fashion Genome data). This trend has made brands rethink the kinds of products they offer and how they are able to deliver an authentic product.

Social consciousness is also driving consumer choices, with authenticity and sustainability playing crucial roles. A vast majority of consumers prioritize authenticity in their purchases, and sustainability has become a key consideration for many. Products with ESG (Environmental, Social, and Governance) focus claims have experienced significant growth in recent years, reflecting a broader shift towards conscious consumerism. As an example, Pas Normal Studios (PNS) has formally committed to reducing absolute emissions by 42% by 2030 from a 2020 baseline year, according to the Impact and Responsibility Report 2023 by PNS.

Self-care has emerged as a central priority for consumers, with a focus on health, happiness, and overall well-being. Furthermore, outdoor experiences have become an escape from the long office days. An active outdoor lifestyle has been integrated into consumers' lives post-pandemic.

Younger generations, facing economic challenges such as housing affordability and wealth inequality, are reevaluating traditional notions of success and wealth creation. This shift towards present-focused decision-making extends into lifestyle choices.

On Running, Pas Normal Studios (PNS) and Satisfy Running as an example of emerging brands:

The sportswear industry is undergoing a transformation, with emerging brands stepping up to challenge the dominance of industry giants. These brands are making waves with their fresh perspectives, innovative designs, and focus on niche markets. They prioritize individuality and craftsmanship, opting for small-batch production runs. The rise of small-batch sports apparel creators is a game-changer, signaling a new era where quality, uniqueness, and customer connection are as important as scale and reach. These younger brands are redefining what it means to wear sportswear, bridging the gap between performance and style. On, PNS, and Satisfy are taking brand building a step further, considering new ways to engage with consumers and influence their desire to purchase.

On Running has gained recognition not only among runners but also casual sneaker wearers, mainly thanks to its striking designs. On’s ethos is entirely rooted in sustainability. Currently, 30% of its shoes are made free of fossil fuel materials, and 100% of products will be made from recycled materials by next year. PNS is revolutionizing sportswear with its cycling trends. And Satisfy, a Parisian running brand, draws inspiration from the global running subculture, blending elements of music, fashion, and art. All three brands bring a sense of coolness to their products, challenging the notion that performance wear must sacrifice style and shaping an athleisure trend in all their products. In a market where brand differentiation is key, these emerging brands offer consumers more than just products—they offer a lifestyle.

Nike and Adidas are losing steam to competitors such as On Running, which brings a new aesthetic to their designs, catering to everyday runners. The decrease in market share may be due to cautious consumers and increased promotional efforts by competitors. On Running's market share at Dick's Sporting Goods in the footwear category increased to more than 4% from what it had at the beginning of the year.

"Nike and Adidas have perhaps fallen behind on innovation compared to some others, who have seemingly found market niches to exploit and have put out products that seem to be really catching on with consumers," David Swartz

On, PNS, Satisfy, among other emerging brands, are changing the marketing playbook to create a more significant role for communities. Sports social networks, such as Strava, are developing customer relationships that extend far beyond the transactional. These brands have been successful in fostering communities, enabling them to reduce their traditional media spend. On Running's community building is core to its marketing strategy, including initiatives such as an ambassador program. Digital communities have enabled active people to be part of a group while participating in sports that are otherwise more solitary, including hiking, cycling, and running.

Personal opinion:

During the COVID-19 pandemic, many smaller sporting goods companies grew exponentially, and many others were founded due to the shift in consumer behavior explained above. I used to consider myself a loyal Nike consumer; however, in the past few years, I have bought a streetwear shoe, a more technical shoe for running races, and a specialized trail running shoe, all from On Running. When it comes to sportswear, I tend to buy from smaller brands that engage more with my lifestyle and feel personalized and unique, such as Satisfy Running or Far Running, a Barcelona high performance running apparel company. As a consumer, I always want to feel different and trendy. Emerging brands bring this new essence and a different sense than big global brands like Nike.

The future trajectory of sporting goods brands is underpinned by three crucial elements: i) the allure of private investments, ii) the brand's purpose, and iii) a strong community with loyal customers. The exceptional performance of sporting goods, athleisure, and emerging brands has garnered the attention of investors, sparking a surge in venture capital (VC) and private equity (PE) deals. Private investors are strategically constructing portfolios comprising complementary brands. When thinking about why the brand exists and building a strong community of loyal customers, these important aspects work together to teach customers more about what the brand stands for, how it communicates, and its customer retention efforts.

About the author: My name is Javier Faus, and I'm an MBA candidate at IESE Business School. With previous experience in consulting and venture capital, my current focus is on understanding how consumers engage with athletic brands and gaining a deep understanding of the brands themselves. I have been a sports enthusiast for as long as I can remember, and my goal is to unite my two passions: business and sports.

You can reach me here:

LinkedIn: https://www.dhirubhai.net/in/javierfausm/

Mail: [email protected]