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Nike and Lululemon Benefit From Gen Z’s Athletic Appetite

Gen Z’s growing preference for athletic apparel brands boosted Nike and Lululemon to new highs in Piper Sandler’s semi-annual Taking Stock With Teens survey.

Forty-four percent of upper-income teens voiced a preference for “athletic” apparel brands, a new survey high. Thirty-nine percent said the same in the fall, which at the time was the highest level Piper Sandler had recorded since spring 2017.

Nike once again emerged as the top brand in both apparel and footwear. Thirty percent of respondents identified the Swoosh as their preferred clothing brand, a 400-basis-point increase from a year ago. Lululemon gained 300 basis points to receive 5 percent of the vote, enough to earn it third place behind American Eagle, the preferred apparel brand of 7 percent of respondents. H&M and Adidas placed fourth and fifth with 4 percent.

Nike dominated footwear by an even greater margin, with 60 percent of teens selecting it as their preferred brand. Converse, Adidas and Vans followed in second, third and fourth, each with 8 percent.

Piper Sandler’s survey also noted a silhouette change toward looser fitting and flared denim. “However, we are seeing this trend spreading to leggings as we received responses such as ‘flared leggings,’” senior research analyst Nicole Miller Regan added.

This past fall, clothing emerged as the No. 1 wallet priority among upper-income teens for the first time since Fall 2014. Piper Sandler’s most recent survey, however, saw food return in the top slot. Teen girls led the way in fashion spending growth, with apparel increasing 15 percent and footwear rising 16 percent.

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Interest in resale appeared to fall off compared to Piper Sandler’s fall survey, with teens allocating 7 percent of their time to secondhand shopping, down from 8 percent. Six months ago, the investment bank reported that 51 percent of teens said they had purchased secondhand, while 62 percent claimed to have sold secondhand. These figures fell to 46 percent and 56 percent, respectively.

TikTok finally overtook Snapchat as teens’ preferred social media platform. A third of respondents selected the video-centric app as their favorite, while 31 percent said the same of Snapchat. Instagram came third, with 22 percent naming it their favorite.

Though brands have often framed their experiments with NFTs and the metaverse as a means to connect with the next generation, Piper Sandler’s survey suggests that that logic may have its flaws. Nearly half of teens, 48 percent, said they were “unsure” or “not interested” in the “metaverse.” Only 26 percent reported owning a virtual-reality device and 5 percent said they used it daily.

Lululemon welcomes Nike, Adidas veterans

Teens’ growing approval of Lululemon comes as the rising threat in women’s activewear took a direct shot at Nike and Adidas’ central business last month with its long-awaited footwear debut.

First teased three years ago, Lululemon’s footwear category kicked off March 22 with the launch of the Blissfeel running sneaker. Additional silhouettes, including a cross-trainer, post-workout slide and trainer, are scheduled to arrive later this year through the fall season. A men’s footwear launch is slated for 2023.

Lululemon Blissfeel
Lululemon plans to follow up its Blissfeel running sneaker with further footwear silhouettes later this year. Courtesy

A design patent granted to Lululemon by the USPTO in October offered some insight into who exactly the company tasked with creating its first sneakers. Among those listed as inventors were several past employees of footwear’s largest companies. Mark Oleson, the retailer’s vice president, product creation, spent six years at Under Armour and 11 years with Adidas. Another Under Armour alum, Lululemon’s senior manager, product creation footwear, Michael Notrica, was also listed as an inventor.

This past week, Lululemon welcomed yet another footwear veteran to its team. After more than 25 years with Adidas, Simon Atkins joined the company as its senior vice president of footwear Monday. Atkins will lead the development and execution of the brand’s global footwear strategy and business and report directly to Sun Choe, Lululemon’s chief product officer. Most recently, he served as senior vice president and general manager of Adidas’ global basketball and U.S. sports business.

Lululemon will bring on Phil Dickinson, an alum of Nike and SuperDry, this summer. Dickinson, who will take on the newly created role of senior vice president, global creative director, will be “instrumental” in shaping Lululemon’s creative strategy and roadmap for product design, the company said. Most recently global creative director at SuperDry, Dickinson previously worked at Nike for 15 years. He will also report to Choe.

“As we continue to build upon our strength in bringing product innovation and technical credibility to our guests in head-to-toe solutions, we’re excited to bolster our product leadership team with the appointments of Simon Atkins and Phil Dickinson,” Choe said in a statement. “Both leaders bring a deep understanding of guest needs and a global mindset that will enable the brand to accelerate and scale our growth around the world.”

Matt Powell, vice president and senior industry adviser, sports at The NPD Group, addressed the potential for Lululemon’s nascent footwear business in a blog post last week, referring to the sneaker launch as “a pretty big deal.”

Powell highlighted the loyalty of Lululemon fans. According to NPD Checkout data, women who bought the brand’s activewear spent 30 percent of their total activewear purchases there in the 12 months ending January 2022. Brands like Fabletics, Under Armour and Adidas, meanwhile, each capture less than 10 percent of their customers’ activewear purchases. “I expect that the strong loyalty to Lululemon apparel will likely carry over to footwear,” Powell said.

“By brand, Lululemon’s female activewear customers favored Nike for their performance footwear purchases, followed by Brooks, Adidas, Asics, and Hoka,” he added. “It will be interesting to monitor if and how these brands are impacted by the Lululemon shoe coming to market.”

Lululemon, which stands to outpace Nike as the largest women’s activewear brand in the U.S., has centered its business around female consumers. As it moves to athletic footwear, an industry that has historically designed for men’s feet, Powell believes Lululemon’s female-first approach will give it a leg up on the competition.

“In addition to Lululemon’s loyal customer base, fit is another element that will likely make strides for its footwear program,” he said. “I also believe that the new Lululemon footwear will force the rest of the industry to be more transparent about which of their products truly fit women’s feet.”