Five brands collectively own half of all U.K. activewear sales–but that could change if other labels stepped up their online game.
According to the first annual “Digital IQ Index: Activewear U.K.” report from research group L2, which benchmarked the digital performance of 60 activewear brands operating in Britain, global brands face mounting competition not only from British brands such as Sweaty Betty but also from high- and low-end retailers that have launched their own active apparel offerings.
“While market leaders (Nike, Adidas, Reebok, Puma and Fat Face) are leveraging extensive resources in order to blunt the momentum of regional competition, they must continue balancing local relevance with economies of scale in order to truly resonate,” L2 said.
Sales of athletic apparel and footwear amounted to more than 6 billion pounds (nearly $9 billion) in the U.K. in 2015, Euromonitor data discovered, and that number is expected to reach nearly 7.5 billion pounds ($11.2 billion) by 2020. Interestingly, while apparel sales are estimated to climb from 2015’s 4 billion pounds (about $6 billion) to 4.7 billion pounds ($7 billion) in 2020, footwear sales will remain relatively flat, growing from 2.3 billion pounds ($3.4 billion) to 2.7 billion pounds ($4 billion) in the same five-year period.
“While the U.K. activewear market is slated for tremendous growth in the next five years, brands have not developed their digital channels in lockstep with market growth and they remain less sophisticated than their USA counterparts,” L2 said, pointing to drop-offs in guided selling tactics, omnichannel strategies, display advertising investment and engagement metrics on social platforms.
And while the vast majority of U.K. shoppers prefer the in-store experience to e-commerce (the former accounted for 85.4% of total activewear sales in 2015), click-and-collect services (which made up 17 percent of all digital sales last year) are starting to drive online purchases.
“As non-store sales transactions capture a larger proportion of total retail sales, it becomes increasingly imperative for brands to mature their digital strategies,” the report stressed, noting, “Our thesis is that digital competence is inextricably linked to shareholder value.”
Paid search and display advertising work for winners
According to L2, some of the rewards reaped by German outdoor apparel company Jack Wolfskin for offering direct-to-consumer e-commerce in the U.K. include collecting consumer account information, and enhanced efforts in paid search and display advertising across device types, which greatly increases brand visibility.
Sweaty Betty, widely considered the U.K.’s answer to Lululemon, shares short films, contests and inspiring stories of #RealChampions that drive twice the Facebook engagement of the average brand. It also controls more than 3 percent of mobile ad impressions registered across the index.
Meanwhile, British outdoor clothing brand Berghaus has more robust search and navigation capabilities as well as better e-commerce support on its U.K. site than its U.S. equivalent, while Fatface pumps money into display advertising on mobile and desktop which has resulted in more traffic to its website. Canada’s Arc’teryx has also made some tactical investments across paid search and display advertising.
Lack of investment leads to poor user experience for “loser” brands
Carhartt’s slow loading U.K.-specific site results in a lackluster user experience that carries over to mobile devices and tablets. The same goes for Mountain Hard Wear. And despite offering international shipping via Borderfree, L.L. Bean’s dedicated focus on the USA and Canada is reflected in its diminished web authority on Google.co.uk. Similarly, Champion’s EU-specific site doesn’t benefit from the same features found on its U.S. equivalent and L2 put Sperry Top-Sider at the bottom of the index barrel for its “diminished brand equity reflected by drop-off in site traffic and earned media mentions.”
Global brands have more robust U.S.-specific sites
Fewer than half of the 60 activewear brands operating in the U.K. and U.S. share the same domain across the two geographies, L2 found. But despite maintaining dual site infrastructure, the basic user experience (layouts and content) is more or less consistent for 78 percent of them.
Larger brands, like Nike, follow a common URL model, integrating multiple geographies under the same domain, which L2 said “provides trickledown benefits for overall web authority and the rollout of global campaign initiatives.”
With that being said, some discrepancies between U.S. and U.K. sites do exist, including access to customer service, product videos and advanced fit/size tools. Under Armour, for instance, offers American shoppers the option to live chat with a customer service representative; the U.K. site doesn’t have that feature. Not to mention, only half the brands that offer product customization in the states offer similar services in Britain.
“As activewear brands selectively implement features that enhance product discovery, the impact of guided selling tools (i.e. interactive video, editorial content, product tutorials, diagnostic quizzes, etc.) can be blunted depending on whether such tools effectively drive to individual product pages and/or checkout,” the report said.
In addition, 62 percent of brands offer a branded blog, but only 30 percent of those link this editorial content to a path to purchase. Similarly, 40 percent include “look books” or digital catalogs on their websites, but less than a third incorporate e-commerce alongside them. And only 10 percent of brands feature user-generated content harvested from social media channels on product pages.
Activewear brands compete with third-party e-tailers on their own branded terms
L2 said that while 85 percent of brands offer direct-to-consumer e-commerce via their own websites, third-party retailers continue to vie for shoppers’ search engine traffic by dominating a larger share of both organic and paid search results on non-branded keywords.
For instance, on Google.co.uk, activewear brands primarily compete for real estate on their own branded terms against third-party retailers, with brand-owned domains and retail destinations capturing only 42 percent and 43 percent respectively of first-page organic results.
“Third-party retailers in the U.K. claimed more organic real estate (43 percent) on brand searches than their USA counterparts (31 percent), filling in the vacuum left by review sites (i.e. Yelp), whose solid visibility in the USA fails to transfer across the pond,” L2 said. “Among retailers, Amazon owned the largest share of organic real estate at 13 percent, followed by U.K.-specific sports retailers (SportsDirect, CotswoldOutdoor, Blacks, SportsShoes) and online ‘pure-plays’ focused on apparel (6PM, Asos).”
To that end, the research group highlighted the importance of a diversified approach to achieving visibility: defending prime positions on search real estate supplemented by strong collaborations with third-party players.
Fewer personalization efforts in the U.K.
While a recent eMarketer survey found that 63 percent of U.K. consumers preferred e-mail over all other forms of brand engagement, L2’s data showed that British brands send fewer e-mails than their U.S. counterparts, with Sweaty Betty sending more e-mails more often to its American customers.
Similarly, activewear brands are more invested in their social media presence within the U.S., with L2 observing nearly 70 million more interactions on American social media properties than their U.K. Brands with localized Instagram strategies include Adidas, which uses the platform to advertise events in its U.K. stores, and New Balance, which frequently posts content spotlighting British fitness brand ambassadors.
“When comparing digital landscapes between the U.S. and the U.K. for the activewear market, we observed that brands in the U.K. were less sophisticated than their USA counterparts in terms of site features, content, and engagement across most social media platforms. However, we observed that a greater proportion of brands in the UK have optimized their businesses and subsequently their digital presences in order to accommodate the growing regional demand for click-and-collect services,” Caitlin Aylward, senior research associate at L2, concluded.