How Important Is Athleisure For Sports Apparel Companies?

by Trefis Team
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Activewear, or the ‘Athleisure’ trend, has become so popular, it has carved out a niche for itself in the clothing industry, while winning an entry into the Merriam-Webster dictionary, which defines it as “casual clothing meant to be worn both for exercising and for general use.” It has been the lone star in a waning apparel industry, with an estimated market size of $44 billion in the U.S. alone, according to research firm NPD Group.

One of the reasons for the massive popularity of the athleisure trend is that it fills a gap in the market place, where clothing that is functional isn’t particularly stylish. Such clothing can be worn to the gym, as well as everywhere else, and this relaxed standard of clothing has been largely driven by the millennials.

Millennials are currently the largest demographic in the U.S. They now account for almost 80 million of the 319 million people living in the country. To put this into perspective, the number of people born between the years 1981 and 2000 now comprise almost 28% of the entire population. Hence, it comes as no surprise that producers such as Nike (NYSE:NKE), Under Armour (NYSE:UA), and Lululemon Athletica (NASDAQ: LULU) are now scrambling to change their strategies to best accommodate, potentially, the most important demographic at the moment.

Most of the traditional advertising methods have proved ineffective when trying to garner interest from this age group. However, if companies better understand the psyche of such consumers, they should potentially increase sales, and in turn, revenues greatly.

Millennial consumers love to spend on fitness and experiences. As per a Harris poll, 72% of millennials prefer to spend their money on experiences, rather than material things. As athleisure clothing is typically worn for an experience, more often an outdoor experience such as working out or hiking, they are more likely to spend their money on it. Acceptance of casual dressing at the work place has also been a factor spurring its growth.

Apart from the rise of Millennials, the athleisure trend is also benefiting from the fact that there is  a general shifting trend to eat and live healthier in the U.S. With rising awareness of problems associated with obesity and diabetes, fast food visits have been on a constant decline over the last few years. For instance, fast food  revenues have fallen or gained only marginally over the past few quarters. Soda sales have also dropped for ten consecutive years now. The general populous is now, more than ever, focused on eating right and living a healthy lifestyle.

Given the current health revolution and the growing popularity of such apparel among the ever increasing Millennial population, it comes as no surprise that athleisure has become a more relevant clothing option than just a few years ago. Sports apparel companies must definitely take advantage of this shift going forward to best position themselves for future growth.

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