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Q&A: Gymshark on being relentless

Gymshark was founded in 2012 by teenager Ben Francis and a group of school friends who began by screen-printing designs in the back of a garage. Now the business has grown to become a well-recognised contender in the ever competitive fitness market dominated by millennials.

The brand has 11 eCommerce stores across the globe in regions including the UK, US, Germany, France and Australia, while ranking up 5.1 million followers on social media. And it is on track to finish its financial year in July 2018 at around £100 million in turnover.

Essential Retail chats to CEO, Steve Hewitt, to learn how this brand is using digital to stand out from the crowd.

Tell us a little bit about the background of the business…?

The business started in August 2012, and from the start the position of the brand was around fitness aesthetic. While companies like Nike, Adidas and Reebok (where I used to work) create clothing for the mass market, our clothes are more fitted to show off the physique of our customers who work hard at the gym. Basically at Gymshark we’re all about the young consumer who wants to show off their figure in the gym.

Only the “young consumer”?

Our core customer is the 18-25 year-old and we’ve been really focused on them and the business has fiscally seen the benefit of being really focused. A lot of fast-moving brands diversify and go after the mass market, but our key success factor has been our real focus on the 18-25 year-old, to the extent if you become 26, we stop actively marketing to you. Those customers can still follow us on social media, but we’re not going to invest our marketing spend on attracting that person.

Is that what makes your business model different to other brands and retailers?

Yes, we are a D2C model only. We see a lot of other brands utilise third-party retailers to get their brand launched in Selfridges or JD Sports to build scalability, but we decided in the early days not to do that.

It’s not because we see better money or margin, but we need to understand our core consumer audience – these 18-25 year olds – and we can only do this by staying a D2C business. We understand that consumer in the fitness industry better than any other brand globally – from the minute they get up to the minute they go to bed.

So how does this insight impact your marketing decisions?

So we know that a lot of 18-25 year olds now generally don’t watch TV, they watch YouTube. They also follow a lot of influencers on YouTube or Instagram and those have become our two biggest social media platforms.

Up until about a year ago we spent zero investment in more traditional marketing channels like outdoor or TV, but we did spend a huge amount of time in our social media channels because that’s where our customer lives. We’ve managed to invest, identify, recruit and retain our customer and our social media team is driven by 22-23 year old talented people that understand that world really well. We’ve seen our social media following grow exponentially and we get around 10,000-15,000 new followers every day. We’re just over five million total followers and our active customer base is near one million.

"It's all about building brand equity instead of product sales, because fiscally we haemorrhage money from the pop-ups."

How has the fitness craze helped Gymshark in recent years?

We know that 19-20 year olds would rather go to the gym than the pub after a hard day’s work at their job or university. It’s also all about the diet these days and watching their macros – protein intake – and even if they’re just a little big into fitness, diet becomes a big focus. And where they might have spent their money on a few drinks in the week, they’re not spending it on a gym membership to follow their influencers and exercise.

Would you ever consider opening stores?

We are purely eCommerce. We do occasional pop-up stores, but they are not like a normal brand’s pop-up which would last for a month or six months. We’ve just done one in LA, it took a week to set up but it was only open to the public for one weekend. We do it to build content, and we offer exclusive product in those stores that customers can’t get online, as well as getting athletes into those stores. It builds a whole load of hype. People in LA were queueing over night for ten hours to get into the store. It’s all about building brand equity instead of product sales, because fiscally we haemorrhage money from the pop-ups.

What is your biggest challenge today?

Our biggest challenge is acquiring talent. We’ve got a very young team with an average age of 26. Overall we are just shy of 150 people in the business, but we have 102 vacancies and we are recruiting at a speed of bringing 10 new heads a month.

For example, our IT team is going to grow from 12 people to 20 by July [the IT team are integral to integrating the Gymshark Shopify website with its warehouse management system]. On Black Friday we had 125,000 people on our sites all at the same time and nothing went down, so that whole jigsaw is really important. And our customer insights team is going to grow from five to 12, they give us a better idea of what the customer is thinking by collecting customer data – why they buy, when they buy, what turns them on, what turns them off?

We’re about to move into a new HQ in Solihull in the West Midlands, which is Vodafone’s old HQ. We needed to build a world class HQ which would attract that talent – let’s build it and they will come.

What worries you?

It’s probably that we’re awesome at dealing with today and our current financial year, but what you find is when you’re growing at 220% year-on-year, just staying on top of today is pretty relentless – without today we can’t get to tomorrow. But we also need a team looking three years into the distance to make sure there aren’t product categories we’re completely missing because we’re dealing with this relentless and unbelievably exciting culture. It’s difficult to get the talent you have to focus on tomorrow as well as today.

Steve Hewitt will be speaking on a panel at Retail Week Live on 8 March 2018 12:05-12:35 ‘Winning the war for digital talent’.

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