Life Of Athleisure: Why Retail Brands Are Losing Their Shit Over Runners

Nike’s Better For It campaign in downtown Toronto appeals to the occasional athlete with straight talk about the awkwardness of becoming one of those people who exercise. The ads encourage resolve and self-improvement for people who are still finding their niche in the gym or elsewhere.

Better For It is aspirational by design, tapping into the common guilt and shame that many people feel about exercising when we see other people doing it. It’s a campaign for the rest of us: the mass market.

It’s a campaign that works beautifully because of its sentiment, its target audience and its product.

The product is athletic fashion: clothing and shoes that can (theoretically) be worn in the gym or in the street. If you like, even on the couch. Though ‘active wear’ may have been the original term for this type of clothing, the portmanteau ‘athleisure’ or has been suggested to describe the adaptable, dual nature of this clothing.

There’s something special about athleisure as a product. It’s a product marketer’s beautiful Frankenstein of health, social psychology, personal empowerment, technology and high profit margins.

Some research has event suggested that clothing can change how you think and, in the case of active wear, make you more likely to exercise. Magic clothes!

The impact of yoga pants

The impact of comfortable, versatile and form-fitting yoga pants on fashion brands and retailer cannot be overstated. In a short period of time, Lululemon transformed the athletic apparel market. Lululemon’s net revenue increased from $40.7 million in 2004 to $274.7 million in 2007 and grew from $1.3 billion in 2013 to $1.6 billion in 2014. It grew by $300 million in one year. GREW

Activewear sales in the US rose 8% 2014, while apparel sales as a whole were flat in 2014 compared to 2013.

Lululemon began the most recent and profitable incarnation of this trend, but other companies have taken up the torch (and the profits), moving into a lucrative and still-expanding trend.

According to research from Market Realist, activewear sales in the US rose 8% 2014, while apparel sales as a whole were flat in 2014 compared to 2013. (Did I mention Lululemon grew by $300 million?)

As its name suggests, athleisure is actually a fusion of two previously separate lines of business: Fashion brands creating their own lines of athletic apparel, while athletic brands attempt to make their apparel more fashionable.

The trend puts previously independent companies in direct competition. Take Under Armour — as its name implies — previously known for its line of compression clothing worn under equipment, began producing shoes in 2006 and has quickly moved into the after-gym clothing segment.

Just imagine two brand with such different personas selling similar pants to the same segment of customers.

The competition hits the gym

Just imagine two brand with such different personas selling similar pants to the same segment of customers.

And why wouldn’t they? Selling high margin athletic clothes in relatively small store, Lululemon ranks between fashion brands Kors and Coach with the fifth highest revenue per square foot in its stores to high income customers. Lululemon has the highest profit margin of any North American apparel company: 17.5%. Compare that to luxury retailer Nordstrom’s 6% profit margin.

Now, Gap Fit, Athleta (a separate store brand from Gap), Adidas, Urban Outfitters, singer Carrie Underwood? and many others have began competing for athleisure dollars.

For Nike and Better For It, there’s something special about jogging too. In the eternal words of Ron Burgundy: you just run. There’s no major league to associate with and no superstars with which to negotiate $300 million, 10-year contracts.

Instead, there is a weekly training club sending packs of joggers out onto the sidewalks of downtown Toronto and social media-connected apps to humblebrag about training for the upcoming Nike Training Club 15 kilometer run.

The competition is becoming fierce, but the social psychology, the profit margins and the branding opportunity is too good for any brand or retailer to pass up on.

Buying into athleisure won’t necessarily make you one of those people who exercise, but both you and Nike might be better for it.

Originally published at on May 28, 2015.