COVID-19 Consumer Shifts in Activewear

Covid-19 has ignited a fitness frenzy as social distancing rules prevent people from exercising outside. As a result, the online demand for activewear and sportswear has increased exponentially in key markets all over the globe. However, there are some distinct differences in how the trend is evolving between the West and Asia as the severity of the crisis varies from country to country. In this report, find out top brands dominating each market, highest performing product categories and more.

Written by Ashley LooiApril 27, 2020

Introduction

Due to its severity, the Covid-19 crisis has sparked a global work from home movement.  88% of organisations across the globe have either recommended or instructed employees to work from home. With the number of cases picking up in recent weeks, there is much uncertainty on when this movement will come to an end.

The fitness industry is deeply affected by Covid-19. Having relied heavily on physical locations, the fitness industry is reinventing itself for the current conditions. ClassPass has rolled out live workouts for subscribers and offers free workout videos. Furthermore, fitness studios around the world are streaming free workout sessions on Instagram. Now that consumers have unprecedented access to fitness videos, there is an expected increase in activewear sales.

As the virus has spread across the west over month, there continues to be high numbers of new cases reported daily. Meanwhile, cases in some Eastern countries have started dwindling. However, there has yet to be a definitive answer on whether activewear is growing in both markets

This report aims to observe consumer shifts in Western and Eastern markets to identify opportunities in activewear. More than 56,000 data points were screened from January to April 2020 across women’s activewear brands retailing in the US and Hong Kong markets.

All data used in this report comes from products retailing online as tracked by Omnilytics, unless otherwise mentioned.

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Covid-19 Situation

The Covid-19 situation in the US and Hong Kong was similar at the initial stages. Although the number of cases in both countries started increasing rapidly in March, the US took a turn for the worse.

The US

In the early stages, the situation did not warrant much concern. New York was the first state to take the hit, where the number of confirmed cases spiked in early March. Andrew Cuomo, governor of New York, declared a state of emergency due to the coronavirus on March 7. Soon after, President Trump declared the virus a national emergency.

The number of daily new cases started increasing rapidly in mid March, with the US overtaking China in highest number of cases towards the end of the month. Despite border closure and extension of social distancing guidelines, the US currently holds the highest death toll.

Hong Kong

The SARS pandemic in 2003 saw Hong Kong as the epicentre of the outbreak. SARS left an imprint on the country, clearly seen as citizens adhere to social distancing guidelines and companies implementing work-from-home schedules.

A second wave of the coronavirus occurred in mid March. Shortly after, Hong Kong closed its borders to non-residents, inclusive of transiting flights. The government did not impose any lockdown measures, only ordered temporary 14-day closure of popular gathering spots like karaoke lounges, mahjong parlours and nightclubs. Government measures combined with proactive citizens resulted in no new cases reported on April 20, a sign of Hong Kong  overcoming Covid-19.

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Performance Overview

The two markets were analysed to observe the performance of activewear in in the east and west. The markets were also evaluated to observe consumer behaviour in different stages of the Covid-19 crisis – where insights obtained are indicative of such behaviour.

Nike US has a wide distribution strategy that consists of more than 10 retailers, resulting in a large assortment.

Overall Performance

The total sell-out rate in the US was 21% higher than Hong Kong, signalling a higher overall demand in the first 4 months of the year.

Average discounting over the period was similar in both markets. The new-in rate for the US was high at 65% and low for Hong Kong at 33%.

We’ll dig deeper into the key differences before and after the second waves in each market.

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Performance Overview (cont’d)

Change in Newness

A spike in newness followed the worsening Covid-19 situation in the US in March – 57% of new arrivals were launched after the surge in cases. The opposite is true for Hong Kong, where new-in items since March accounted for 33% of new arrivals for the entire period.

First Time Discounting

In the US market, the strategy for first discounts mirrored newness, evidencing a positive relationship between the two tactics. On the other hand, the number of first discounts in Hong Kong did not fluctuate despite decreasing newness.

This demonstrates the key differences in newness and first time discounting between Western and Eastern markets.

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Performance Overview (cont’d)

Activewear brands are shifting their inventory to be sold online, due to physical store closures. In the US market, activewear brands have released 4,500 more SKUs in March and April month-to-date compared to January to February.

Stock Movement

Online sell-out rates for activewear were below 25% in the first two months of the year for both markets. When the number of cases started rising in March, online sell-out rates in the US surpassed 35%. The performance of the Hong Kong market was different with sell-out at 26% in April month-to-date – indicating that the demand for activewear in Hong Kong did not increase significantly. This suggests the Hong Kong market has not benefited from the global work from home phenomenon in the activewear segment.

Brand Performance

Nike’s US sell-out rates steadily increased after the Covid-19 situation worsened, making it the best performing brand. This is largely due to the brand offering its premium version of Nike Training Club app to US consumers for free. The move saw more than a 100% increase in weekly active users. The engagement with the fitness app translated into sales for the brand.  On the flip side, Puma’s US sell-out actually decreased despite the increase in demand.

Performing brands in Hong Kong differed from the US, where Adidas topped. Lorna Jane had the lowest sell-out, however the brand had the highest uplift for sell-out after the second wave of the virus hit.

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Meet the Author

Ashley Looi

Ashley Looi combines her major in econometrics with her interest in fashion to help brands and retailers uncover actionable insights. She currently produces in-depth reports on the fashion industry and its changing retail scene across the United States, United Kingdom, Australia and Southeast Asia.

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