Placer Bites: Puma, Nike, Lululemon and the Retail Vacuum

The Retail Apocalypse narrative is mixed with pure facts, a great deal of speculation and some equally pure myths. One of the elements that is certainly true is that there has been a wide range of closures – especially for brands looking to be an ‘everything for everyone’ option. And a wide range of closures leads to a vacuum – literally and figuratively. 

So what’s going to fill it? 

One trend to keep a close eye on is a range of product-oriented companies – Nike, Puma, Lululemon – that view physical retail spaces as an ideal way to boost their overall performance and deepen the relationship with their customers.

Why? We dug into the data to find out.

Traffic is on the Rise

Starting with Nike, the brand saw visits to their locations grow 38.5% and 62.6% above the baseline in July and August 2019 for the period from July 2017 through September 2019. These show massive increases from 2018 where the same months rose 24.3% and 30.3% above the baseline.

And this investment has taken notice and driven similar approaches from rivals. Puma, a brand that is also looking to more effectively tap into the NBA appeal that was so central to Nike’s rise, is experiencing a similar upward trend. While Puma visits are significantly lower than Nike, the brand saw an equally strong summer with visits rising 54.2% and 79.9% above the baseline for the same period of time. This is a massive increase over the 6.4% and 11.0% rises in the same months in 2018. This strongly reflects the growing focus this strategy has taken within Puma and the large investment that has been made in increasing their physical locations in the US.

Lululemon Paves the Way

Another branding riding high on the athletic wear wave is Lululemon. The brand has seen tremendous growth in every month in 2019 compared with the same month in 2018, and this trend continued throughout the summer. Visits nationwide were 39.9% and 43.9% above the baseline for the period from July 2017 through September 2019, well above the 6.3% and 1.3% rises in the same months in 2018. Even the September dip was less precipitous with a baseline drop of 2.4%, far less than the 19.5% in 2018.

And the momentum isn’t tailing off. Looking at visits from the start of October 2019 through the 26th shows that average daily visits are up 41.6% on the same period in 2018. This is an especially huge jump considering the difference between 2017 and 2018 visits was an increase of less than 1%.

Takeaways

Athletic wear is one of the most exciting sectors in apparel, but the tactics being deployed so effectively by giants like Nike, Puma and Lululemon could have massive ramifications across the retail sector. With these companies turning increasingly towards an owned presence offline, expect other brands to follow. From Direct-to-Consumer players like Everlane and Warby Parker to other product companies that were less focused on selling directly to the consumer, expect much of the new retail vacuum to be filled by this market segment.

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