2003SEM – Sport Marketing Insights Gymshark Case Study ID, Study Guides, Projects, Research of Marketing

Download 2003SEM – Sport Marketing Insights Gymshark Case Study ID and more Study Guides, Projects, Research Marketing in PDF only on Docsity! 2003SEM – Sport Marketing Insights Gymshark Case Study ID: 6858834 2 | P a g e Contents Introduction .................................................................................................................. 3 Importance of Data Analytics ................................................................ 3 Data Ecosystem ........................................................................................................ 4 Customer Analytics and Product Pricing ................................ 5 Customer Relationship Management (CRM) and Consumer Engagement ................................................................................. 7 Recommendations and Conclusions............................................ 9 Reference List .......................................................................................................... 12 5 | P a g e system improved the three main qualities through increased stability, agility and scalability. Although this has not advanced customer analytics, it increases the supply chain efficiency meaning customers receive their orders sooner growing customer satisfaction. Furthermore, it supports Niden and Spriggs’ claim of how ecosystem developments results in organisational growth, in this case, a significant rise in revenue. Customer Analytics and Product Pricing Gymshark’s customers may not necessarily follow the brand with fanatical behaviour (Hunt, Bristol and Bashaw 1999) and use other brands such as Nike however it is possible to create fans with a strong allegiance. The use of the Fan Escalator in figure 3 (Mullin, Hardy and Sutton 2014) can nurture fans to invest more in the brand. Although this applies to new consumers it is crucial in retaining consumers at a high level. However, Gymshark must be wary of assuming that fandom automatically equates to repeat consumption and purchasing which isn’t always true (Mumcu 2017:92). Kruger (2011) demonstrates the Pareto Principle where 80% of the income is generated by 20% of the customers thereby understanding and segmenting consumers leads to increased profitability. Knowing this, a TiMSS plan could be used to create appropriate strategies such as the Aspire Group have done in figure 4 (Farris 2017:72). Adapting this to Gymshark, fans could be viewed as: fitness enthusiasts, casual fitness fans, fitness beginners. Most importantly to Gymshark’s analytics is digital marketing such as website analytics, social media and emails. With no physical store and few events, it is difficult for Gymshark to judge the appearance of its customers and create a generic visual profile. Customers are largely represented through data. Therefore, creating customer profiles which can be analysed leads to ‘faces’ being aligned to data (Kumar and Petersen 2012:215). Big data can obtain this level of analytics through its elements: voluminous, variety, velocity and veracity (Akter and Wamba 2016). These elements form the types of data in e-commerce: transaction data, click-stream data, video data and voice data (Akter and Wamba 2016). Figure 4: Aspire Group 8-point TiMSS Philosophy (Farris 2017:72) Figure 3: The Fan Escalator (Mullins, Hardy and Sutton 2014) 6 | P a g e From this, value must be created for the business and customer to make analytics effective by personalisation, forecasting, customer service and pricing through the TiMSS philosophy. Gymshark can collect customer data through purchasing history, newsletter signups and their ‘Lifting Club’ app. Figure 5 shows what information they collect when consumers register for their newsletter. This information can target customers with birthday deals, gender-related clothing and their interactions with the newsletter (open rate, click-through rate etc.). Transactional data supplies large amount of information such as contact details, age, size, address etc. however these are not available when considering new customers. Additionally, the ‘Lifting Club’ app (figure 6) is highly exclusive therefore those using Gymshark products may use this for a variety of reasons but as they are not part of the ‘Lifting Club’, product consumption is largely unknown. This will be developed in the recommendations. Creating customer profiles, collecting relevant data and segmenting customers can aid Gymshark with a dynamic pricing strategy to drive revenue. When converting sales, analytics can detect when consumers browse the website or have items in the basket for long periods. Email marketing can then prompt unconverted customers to go through with a purchase or alternatively, if the sale remains idle, send a unique discount code to that customer. Therefore, the price has been adjusted to them to ensure they make the purchase. Likewise, understanding the customer demographic may expose students as a large percentage, or conversely an uncovered target segment, leading to student discounts shown in figure 7. Alternatively, markdown pricing strategies can be used when trends highlight quiet periods. Gymshark owner Ben Francis, highlights low sales in August and sales are boosted at times such as Christmas and Black Friday (Francis, 2018). Markdown pricing can be perceived as price segmentation mechanism between consumers with different price sensitivities (Bodea and Ferguson 2014). In relation to Gymshark, this may apply to fitness beginners (TiMSS philosophy) as this can create the incentive to collect initial sets of transactional data. Figure 5: Newsletter Sign-up (Gymshark 2019c) Figure 6: Gymshark Lifting Club App (Gymshark 2019b) 7 | P a g e Customer Relationship Management (CRM) and Consumer Engagement CRM is broadly defined although Buttle’s (2008:3) managerial perspective is that ‘CRM is a disciplined approach to developing and maintaining profitable customer relationships’. Creating relationships with customers is fundamental to repeat purchases therefore it is important to understand each customer’s financial value within a transaction and over their lifetime (Kumar and Petersen 2012). Comprehending this value relies on developing a relationship which only forms when consumers progress from a state of independence to dependence (Heath and Bryant 2000). Previous beliefs were that relationships and customer value only emerged during service interactions whereas a contemporary perspective denotes that customer value is created before and after purchases and measured throughout the consumers experience (Heinonen, Campbell and Ferguson 2019). To maintain their rate of growth, its important that Gymshark focus on innovative strategies such as the growing marketing methods of social media, mobile marketing and customised campaigns (Kumar and Petersen 2012:224). For Gymshark to establish customer value from the CRM systems, data should include individuals, interactions, ‘LIFT’ event attendances, demographics and purchase history so that marketing campaigns can be aimed at individual customers (adapted from Mathew 2017). The outcome of CRM is largely to achieve a return on investment (ROI) linking back to the aforementioned Fan Escalator where customisation can aid retention and drive sales. Saul (2010) proposes ‘emotive customer bonding’ where consumers are immersed in a complete brand experience and to create a strong value of the customer. Furthermore, strategies with an outcome that customers can value, fitness and health, can increase the bond and allow customers to feel part of something more than a brand. Analysing the growing method of social media, figures 8,9, 10 and 11 display the performance of Gymshark’s social media channels according to analytics website Social Blade. From Social Blades’ grade ranking system, Gymshark’s social media performance is positive through Facebook and Instagram but underperforming on Twitter and YouTube. Driving revenue from these platforms is crucial for consumer engagement to be successful. Figure 7: Gymshark’s Student Discounts (Gymshark 2019c) 10 | P a g e bond by increasing customer involvement with the brand and developing an experience where Gymshark fully represents health rather then being sought as just a retailer. Goal setting is moderated by a commitment towards the goal which is conceptualized in various ways yet reinforces a need to reach that goal and therefore offer more involvement (Klein, Cooper and Monahan 2013). Stemming from the first recommendation, Gymshark should gain a greater understanding of how their products are consumed. Currently, workouts involving Gymshark apparel are viewed by the business through their ambassadors and the ‘Lifting Club’ app with both returning little insight. A second recommendation proposes altering the current app or develop a new app allowing all customers to access workouts and track their fitness. The ‘Lifting Club’ can still remain exclusive to retain those current Gymshark and fitness consumers at the pinnacle of the fan escalator. Moreover, there is still a target for casual fitness fans and beginners to grow into enthusiasts and be more involved. Data from the app can further target customers by aiming certain fashion lines at customers who perform certain workouts. For example, those who focus on cardio exercise can be targeted with running apparel. Data can also be collected based on the frequency, workout type, equipment used and fitness profile and be added to the CRM systems. Notably, competitors Nike have achieved success through their fitness apps and have little competition from other sport apparel brands. The final recommendation is to ensure social media platforms are used effectively to produce maximal revenue as figure 13 shows Gymshark’s performance in context of competitors. Reflecting on figure 10, Instagram user engagement is low, inhibiting the success of ‘shop the Instagram look’ section of the website as well as Instagram itself. Figure 12 evidences that increased social media activity and engagement, albeit during a major sale period, can used effectively alongside campaigns to drive revenue. Again, linking with the second recommendation, competitions via social media in conjunction with the fitness app can increase engagement by rewarding customers for working out and posting content on social media. For example, a competition on Instagram could encourage customers to upload a screenshot of their workout, tagging Gymshark in the post with a random participant selected to win a prize. Besides boosting involvement, it would stimulate a word- of-mouth style promotion reaching the followers of those who enter the competition. Figure 13: Fitness Brands by Instagram Engagement Rate (CampaignDeus 2018) 11 | P a g e In summary, Gymshark’s focus on being an e-commerce retailer demonstrates where companies need to target modern retailing to be successful however there is still a wide gap between Gymshark and established brands. Operating online presents the opportunity to streamline the business through data analytics and the recommendations presented can achieve increased engagement and offer additional streams of revenue. 12 | P a g e Reference List Akter, S. and Wamba, S.F. (2016) ‘Big Data Analytics in E-commerce: A Systematic Review and Agenda for Future Research’. Electronic Markets 26 (2), 173-194. Baird, C.H. and Parasnis, G. (2011) ‘From Social Media to Social Customer Relationship Management’. Strategy and Leadership 39 (5), 30-37. Bodea, T. and Ferguson, M. (2014) Segmentation, Revenue Management and Pricing Analytics. London: Routledge. Bukstein, S. (2012) ‘Evolution and Impact of Business Analytics in Sport’ in Sport Business Analytics: Using Data to Increase Revenue and Improve Operational Efficiency. ed. by Harrison, C.K. and Bukstein, S. New York: Auerbach Publications, 1-22. CampaignDeus (2018) Ranking of fitness brands by engagement rate on Instagram influencer collaborations in the United Kingdom (UK) in the 1st half of 2018 [online] available from <https://www.statista.com/statistics/895220/instagram-engagement-rates-by-brands-in-the- fitness-sector/> [15th March 2019] Dees, W., Bennett, G. and Villegas, J. (2008) ‘Measuring the Effectiveness of Sponsorship of an Elite Intercollegiate Football Program’. Sport Marketing Quarterly 17(2), 79–89. DeLone, W.H. and McLean, E.R. (2003) ‘The DeLone and McLean Model of Information Systems Success: A Ten-Year Update’. Journal of Management Information Systems 19(4), 9-30. Farris, M. (2017) ‘The Aspire Group’s Ticket Marketing, Sales, and Service Philosophy’. in Sport Business Analytics: Using Data to Increase Revenue and Improve Operational Efficiency. ed. by Harrison, C.K. and Bukstein, S. New York: Auerbach Publications, 69-88. Francis, B. (2018) How Can We Ship Up to 50,000 Orders Per Day - New Gymshark Warehouse Tour [online] available from <https://www.youtube.com/watch?v=Mv_HpZe6cH4&t=376s> [25th March 2019] Green, F. (2019) Winning with Data: CRM and Analytics for the Business of Sports. London: Routledge. Gymshark (2016) About Us [online] available from <https://uk.gymshark.com/pages/about-us> [18th March 2019] Gymshark (2019a) Athletes [online] available from <https://www.gymshark.com/blogs/athletes> [19th March 2019] Gymshark (2019b) Gymshark: The Lifting Club (Version 1.02). [Mobile App]. [24th March 2019] Gymshark (2019c) Home [online] available from <https://uk.gymshark.com/> [22nd March 2019] Gymshark (2019d) Student Beans [online] available from <https://uk.gymshark.com/pages/studentbeans> [24th March 2019] Heath, R.L. and Bryant, J. (2000) Human Communication Theory and Research: Concepts, Contexts and Challenges. New Jersey: Lawrence Erlbaum Associates.