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It’s no secret that sportswear upstarts are giving their incumbent counterparts a run for their money when it comes to customer engagement. This is reflected in the growing market share of challenger brands, as well as the exponential growth of players like On, which has grown its sales 50 percent annually between 2019 and 2024.
This was the central theme explored on Wednesday, June 9th at The Times Square EDITION in New York, where BoF Insights, The Business of Fashion’s data and advisory team, gathered industry leaders to examine the strategies powering the growth of today’s most dynamic challenger sportswear brands. The presentation was based on exclusive research by BoF Insights and Quilt.AI, BoF Insights’s AI partner.
Michelle Wiles, Senior Director of Advisory at BoF Insights, presented findings from three months of customer conversations and user-generated content about challenger and incumbent sportswear brands on Instagram, TikTok and Reddit in the US and UK, and Weibo and Douyin in China. The presentation was followed by a cocktail reception with industry leaders from VF Corp, SC Holdings, Ugg, Centric Brands, among others, in attendance.
The event highlighted three key strategic differentiators that are driving challenger brand success, pointing towards a new sportswear brand playbook where lifestyle resonance trumps performance credentials. A summary of the key discussion points is below.
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Product as Brand Architecture
“Everyday versatility” was the top customer conversation theme about challenger brands (representing 37 percent of the conversation), according to BoF Insights’ analysis. Conversations under this theme focused on how products seamlessly integrate into consumers’ everyday lives, such as On’s Cloud 6 sneaker which is often worn casually as well as for sports. This is in contrast to the customer conversation about incumbent sportswear brands, in which the top theme was “celebrity influence” (representing 38 percent of the conversation), indicating aspirational appeal plays a bigger role in the strategy for these brands. For example, incumbent Puma leverages star power from the likes of ambassadors such as Dua Lipa and Rosé from Blackpink.
Reimagined Collaborations
Rather than celebrity endorsements or athlete-focused sponsorships — the historic domain of legacy sportswear giants — challenger brand collaborations with luxury players that add exclusivity — such as New Balance x Stone Island — have gained significant attention from customers, according to BoF Insights. One of the top three customer conversation themes about challenger brands is “athletic luxury” (representing 18 percent of the customer conversation), with customers expressing excitement about sportswear products that blur the lines between functionality and high fashion.
Uplifting Existing Communities
A defining trait of challenger brands is their recognition that sport is increasingly a collective ritual. These brands have leaned into community-centric experiences, like run clubs, team training and wellness sessions, to associate their brands with community belonging, identity and emotional connection. “Community” accounts for 14 percent of challenger brand conversation in the research and 11 percent for incumbent brands. This reflects a converging of strategies — while players like On and Lululemon engage in community events and grassroots engagement strategies, so do established players like Adidas, whose activations include neighbourhood soccer leagues in some cities in the US.
Working with brands and investors across fashion, beauty and luxury, BoF Insights applies AI-powered methodologies such as these to examine brands’ cultural relevance and determine strategies for future success. From identifying untapped customer segments to developing lifestyle positioning strategies, we help our clients sustainably grow for the long term. Get in touch to find out how we can support your business.
