Here’s Why Athletic Brands Are Betting Big On Experiential Retail

It’s become evident that many people traded in their suits for sweatpants during the pandemic. They also bought kayaks and workout gear, given that time was no longer a valid argument to avoid exercising. As a result, athletic, sporting goods, and athleisure brands thrived. And now, they’re focusing on bringing their brands to customers in real life.

The sporting goods industry has grown exponentially during the pandemic, and shoppers are seeking physical experiences.

According to McKinsey’s report on sporting goods, global sales in the sector were €295 billion ($320 billion) in 2021, up 14% from 2020. The consulting firm expects sales to grow to €395 billion ($428 billion) in 2025, increasing about 33%. They also predict that “many players will repurpose physical locations as experience- and service-driven elements of an omnichannel offering.”

This week, Champs Sports opened a new experiential concept called Champs Sports Homefield, located in Pembrooke Pines, Florida. It’s 35,000 square feet with a regulation-sized basketball court, multi-sport court, and a Champs Sports Combine digital VR system that can size up players’ athletic skills. In addition, the store has every big-name fitness brand, a try-on treadmill for running shoe shoppers, and enough space to host community fitness classes.

A similar concept opened last year by Dick’s Sporting Goods called Dick’s House of Sport, which includes space to test products and play just about every sport, including rock climbing, golf simulators, and activities like baseball games and bike servicing. People are seeking entertainment opportunities, so why not incorporate those into shopping? Retail is no longer about transacting; it’s about experiencing and building relationships with a brand.

Experiences in retail stores can increase customer loyalty and long-term value.

“When designing these experimental retail sports experiences, there is a lot to be learned when we study different types of environments such as theme parks and professional sporting centers. Understanding these models and how they draw people in by combining food, merchandise, entertainment, and experience can help create new innovative retail ideas that entice consumers out of their homes, foster brand loyalty, and encourages repeat visits,” shared Greg Lyon, Chairman and Principal of Nadel Architects.

Nadel recently worked on The Gallery of Sportsman’s Club and Range, the Denver area’s first experiential shooting range. The space includes 15 shooting lanes, a virtual shooting range, a private gunsmith, a full-service lounge featuring a full bar and kitchen, a walk-up coffee bar, and over 3,000 square feet of retail. It’s just one example of how brands are combining sports activities with retail stores.

The experiential retail trend is far from new, with Lululemon being one of the pioneers of the concept in athletics. It’s hosted in-store community events and classes since its early days. The brand now has 387 North American locations and 188 internationally. Total sales in 2021 were $6.25 billion, up more than 40% from 2020, and the company has a goal of doubling sales to $12.5 billion by 2026.

Yesterday, Lululemon announced it would be launching a new membership program, which provides exclusive benefits to loyal customers for clothes, events, and classes. A free option will include access to early product drops, exclusive items, and in-person community events. And the paid option will cost $39 per month and have everything from the free option plus a membership to the company’s at-home fitness platform, Mirror. In the company’s Analyst Day presentation, they stated, “When guests sweat more, they spend 15% more,” indicating the benefit of experiential programs. This move will help lower Lululemon’s acquisition costs, increase its Mirror adoption, and likely increase attendance at in-person events.

It’s widely known in the retail industry that when customers shop in-store, they spend more than when they shop online. So, when brands add experiences to their retail stores, shoppers create memories and relationships with the brand, which in turn, establishes valuable long-term customers.