Gymshark, the DTC sportswear brand, is one of the fastest growing businesses in the UK and is so successful that Shopify, the e-commerce platform underlying it, has turned it into a verb.
Harley Finkelstein, COO at Shopify, held up the Birmingham, UK-based outfit as an exemplar of “the new value equation” when speaking recently at DMEXCO. (For more, read WARC’s report: Gymshark and the new value equation.)
The world is moving away from the traditional marketplace version of retail, he maintained – the one where brands effectively “rent” customers via store intermediaries and where they have to give up some of their profit margin.
But over the past decade “an entirely new value equation has emerged”, said Finkelstein. “Buyers and consumers are now able to buy incredible products from credible makers at an affordable price and interact directly with those makers. And those makers are able to control the entirety of the retail model and keep all the money for themselves to reinvest in the business.”
Shopify, and businesses like it, level the playing field for entrepreneurs and allow them to build new brands, he argued.
Gymshark is one such brand, growing from one man and a sewing machine in a garage to a global £100m business in less than a decade. “Ben [Francis, the founder]’s been making it up as he’s gone along – and that actually is the advantage of the modern retail brand,” Finkelstein claimed.
“What technology has done is effectively make the barriers to entry a lot lower, but also the cost of failure is trending towards zero,” he pointed out. The new breed of DTC brand isn’t afflicted by the “analysis paralysis” of traditional brands and is far more willing to experiment.
Gymshark tried a pop-up in Sweden and it worked, “so more pop-ups; but if it didn’t work, it wouldn’t have mattered because the cost of failure is so low.”
The flip side of that, of course, is that there’s more competition. “But I think if you actually take advantage of the fact that you can try a bunch of different things, you can pivot or you can double down as those things work or don’t,” said Finkelstein.
Sourced from WARC