According to Gallup, only 25% of Millennials are fully engaged with top brands. This is direct evidence of a market gap. Legacy athletic and outdoor brands who have spent decades building companies based on brand identity face a serious threat from new, more agile companies that reject the traditional connotation of a brand.
This disconnect can be illustrated by observing the conflicting differences between the aspirations marketers have placed at the foundations of legacy brands with the actual aspirational goals of millennials. Top brands continue to drive performance as a guiding principle when only 13.5% of this market segment is performance-oriented. The other 63% of millennials (53 million in the US) who mainly do physical activity for fitness currently do not care about cracking the two hour marathon or summiting K2. For them it is all about maximizing fun.
Strava and Hoka understand this gap and are leaders of this new trend. They exemplify the values of future and current consumers. Notice the people, their stories, and the values conveyed in Strava’s videos and how it differs with that of Nike’s recent video content.
For Hoka it’s all about maximizing fun and getting out on the trail. Their high spirited videos present additional value to their customers by providing education and inspiration.
To better understand this millennial customer segment and the value proposition gap, we must first look into the athletic environment that this generation grew up in.
The 1970s and ‘80s saw an explosion of performance footwear, with Nike quickly becoming a dominant brand. Shoes were designed to enhance an athlete's performance in a particular sport, creating specialized product. Sports, which were previously viewed as leisurely activities, gained mainstream appeal as a culturally significant cornerstone of society. All of a sudden, sports defined America.
The 1990s and 2000s marked the peak of sports in America. Sport icons became superstars. Brands marketed these elite athletes as superheroes, larger-than-life figures who were idolized by fans. This was a time when celebrities were famous for the sake of celebrity alone, and a fantasy culture was perpetuated through new digital media channels.
The aspiration to be a million-dollar athlete heavily influenced the young Millennial generation. Team sports became a job, with parents buying into their aspirational goals and unconsciously imposing them on their children.
To become an athlete, Millennials had to be fully dedicated to a single sport. Year-long training and extended seasons did not allow for anything else. There was little time for variety or diversity. While many participated in organized sports as young children, by the 6th grade most kids were pressured to pick a single sport. Due to the extreme competition and restrictive nature of team sports, there has been a 10-30% decrease in high school team sports programs over the last decade .
The natural backlash that resulted from extreme intensity in organized sports ran deep. Over the last 15 years, team sport participation has steadily declined according to the Sports & Fitness Industry Association as fitness-centric participation has drastically increased. The Millennial generation isn’t interested in the pressure and expectations associated with professional sports. They have seen through the advertising and the hype, realizing that they are merely being sold a false dream.
What has emerged now is a generation that wants to engage with their friends and share experiences together. Millennials live a digital and active lifestyle. They desire a variety of experiences and are all about having fun. When compared to previous generations, they share more similar values of those from the 1950s and 60s when sports were fun, when it was about engaging with others, rather than besting them.
This circulation of trends is prevalent throughout American history. New generations tend to reject their parents’ generation causing the top brands in America to last no more than 40 years. This constant change provides opportunities for new brands to emerge in matured markets. Such is the case with Nike, Adidas, and New Balance today. Millennials view these legacy brands as their parents’ brands, ones which they do not relate to, creating an opportunity for new brands to fill this generational gap.
Credit must be given to Adidas for their recent pivot which indicates their knowledge that performance-focused marketing does not work. Their shift to become more of a fashion and culture brand is quite drastic but proving to be well received. This proves that a hard pivot is possible for top brands but is certainly not easy.
This is why new demand for a more relatable brand is being filled by smaller companies which have gained traction quickly due to the use of digital networks, allowing them to grow exponentially quicker at the fraction of the cost when compared to traditional marketing tactics. Such growth has already been observed in our work for one of our clients where we helped them gain 55 million impressions in only 4 weeks. Exponential growth is possible in this digital era, and will soon become the new competitive media for top brands in the US.
Millennials are eager to adopt something that they relate to, something that they can call their own. As the emerging consumer, they are currently underserved in the athletic industry. The opportunity to fill this gap is available now and will be filled in the next two years. Millennials want a brand that motivates, guides, and connects them through experiences. The time to act is now.