Speedo: Inspiring Everyone to Dive In
Innovation and Community Swimming for All
Context
Founded in 1928, Speedo is the global leading swimwear brand that has succeeded and thrived through changing market landscapes. The reason behind the Company’s longevity is its ability to adapt to its surrounding environment through maintaining a close alignment of its business and operating models. Today, Speedo’s business model is being the swimwear for all while continuing to build on its unique angle as the “fastest” and most technologically advanced swimsuit for competition. There are two key areas where Speedo’s operating and business models align to create value for its customers.
Innovation
Central to Speedo’s business model is innovation and constructing the most efficient swimsuit for the elite swimmer. Innovation was actually what brought Speedo to the public spotlight in 1928 when Speedo created the Racerback suit (the world’s first non-wool swimsuit). Since then, Speedo has consistently produced cutting-edge suits, usually right before the summer Olympic Games when swimming gets much of its publicity. For example, in 2000 Speedo launched the Fastskin® swimsuit inspired by shark skin and today’s latest suit, the LZR Racer X, is considered to be the “fastest” with compression and water repellency features.
https://www.youtube.com/watch?v=AkxkPceKP4Y
Supporting and integral to the business model is Speedo’s research & development facility, particularly the Aqualab. Its operating model is such that not only does Speedo bring NASA specialists to work on understanding the aerodynamics of body movement, but it also brings Olympic swimming champions for user insights. For instance, the aforementioned LZR Racer X is designed with lightweight fabric that enhances water repellency while incorporating a compression system for drag-reducing streamlined form. The intellectual property developed from Aqualab, as well as the extensive and diversity of resources Speedo funnels into research, operationally supports and creates the competitive advantage of creating the fastest suit and reinforces its business model. None of its competitors, whether it’s swimming-specific TYR or global athletics brand Nike, invest as much in innovation as Speedo does.
Swimwear for All
In addition to being the innovators of swimming, Speedo has an overarching mission to be the swimwear of choice for all, from the recreational swimmer to the Olympic champion. Total addressable market of global swimwear/beachwear is expected to reach $20 billion by 2020 and to capture this, Speedo has broadened its business model recently to target the non-competitive consumers. It hired brand chief Jim Gerson (formerly at The North Face) in 2010 to tackle the issue of brand expansion to the broader market. Gerson faced the similar issued at North Face in the early 2000s where they converted from a mountaineering brand to an aspirational brand. Post Gerson joining in 2010, Speedo focused on expanding the customer base to non-competitive athletes, a lot of which stemmed from the partnerships it formed (see final section).
From an operational perspective, Speedo became the first swimwear company to launch a digital platform to embrace the broader swimming community. Pace Club, which rolled out in 2011 (latest version called Speedo Fit), expanded swimming’s relatively “individualistic” sport to an interactive community-based environment through having users share their training programs, view technique tips from Speedo professional swimmers, and engage through social media. This rollout is consistent with Speedo’s shift to increase its emphasis in its aspirational lifestyle product line. Speedo now categorizes its swimwear by performance, fitness and recreational, all having equal importance on its website.
Combining Innovation and Broad Community
What is unique about Speedo is its success in integrating both goals of performance and expanding to the broader community. While on the surface these may seem to be contradictory, Speedo has leveraged its elite swimmers (Speedo’s core marketing is through athlete sponsorship) to integrate professional swimming to the community through broader social causes. An example of this is Speedo’s “Art of the Cap” program where Olympians and artists collaborated to create swim caps depicting stories of various community-wide causes. For example, Olympic gold medalist Dana Vollmer shared her story of overcoming life-threatening heart condition and her integrated heart cap links closely to the Simon’s Fund to raise awareness of cardiac arrest in children. This combination has led to high performance, as more gold medals have been won in a Speedo than in any other brand in every Olympics (innovation indicator) and record-high revenues was fueled by the non-performance swimwear segment in 2014 (community-reach indicator).
Conclusion
Overall, Speedo’s 87-year successful history is due to its close business and operating model alignment that drive market leading performance. It has maintained its key ingredients behind creating cutting-edge swimsuits while embracing each and every swimmer.
References:
- Morrison, Jim. How Speedo Created a Record-Breaking Swimsuit. http://www.scientificamerican.com/article/how-speedo-created-swimsuit/
- Pentland website; http://www.pentland.com
- Philip Watts Design, Aqualab. http://www.philipwattsdesign.com/bespoke/speedo-hq-nottingham
- PVH website; http://www.pvh.com
- S&P Capital IQ; Speedo, Pentland, PVH, TYR, and Nike. https://www.capitaliq.com
- Speedo record sales help owner to big revenue rise. Herald Scotland, http://www.heraldscotland.com/business/13166892.Speedo_record_sales_help_owner_to_big_revenue_rise/
- Speedo website; http://www.speedo.com
- Swimming World. http://www.swimmingworldmagazine.com
- TYR website; http://www.tyr.com/
- Zmuda, Natalie. Speedo Wades Into the Social-Media Pool. http://adage.com/article/news/speedo-wades-social-media-pool/228900/
Jessica,
What an interesting read; I hadn’t thought about this brand in a while so it was very informative to see where it is headed to stay competitive. I wondered why I don’t think of Speedo as my go-to swim suit brand and I realized that it is because my association of the brand is one of competitive swimming versus one of recreational swimming. It was thus interesting to see that the company is looking to expand to attract non-competitive consumers like myself and it made me wonder whether that is even a good move at all. Speedo as you noted has an edge amongst other athletic brands due to its focus on innovation and technology. By trying to appeal to a broader market I wonder if these features will extract the value that they do amongst competitive swimmers. I would think that the non-competitive consumer would be more focused on design and price point and so I wonder if the brand’s technologically advanced offerings would be as appealing to lead non-competitive buyers to start thinking of Speedo as their brand. I do think however that launching their digital platform is a great idea to connect younger swimmers to the brand early on. It is harder though for this feature to help them penetrate a market where non-competitive consumers already have a preferred brand.
Thanks, Andrea. Great points. In Speedo’s design and marketing strategy, the competitive swimwear brand is completely separate from the leisure swimwear brand in terms of R&D, marketing and advertisement. For the leisure swimwear line, Speedo has started to collaborate with designers to make it more fashion forward, a stark contrast from the shark-like suits for competitive swimming. It’s reason to broaden its scope really is to capture the growing market for leisure swimwear and making it more similar to how we view North Face jackets today. Given this is a recent development, I’m excited to see where this goes in the next couple of years.
Great post Jessica.
It seems Speedo was too successful with their R&D efforts, given the banning of their advanced full-body suits in competitive swimming. I wonder if this recent move into a lifestyle brand is to distance themselves from the R&D side of things?
Good question, Andrew. Actually, after the full-body suits were banned, Speedo went back to the Aqualab to develop its next suit (maximum knee-length, no arms, racer-back) based on the feedback it received from competitors using the banned suits. It increased its R&D efforts to find ways to create an “approved” suit while still learning from the benefits of the prior version. The main controversy around the full-body suits was that it devalued athleticism, as once you put on the corset-like suit you essentially became more streamlined and gained an effective six-pack abs. I think the core of Speedo’s business will still be surrounded by its technology advantage, with the lifestyle brand as a way to capture some of the growing market segment and making it more similar to how we view North Face jackets today.
Great pick Jessica! I spent half my childhood in a Speedo suit and I love the brand! I think a mark of their success is the fact that Speedo has become synonymous with racing suits in general. It will be interesting to see how Speedo grows its fashion business as it seeks to reach more recreational swimmers with supporting its competitive businesses like racing, wearable technology, and accessories (and how they support their R&D efforts to achieve these goals).
Thanks, Heidi. It’s such a recent initiative but I’m also looking forward to seeing how they develop the lifestyle brand. They recently launched the Sculpture Shapeline swimwear, which is essentially the closest thing to a made-to-measure swimsuit currently available to consumers, and have also collaborated with designers for more fashion-forward swimwear designs.
Great job Jessica. I distinctly remember the evolution of Speedo’s suits growing up on a swim team. It is amazing the changes over the years, especially in regards to material and how they integrate their improvements beyond the Olympic speed suit level. The quality at the “swimming for everyone” level is of the highest quality and contains aspects of innovation that you see in the higher level suits.
Thanks, Lauren. Totally agree, it’s also crazy how much longer these suits last now even for training purposes. Speedo’s Endurance+ fabric suits for training now last 20 times longer than conventional fabric, which is a huge plus in not having to deal with the fading colors and sagging fabric.
This was very interesting. Like others above, I had no idea of their presence in the market for more casual swimmers. I think the biggest challenge they face is actually as a victim of their own success, perhaps some people make that false assumption that Speedo is actually beyond their ability, when in fact it should be completely accessible to the common customer. In any case, it’s fun to learn about a company who has become so associated with their product that people refer to “Speedo” when a lot of times they’re just talking about swimsuits. With that strong of an association I think they’re in good shape.
Thanks, Matt. Agree that this is the biggest challenge Speedo faces in expanding to a broader market. As a way to make it more accessible, they have started filming advertisements of their professional swimmers in leisure, fun swim prints. Speedo is definitely trying to bridge the gap between the two, but only time will tell how successful this recent change will be.
Thanks, Adam. Totally agree, that’s exactly what Speedo has also done in addition to expanding to the lifestyle swimwear. Speedo has expanded significantly into triathlon, covering everything from swimwear to footwear to packs; in fact, it’s triathlon TriClops pack won the Red Dot Product Design Award last year. However, a drawback I see in terms of expanding into non-water sports is the presence of dominant players with first-mover advantages in those sports.
Jessica, great post. Similar to many other commenters, I’m most intrigued by Speedo’s entrance into the recreational swimwear market. The North Face example is an interesting analogue, but I think there are two key differences between the brands that cause me to be skeptical of Speedo’s ability to replicate North Face’s success.
1. In both its mountaineering and its mass market applications, North Face jackets are valued by customers for their ability to insulate the wearer from the harsh elements. As a result, it was probably fairly easy to market the product to mass market consumers – “If this jacket can keep climbers on Mt. Everest warm, it can certainly keep me warm.” On the other hand, Speedo’s value proposition to competitive swimmers is its performance attributes, which has zero relevance for the mass market consumer who cares much more about style and fit.
2. Before entering the mass market, North Face was fairly unknown outside of the mountaineering community. There were no strong brand associations. Everyone knows Speedo and associates it with competitive swimming and perhaps even more so, the triangle, underwear looking thing. These perceptions can be very difficult to overcome, and it is even more challenging to convince a consumer to switch from their preferred brands to a brand that they’ve never thought of as pertaining to them.
Thanks, great points. I agree that Speedo, unlike North Face, has prior associations with competitive swimming and thus perhaps has a more difficult time converting than if it’d started with a blank slate. Perhaps one advantage it does have, however, is the broader brand awareness that North Face did not have outside the mountaineering community. Thus, it was relatively easy for Speedo to partner with community organizations such as the American Red Cross, for example, as it forayed into the recreational swimwear. You’re taking a trusted, known name and joining forces with an organization that most people know from their recreational swim / beach days. When Speedo started this partnership with American Red Cross, it aligned the two organizations’ missions to make swimming safe and fun, using a trusted swimwear brand with new, fashion-forward designs that appeal to the general. Like you, I’m intrigued to see how this develops in the next couple of years as Speedo builds out its non-competitive swimwear lines.