Store of the Future   //   February 21, 2024

Brands like Athleta are betting on product swaps as a customer acquisition tool

On a crisp winter day earlier this month, several thousand people bundled up and waited in lines across five U.S. cities to snag a free pair of Athleta’s Salutation Stash Tights. The only requirement? They had to bring a pair of leggings from any brand to swap in return.

The event, which Athleta held in partnership with ThredUp and called “Move Up,” was the company’s first time giving away products in this manner. In total, Athleta gave away 3,000 pairs of tights: 1,000 in New York City, 500 in Miami, 500 in Dallas, 500 in Washington, D.C. and 500 in Chicago. There was so much demand, however, that Athleta ran out of tights to give away, Shannon Damen, chief commercial officer at Athleta, told Modern Retail. As a result, Athleta gave the remaining people in line a coupon for 20% off one item in the store.

Product swaps like these are becoming a more common way for brands to bring in new customers, especially as acquisition costs continue to rise. Lululemon and the shower head company Jolie, for instance, have held “dupe swaps” to encourage shoppers to try out their brands and see how they stack up to competitors. Likewise, Athleta turned to one of its highest-ranked products to win over more of its demographic: people interested in movement and exercise. Although brands continue to feel effects from inflation, they aim to play the long game with product swaps. By giving away products now, they hope to increase traffic, engagement and sales in the future.

Athleta, like its parent company Gap Inc., has grappled with shoppers spending less on discretionary items. Athleta’s net sales for its third quarter ending in October were $279 million, down 18% compared to the year before. To counteract this, Athleta has since refined its product and event strategy to host more drops and activations. Giving away 3,000 pairs of Salutation Stash Tights — which typically retail for $109 each on Athleta’s website — adds up to more than $300,000. But, Damen said, Athleta is “so confident in the quality… that we’re willing to give them away for free so that we can convert lifelong fans of the brand.”

“We feel so proud of this product,” she said. “And we know once customers experience the quality, they’ll never go back to their old brand. That’s why we titled the event ‘Move Up,’ which was a nod to the upgrade. Give us your best, and we’ll give you better.”

The event was also a way to showcase the brand’s resale partnership with ThredUp. Athleta launched a resale partnership with ThredUp in 2022 to sell gently-owned workout wear. The program, initially called “Always Athleta” but now called “Athleta Preloved,” has recirculated 525,000 items to date, according to Athleta’s website. “Move Up” marked the first time Athleta and ThredUp partnered on a trade-in event of this kind. A number of ThredUp employees attended the New York City event to talk to shoppers and facilitate swaps.

At each location, Athleta collected email addresses from participants, many of whom had not bought from Athleta before, Damen said. Athleta also saw a 200% increase in engagement in Instagram posts promoting and recapping “Move Up.” While Damen said Athleta is still “digging into the results from a financial perspective,” all proceeds from reselling the swapped leggings on ThredUp will go to Athleta’s Power of She fund, which bestows community-based grants and advocates for fitness for women and girls.

Athleta hopes to enact more giveaways in the months to come, with a focus on key products. “It’s our goal to figure out how to continue to scale this and bring it to life in other areas, other cities and maybe in much bigger and even more amplified ways,” Damen said. As far as swaps, “it could be broader than tights, for sure, as we move forward,” she added. “But, what we will continue to do is make sure that it’s our best and our brightest [items] that we’re confident people need to get into immediately.”

Melissa Minkow, director of retail strategy at CI&T, told Modern Retail that product swaps may appeal to customers who were curious about a brand but didn’t have the prior impetus to test it out. At the same time, Minkow has “mixed emotions” regarding product swaps, especially ones that involve swapping lower-cost items for higher-cost ones.

As of October, 79% of shoppers traded down to save money, per McKinsey & Company, with many opting to buy cheaper, private-label goods rather than big brands. Unless customers decide that more expensive products they’ve received via swaps are worth the investment, they may view these occasions as “one-off moments,” Minkow said.

“This type of campaign generates a lot of buzz, which is great for a fixed amount of time, but after a while, if the conversion isn’t there, it doesn’t pay for itself,” she said.

For this reason, brands are being careful not to hold swaps too often. Lululemon’s dupe-swapping event, which drew 1,000 people and gave away $98 Align leggings, spanned two days in May. Since September, Jolie has offered to replace any filtered showerhead brand worth $120 and above for free, but it does not plan to run the exchange forever, CEO Ryan Babenzien told Modern Retail.

As far as Athleta’s recent swap goes, “we had so much fun with it, and our consumers had fun with it,” Damen said. For future swaps, Athleta is considering offering more services, like free juices, to people in line. “We’re looking at ways to optimize [the experience],” she said.