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The Duopoly Fade

 

As more and more players enter the toning category, pricing pressure and market share loss are beginning to rear their head in what was once a two horse race.

The latest weekly scan data confirms a growing trend in the toning category.  This is no longer a two horse race, dominated by Skechers and EasyTones.  The data below shows the emergence of “other” brands in the category as well as declining ASP trends.  There’s no question that increased competition was imminent in the category.  After all, toning has enjoyed one of the most spectacular category innovations we have seen in a long time.  However, success breeds imitators.  Which in this case means competition for shelf space, new players/brands/SKU’s at sub-$100 price points, and ultimately price/margin compression. 

One caveat to note.  Skechers recently noted that it is in the midst of a transition towards new styles and lines, which is resulting in clearance of some older SKU’s.  We do believe that this is in some part a reason for pricing pressure on the category.  We’ll be watching closely as product transitions towards fall, to see if ASP’s will (ever) rise again, or if competitive factors become the dominant force in impacting pricing.

Take a look at the charts below to see the changes underway as “toning” appears to be transitioning from a duopoly to a much broader range of players.

The Duopoly Fade - 1

 

The Duopoly Fade - 2

 

The Duopoly Fade - 3

 

The Duopoly Fade - 4