British wetsuit and multisport apparel firm Zone3 has built a strong following in its home market in recent years. As the brand gears up for further international expansion, Zone3 has just launched in the US – the world’s largest triathlon market. Taking a look at the story behind the brand, we caught up with James Lock, owner and founder of Zone3.
triathlonbusiness.com (TriBiz): Tell us a little bit about you and your background.
James Lock (JL): I have been involved in competitive sport since an early age. I was a county swimmer and runner and discovered triathlon when I joined Loughborough University to study Engineering; and have subsequently raced at an elite level for many years.
I had developed entrepreneurial ideas from an early age and at Loughborough started selling swim based products in order to supplement my student grant. I decided to develop my business ideas further after winning a cash prize in the Loughborough University Business Plan Competition and a place at the University’s Innovation Centre.
This enabled me to start up a business with limited overheads and offered an amazing opportunity to trial my business ideas.
I graduated in 2007 and continued to race at an elite level while working on these ideas. At this time, this was essentially to fund my triathlon athletic career. Although, with my new opportunity at the Innovation Centre, I wanted to start a business in an area I knew and understood. I knew it needed to grow slowly and steadily so that I would be able to reinvest any profits and keep a close eye on finances and cash flow.
TriBiz: So, you got underway in 2007. Talk us through the steps from there.
JL: Yes, I started working on the designs in 2007, the same year I graduated at Loughborough. After two years of research and development we launched in 2009 with a first production of 200 wetsuits and 200 tri suits. We just travelled the country with these letting the tri clubs demo the products, which gave us even more feedback to refine the products further. In 2010 we went into retail and with around 8 shops stocking our brand, three of these went into administration at the end of the season, which was a sharp learning curve!!
In 2010 Wiggle contacted us and asked if they could trial and they have experienced strong demand for the brand ever since.
TriBiz: As a young graduate, albeit with less to lose than someone in a comfy day job, what prompted you to make the leap and launch the Zone3 brand?
JL: The bottom line is that I saw a growing market in the UK, but no British brand riding this growth curve. For me as an athlete when racing at an elite level, I found the existing products on the market were poor fitting and were very expensive.
TriBiz: So, how exhaustive was your initial product development process?
JL: Prototypes were made, extensive research was carried out at Loughborough and I called upon fellow athletes for opinions and advice. I wanted to make sure that the products I was creating were what the athletes wanted and had confidence in wearing. I was prepared to modify and adapt and always tried to put my potential customers’ needs first. I didn’t want to introduce products to the marketplace until I felt sure the quality and performance were as good as they could be.
After countless hours of testing and development, sourcing new technologies and performance fabrics and finding quality manufacturers my first wetsuit design was ready. This coincided with my first season of elite racing and in 2008 at the Elite Super Sprint Championships in Strathclyde I wore the first Zone3 wetsuit in the race and led out the swim in the heat and in the final – it was an amazing feeling! The suit wasn’t perfect and needed some colour and panel design adjustments but it felt great and performed brilliantly!
So the brand continued to grow. We knew we were on the right track when in our first year the Vanquish wetsuit got a 9/10 review in 220 Triathlon magazine. Subsequently, in 2010 the Aspire wetsuit got a 10/10 review; the only wetsuit to ever receive full marks! Since then, we’ve continued to keep to the key principles that make Zone3 products so good, but each year have added new cutting-edge features and graphics to further improve the styles, whilst still keeping an affordable price tag.
TriBiz: The global financial crisis in 2007-08 must have been a wake-up call as you’d only just got started!
JL: Yes, starting a brand in a recession has had its limitations. We have had to be more cautious but in many ways this has been a good thing. We have grown organically rather than expand too rapidly. As mentioned, in the first year we launched the wetsuits and tri suits; we decided to travel the country attending open water venues and tri clubs and doing demo sessions. This way we got to know our customers and they were able to see the quality of our products. This resulted in a sell-out year, but more importantly we got lots of customer feedback that helped to finely tune the products further.
Although we have enjoyed back-to-back sell-out years, nothing has happened too quickly, which we believe to be the best way for success. However, since 2010 our cult following started to turn more mainstream and we have since formed partnerships with high profile retailers to start distributing the brand across the UK and Europe.
We could not be happier with how well the brand has progressed and now, similarly as when training to be a triathlete, we’re starting to get the results after years of hard work and attention to detail.
TriBiz: The steady as she goes approach has served you well thus far. Any plans to seek financing to ramp up your expansion plans even further?
JL: We have had a number of companies who have been interested in investing in Zone3 in the past but have decided to keep growing organically for as long as possible. Keeping focused on our own financial targets is enough for the time being.
However, there will be a tipping point, especially as we are expanding overseas so quickly. At the moment we have a huge amount of potential in the USA so are currently looking for investors to help us fulfil our ambitions.
TriBiz: The need to continually fund new product development presents a challenge?
JL: As an organic growth company, we generally work on a shoe-string marketing budget because so much of our time and money is spend on the product development.
Zone3 owes much of its success to an unwavering focus on extensive research and development. Our aim is to make the best fitting wetsuit. The process starts and ends by listening to elite swimmers who provide the qualitative input for our design team’s application of advanced sports technologies and on-going laboratory testing. Subsequent testing and feedback from ‘real’ athletes helps us to further refine our products.
We want to make every product be the best it can be at a given price point, so even our entry level products will give the swimmer a great experience in the hope that they will continue to trade up through the range and stay loyal to the brand.
Our strongest asset by a long way is our previous customers who help spread the word about the brand. Without these vocal athletes we’d be a long way behind where we are now. A lot of people say that they’ve never heard a bad word said about the products so this is something we’re very proud of.
TriBiz: Any new products in the pipeline?
JL: We’re excited about our new Goggles and Swim Skins we’re launching later this year. We’ve also almost finished the wetsuit and tri suit designs for 2014, which is always exciting for us.
All our products, both existing and new, are targeted specifically at the multisport athlete. So, our wetsuits have a spring loaded shoulder panel design and silicone coated Pro Speed Cuffs. And, knowing how important comfort is at each stage of a race, and in training, our tri garments really focus on comfort as well as performance.
TriBiz: How do you address the need for entry level products and the premium positioning also embraced by a cross section of the endurance sport community?
JL: We try to make the best possible entry level products available on the market and have received a number of awards for these efforts. We think if we can give our customer a great experience with their first ever wetsuit then they will enjoy the sport more and hopefully continue to buy up the Zone3 range as they progress. We have fantastic brand loyalty; and continue to build on this.
TriBiz: How do you divide your business activities between triathlon/multisport, the wider swim category and other endurance sports?
JL: We focus a lot of our business activities around open water swimming, whether this be for swimmers or triathletes. We want to help them have the most enjoyable experience possible if they are just swimming for fun; and we want to make them as fast as possible if they are training for a competition.
The open water swimmer is clearly looking for comfort, warmth and easy to use products that aren’t too gimmicky. Whilst the triathlete may embrace innovative features a little more readily, they are savvy and want a product that gets them through the water as quickly, efficiently and as possible – without any compromise on comfort or fit.
TriBiz: What route to market have you opted for? How tempted are you with a direct-to-consumer model or do you favour working closely with key, selected distributors and/or retailers?
JL: We much prefer working closely with retailers because it gives us the opportunity to support them in their efforts and grow together as a partnership rather than just a direct approach. Going direct to the consumer can work in some markets, but the retailer is so important in reaching out and connecting with the athlete directly.
We’ve seen that some brands have had success in a direct to consumer model, and this has driven down prices. But, while the consumer is very price conscious, they are also loyal to their preferred retailers and generally they like to buy where they have a wider choice of brands and price points.
TriBiz: Do you see any barriers to entry or challenges on the horizon in the multisport category?
JL: The multisport category has grown so rapidly over the last five years that new brands will find it hard to break into the market now. However, as the sport continues to grow this will continuously attract the attention of others sports businesses, which could have an impact on the economics of the industry.
However, as we know, the last five years hasn’t been an easy time to receive any assistance from the financial industry, which maybe has inhibited further growth. Retail is still very competitive at the moment but from a personal stand-point we have seen year on year growth from all of our retailers so we may not be the best judge on the industry as a whole.
TriBiz: How do you see the wetsuit category, specifically, evolving in the coming years?
JL: Prices are being driven lower; and potentially more new brands will be coming on to the market. The worry is that these will not have the quality of workmanship or materials as the current front runners. At this stage, we don’t see any of the worldwide big name sports brands coming into triathlon. This would undoubtedly shake things up a bit; but maybe that’s not a bad thing!
TriBiz: What are your key countries of focus in 2012 and beyond?
JL: We launched in the US in April this year, and are very excited about how this is going. We want to try and get a foothold in other key endurance sport markets such as Australia, New Zealand and South Africa. We’re also seeing Europe grow well at the moment.
We are always looking to add new retailers to our portfolio so would love to hear from any stores than would be interested.