Innovations from Nike and Adidas aren't pushing Under Armour to create a single customer view, but rather the threat of Apple and Samsung if they were to decide to move into sportswear.
It goes some way to explaining why a sportswear brand is delivering a keynote at CES in Las Vegas for the second consecutive year and offers a glimpse into how it might try to topple the dominance of Nike and Adidas. Rather than attempt to go against these sports icons head-to-head, Under Armour would steal a march on both in the worlds of healthcare tech and biometrics.
“We’re now moving beyond transactional data to truly be able to hit our consumers on global point of sale and we can reach them in mere minutes,” said Under Armour’s chief executive and founder Kevin Plank at CES. “2017 is the year that we embark on the true digitisation of our brand after 20 years of preparing ourselves as a business.”
Plank is referring to what he calls the “most robust database of any apparel footwear company today,” a product of its partnership with business technologists SAP. There will come a time when some form of smart technology is in all Under Armour’s products and so it is laying the pipework needed to get the crucial insights from all that data, whether that’s biometric feedback, durability sensors or something that links seamlessly to a smartphone app.
“When you hear about companies like Amazon attributing 40% of their sales to their ‘Recommendation Engine’ alone it’s not hard to understand the role that data can, and frankly is, playing in many companies,” Plank added. For all the technological revolution at his company, Plank is adamant that the need to “sell more shirts and shoes” is not clouded by all the data
“When you think about what Facebook has done for social, what Amazon Prime has done for purchasing, what LinkedIn has done for business, we expect to do the same with fitness and wellness,” he added. “Our team is dedicated to changing the expectation that you have from an athletic brand.”
To prove his claim is more than just superfluous rhetoric, Plank revealed the company’s plan to show how sleep can be a performance enhancer, a strategy that stems from the 257 million runs logged by its registered users last year. What might seem gimmicky with the launch of tech-infused pajamas that help people recover faster is rooted in Under Armour’s own data that shows people burn more calories on their runs when they have a greater amount of rest.
It’s the first in a line of products that will run under the slogan ‘Rest. Win. Repeat’ and will be backed by entrepreneur Arianna Huffington, who is also the author of ‘The Sleep Revolution; Transforming your life, one night at a time’. Two-time NFL MVP Tom Brady is also on board, having been a long-time champion of the performance benefits to be had from a good, old-fashioned night’s sleep.
Separately, Plank also showed off the company’s latest smart shoe, which will tell runners whether they are too tired to run, when they launch next month (1 February). Powered by the brand’s MapMyRun app, it builds on Under Armour’s first shoe – the SpeedForm Gemini 2 RE – from last year and offers detailed workout stats such as cadence and real-time pace information.
“By building our mobile offerings we’ve created a compelling way for consumers to tell us more about themselves and help us to make better-informed decisions on how we can serve them, whether that’s the food they're consuming, what their fitness goals are or what they’re doing," said Plank. “The neat thing about data is having lots of it means we can get to the best information to make those great decisions.”
It’s a pitch that has come in many guises at this year’s CES, attended arguably by more advertising executives than ever before to get their heads around using technology to convert an audience into a customer.
“The shift by consumer electronics companies from products to services will be a pivotal story at CES 2017,” said John Curran, managing director of communications, media and technology at Accenture.
This will be about connecting new types of artificial intelligence services on smartphones to new types of artificial intelligence services on fitness monitors, home thermostats and security surveillance cameras. It will be about consumer electronics companies connecting the dots between digital, operations, technology, and strategy to be relevant and differentiated in the new consumer electronics marketplace. The companies that will take the lead at the show will be those that demonstrate they are transforming comprehensively into digital businesses. Apple’s success in the service business is a great example. Its services business, which includes Apple Music, Apple Pay and App Store revenue, has been growing rapidly and is now its second largest overall – ahead of iPad, Mac and other hardware.
From the inception of Under Armour’s plan’s three years ago, when it acquired a spate of fitness apps, to now where it is launching services based on what data more than 194 registered users across those apps share with it, it has a clear understanding of how technology will transform the fitness experience. A fitness experience, whereby people can use apps to monitor their body in the same way they would their bank account or car or having a virtual fitness instructor.
The potential opportunities from this shift become clearer when Under Armour’s own fledgling Connected Fitness division is put under the microscope; more than 60% of those using its apps are women, who make up less than a third (30%) of its apparel sales, according to Inc. What’s more, only 11% of its sales are international, but more than three (35%) in ten of its registered users are outside the US.
Standing in Under Armour’s way are the likes of Apple and Fitbit, while it’s unlikely that Adidas and Nike aren’t concocting their own plans for connected fitness. However, Plank remains confident given the momentum behind a business that has reported 26 consecutive quarters with more than 20% revenue growth. Even more telling is the arrival of chief marketing officer Andy Donkin from Amazon last year, a statement of intent for what’s to come from a brand that is growing from a smaller base than its main rivals and it still has much to do outside of its homeland. Indeed, people will be reluctant to share their data with Under Armour if they do not feel an affinity with the brand.
“The challenge that I give our product teams each season isn’t what are we going to do with our current competition, it’s what are we going to do if Apple and Samsung decide they want to start making apparel or footwear and if they did then what would it look like and more importantly what would it do?” asked Plank.