Under Armour is putting connected fitness at the heart of its brand having acquired two apps it claims form the “world’s largest health and fitness community’, as it looks to rival Nike’s dominance of the digital arena.
The move marks the sports maker’s response to what it views as a paradigm shift in how people are interacting with brands. Creating services rather than traditional advertising is what it plans to appeal to shoppers, channeling much of its marketing outlay online.
Under Armour has shelled out $560m for two apps; MyFitnessPal, a free app for tracking food habits and calorie intake and Endomondo, a Danish pocket-sized personal trainer. Both will be added to a virtual pot, first established in 2011, that includes wearable fitness trackers and the MapMyFitness workout app. It also already runs a fitness network called Record, where people can store data from popular devices like the Fitbit and Jawbone.
The products will be positioned around a global online community that will use people’s health and fitness data to not only boost loyalty with targeted content but also drive e-commerce sales. It is this same type of long-term outlook that convinced Nike to pull out of the fitness hardware business last year in order to pursue ways of gathering valuable data on customers.
Speaking to analysts on a conference call yesterday evening (4 February), Kevin Plank, Under Armour chief executive said the business is establishing a “beachhead in digital”, growing its connectivity team to more than 500 by the end of 2015, up from less than 50 people a few years ago.
“There is a shift that’s happening in the way consumers are interacting with their favourite brands as a world goes digital, and we don’t see anyone appropriately addressing the needs of consumers,” Plank added.
“In 2009 there were roughly $1bn connected things on the planet. And estimates, depending on who you listen to, show that by 2020 that number will be somewhere between $25bn and $50bn. So whoever does the best job of sensitizing that data and making it easier for the consumer to understand are the ones that will win.”
The digital drive will also power the company’s charm offensive on women. Around 72 million women have registered on its platform, opening up a new revenue opportunities around personalised content.
Plank said: "Owning the world’s largest digital health and fitness platform provides an incredibly unique opportunity for Under Armour to build different type of relationships with our consumers long-term. Health and fitness is a part of your life from childhood onwards. And our goal in aggregating these three platforms is to make you better by making your health and fitness really easy to understand."
Under Armour hopes the investments will further accelerate its growth, having overtaken Adidas as the number two sportswear brand in the US last year. In the three months to December, sports apparel sales rose 30 per cent year-on-year to $708m. It marks 21 quarters of successive growth for the business at more than 20 per cent increases from its core apparel business.
Under Armour, which is considerably smaller in scale to Nike and Adidas, has benefited from aggressive marketing that has pushed the brand into popular sports such as the NFL in the US. A strategy, spanning football, rugby and its sponsorship of British tennis champion Andy Murray, is being carefully rolled out across Europe in order to wrestle share aware from its more seatblished rivals.