Puma’s chief executive Bjørn Gulden admits the brand’s revival is still a “work in progress” despite its revamped brand strategy lifting sales in its latest quarter, underlining the importance of its renewed focus on women’s apparel to maintain the momentum.
The business has emerged from a tough 2014 with a clear positioning around speed and irreverence that helped stem its perennial sales woes in the performance category. Despite a slow start to the year, the strategy came good in the latter half thanks in part to its canny decision to target 'back to school' for the bulk of its football investment and avoid being outspent by the marketing might of Adidas and Nike around the World Cup.
It sparked Puma’s first footwear sales jump in seven quarters in the summer, laying the groundwork for a sales push over the festive period. Revenue in the three months to December rose 7.5 per cent to €750.8m (£555m) driven by the second consecutive quarterly increase for footwear alongside strong demand in the US and growing interest in its accessories.
Gulden said the performance was in-line with the brand’s expectations and proved it had finally carved out a place in the market with which it can stave challenges from the likes of Under Armour and New Balance for its crown as the third biggest sportswear brand. Puma has been struggling for more than ten years and has been trying to refocus around key strategic objectives since 2009, which has seen its share of the market steadily erode.
“We now have a clear positioning, which will be strengthened through increased investment into marketing and a clear use and celebration of our assets,” added Gulden. "The addition of Rihanna, as a brand ambassador and as one of our creative directors, is a commitment to our increased focus on the female consumer segment, as we truly believe that the ‘future is female’”.
Puma brought the RnB singer onboard at the turn of the year to kickstart its play for the multi-billion pound valued category. Nike brand chiefs have the said the company expects its women’s business to be worth $7bn (£4.55bn) by the end of 2017 and Puma believes females can become a larger part of its audience too. Rihanna will be tasked with defining a non-traditional concept for women's apparel that chimes with Puma's bid to strike a more disruptive chord in all its marketing, from product to advertising.
Disruption is the clear positioning Gulden has been trying to inject into the brand over the last 12 months, which has also influenced the types of athletes it promotes. The mercurial personas of athletes Usain Bolt and Mario Balotelli have all been brought to the fore for Puma’s 'Forever Faster' strategy and will likely play an even bigger role as its message spreads to new channels and takes new forms.
Gulden said: “We are further focusing on communicating stories clearly. We have made strides in improving our product and are working with our retailers to further improve the quality of our distribution.
Some of these retail efforts will take place online where the brand has admitted it lags behind its rivals. Shoppable social media ads and stronger strategies with stores such as JD Sports and Footlocker are planned in the coming months, allowing the business to create new instances where people can purchase the product directly from content. Puma has been testing the ads on YouTube and said a wider rollout was due once the business had resolved some practical issues.
The sportswear maker has ramped up its investment in the digital space over the last year in an attempt to tout itself to new fans aligned to its growing stable of athletes and Arsenal FC. Puma is just over mid-way through its first season as the kit supplier of the Premier League outfit and has been trying to win over the club’s vocal supporter base on social using new Twitter ad formats as well as tapping its YouTube channel.
“We know that the turnaround will take time but feel that 2014 was a turning point,” added Gulden. “We expect 2015 to confirm that we are moving in the right direction”.
Puma almost brok even in the fourth quarter and while 2015 looks promising it is aware that it needs to keep pushing. It appears to have got the basics right around marketing that ties back to the roots of the brand and will need to now ensure it has the products and innovations in place to realise its ambition to be the “fastest sports brand worldwide”.