Puma to ramp up global media spend as it commits to US growth with Fifth Avenue flagship
The opening of Puma’s immersive Manhattan flagship marks a confident “return” to the US market for the sports brand. But it doesn’t mean its budgets will necessarily shift to live retail or experiential – its chief marketer now plans to pour more cash into traditional media and broadcast.
Puma's New York flagship opened doors on Wednesday (28 August)
The Fifth Avenue store, which opened on Wednesday (28 August), has been two years in development. Apparel from across the brand’s streetwear, performance sports, exclusive fashion and kids collections is displayed at low density across the two floors.
But while the outlet will be judged primarily on its ability to shift stock, it has also been designed with brand immersion in mind.
Customers are invited to grab a coffee from the upstairs barista station, try their hand at soccer drills in an immersive digital training experience and spend time with the rotating schedule of artists and cult brands that have been invited to host events and customization experiences in the space.
Marketing and product development teams are also eyeing the store's capability as a real-life research center – a place to host roundtables and conduct on-the-floor research with core and peripheral customers in their natural retail environment.
“We've been focused on engaging consumers with our social platforms... in the last 10 years,” said Adam Petrick, Puma’s global director of brand and marketing. “But being able to have retail stores where you can engage one-to-one with consumers in a shopping environment – watch them shop your product and see what they like don't like – is invaluable."
Petrick, a Puma marketing loyalist, described the flagship as a symbol of Puma's focus on and – "return to" – the US market.
"Our presence with wholesalers is increasing and getting better, and this serves not only as a platform for getting product across, but also as a visualization or embodiment of our presence in this market, and New York in particular," he said.
Puma has recorded promising growth in recent quarters. Full-year sales increased by 17.6% at year-end February 2019, aided by double-digit growth in EMEA, APAC and the Americas. The latter’s revenue was up 16.9% – a success partially accredited to its reentry into the basketball space.
Yet the brand is still dwarfed by the dominance of Nike, and continually competes for what is left of US market share with the likes of Adidas and Under Armour.
So now, after some years spent building out its grassroots authenticity on the street scene with a number of shrewd celebrity partnerships (Rihanna’s being the most notable), Petrick is preparing to amplify this "credibility" with an increase in media spend.
“We've been creating good products and [inking] great partnerships with great ambassadors around the world,” he said. “What we need to do now is create awareness for our brand.
“Retail stores will be a piece of that, and they're be a component in getting the word out on a city by city basis. But if I look at our overall mix, the place where we're probably going to grow the fastest is probably traditional media. As we grow, and as we need to reach a broader market segment, we've got to spend a little more on awareness and eyeball capture.”
He added: “What I'm surprised by is that very few people know what Puma's doing. Awareness is high, but actual understanding of all the things we're doing on a daily basis isn't as high as I'd like it to be.”
This is exactly why Puma handed its $300m global media account to Havas at the end of 2018. The French holding company has been tasked with investing in the “infrastructure, procedures and policies” of the brand's paid media practice in order for it to increase imarketplace awareness, particularly outside of urban areas.
The deal will also see Puma tap into Havas’ relationships with Vivendi-owned sister companies as it aims to tap into the “culture of sport”. Access to talent through partners such as Universal Music will still be critical to the brand’s focus going forward, regardless of how much it spends on media.
“If we were to say, ‘OK, that phase [of connecting with culture] is done, now we're just going to commercialize’ it would be disaster,” said Petrick. “We would never do that.
“Instead, we’ll be taking the truth of what we've built over the last 10 years and just getting that in front of more people.”