Under Armour: From Apparel-Only To Health And Wellness

Joerg Koesters

It is no secret that technology is revolutionizing the consumer products industry. But some companies are embracing the change more the others. Under Armour has reimagined its entire business model to adapt to the Internet of Things (IoT). In doing this, it is shifting from a product-oriented company to an experience-oriented one.

The high-quality sports apparel company has morphed into a health and wellness company. Now hyper-connected customers can share health and fitness data with each other in real time. Your T shirt is able to communicate with your smartphone, relaying information such as heart rate and the number of calories burned during a workout.

However, this technology serves a much bigger purpose than just monitoring vitals during a trip to the gym. A recent article in Forbes points out that SAP is partnering with a British soccer team using Big Data. This partnership aims to prevent injuries on the field, track rehabilitation, watch training goals, and record factors from sleep patterns to food intolerance.

A new business model

Under Amour is working to make these technologies available to everyday consumers. Under Armour CEO Kevin Plank says new technologies are making it easier to hide smart devices—even in the unforgivingly tight compression T-shirts for which the company has become known.

“If we believe that our future is defined by these hard pieces of glass or plastic that sit in our back pockets, you’re crazy. It is going to convert into apparel,” Plank asserts.

Under Armour claims to have 150 million fitness enthusiasts currently sharing data. The bulk of those users come from its 2013 acquisitions of Denmark-based Endomondo and its free GPS-based tracking apps, and San Francisco-based MapMyFitness and MyFitnessPal. That puts Under Armour in the company of social media brands such as Facebook and Twitter. Plank estimates that as many as 50 billion retail items will become connected devices by 2020. Under Armour has the potential to capitalize on this market. That has driven Under Armour’s metamorphosis into an experience-based health and wellness firm.

The acquisitions of these fitness apps is just one example of forward-thinking brands taking the Internet of Things into their own hands. The company now has access to the world’s largest fitness network and the kind of data most brands can only aspire to. MyFitnessPal focuses on logging nutrition information while MapMyFitness focuses on fitness tracking and goals. MapMyFitness includes apps and websites such as MapMyRun, MapMyRide, and MapMyWalk.

Reimagined retail process

Under Armour’s acquisitions confirm the divide between physical product companies and digital experience companies.

Under Armour was founded in 1996, when Plank was just 23 years old. Tired of having to change out sweat-soaked shirts after a workout, Plank developed T-shirts made from the same material as his compression shorts, which managed to stay dry during a workout. The company experienced rapid growth, even appearing in Hollywood blockbusters such as Oliver Stone’s “Any Given Sunday” and “The Replacements.”

However, it was not until 2011 that Under Armour first dabbled in fitness tracking, with a new biometric device called Armour39. As that technology becomes cheaper to manufacture and more widely available to consumers, Under Armour’s fitness network will only continue to grow. This will create new revenue streams for the company.

Under Armour overtook Adidas last year to become the second largest player in the U.S. sportswear market. Moreover, it’s currently nipping at Nike’s heels.

Under Armour can now encourage customers to work out, by tracking and monitoring their exercise habits and sending gentle reminders when it is time to hit the gym. “The more someone exercises … the more apparel and footwear they are going to ultimately buy,” Plank notes. “This will help us sell more shirts and shoes and reach more athletes.”

Changing shopper engagement

Through smart technology and data collection, the company can better understand a particular customer’s habits—whether they are a runner, a weightlifter, a basketball player, or a cyclist—and alert runners, for example, when it’s time to replace their running shoes. It can also offer promotions tailored to a particular type of athlete. Knowing how, when, and why a consumer uses your products can create a marketing potential never before realized. That kind of power is sure to boost margins and increase efficiency.

The era of simply selling high-quality shirts and shoes is gone. Under Armour now connects a community of 150 million fitness enthusiasts who can reliably share information in real time. This data-sharing happens at will. By reimagining its business model, retail process, and shopper engagement, Under Armour has solidified itself as a power player. It is turning the modern consumer products industry on its head.

The sportswear giant is redefining its industry with personalized shopping experiences. It does this by connecting with its customers on a new level. This creates alternate revenue streams and builds loyalty through new, unique digital marketing channels. Under Armour has revolutionized how it engages with consumers and provided a niche community of like-minded enthusiasts. This unique use of technology will solidify its survival in a digital world.

Learn more about Digital Transformation for Retail at Retail. Reimagined for the new economy.

About Joerg Koesters

Joerg Koesters is the Head of Retail Marketing and Communication at SAP. He is a Technology Marketing executive with 20 years of experience in Marketing, Sales and Consulting, Joerg has deep knowledge in retail and consumer products having worked both in the industry and in the technology sector.