Like the Yankees vs the Mets, Arsenal vs Tottenham, or Michigan vs Ohio State, Nike and Under Armour are some of the biggest rivals in sports.
But the ways in which they compete — and will ultimately win or lose — are changing.
Nike and Under Armour are both companies selling physical sports apparel and accessories products, yet both are investing heavily in apps, wearables, and big data. Both are looking to go beyond physical products and create lifestyle brands athletes don’t want to run without.
Nike is the world leader in multiple athletic shoe categories and holds an overall leadership position in the global sports apparel market. It also boasts a strong commitment to technology, in design, manufacturing, marketing, and retailing.
It has 13 different lines, in more than 180 countries, but how it segments and serves those markets is its real differentiator. Nike calls it “category offense,” and divides the world into sporting endeavors rather than just geography. The theory is that people who play golf, for example, have more in common than people who simply happen to live near one another.
And that philosophy has worked, with sales reportedly rising more than 70% since the company shifted to this strategy in 2008. This retail and marketing strategy is largely driven by big data.
Another place the company has invested big in data is with wearables and technology. Although it discontinued its own FuelBand fitness wearable in 2014, Nike continues to integrate with many other brands of wearables including Apple which has recently announced the Apple Watch Nike+.How Nike And Under Armour Became Big Data Businesses
But the company clearly has big plans for its big data as well. In a 2015 call with investors about Nike’s partnership with the NBA, Nike CEO Mark Parker said, “I’ve talked with commissioner Adam Silver about our role enriching the fan experience. What can we do to digitally connect the fan to the action they see on the court? How can we learn more about the athlete, real-time?”
Upstart Under Armour is betting heavily that big data will help it overtake Nike. The company has recently invested $710 million in acquiring three fitness app companies, including MyFitnessPal, and their combined community of more than 120 million athletes — and their data.
While it’s clear that both Under Armour and Nike see themselves as lifestyle brands more than simply apparel brands, the question is how this shift will play out.
Under Armour CEO Kevin Plank has explained that, along with a partnership with a wearables company, these acquisitions will drive a strategy that puts Under Armour directly in the path of where big data is headed: wearable tech that goes way beyond watches
In the not-too-distant future, wearables won’t just refer to bracelets or sensors you clip on your shoes, but rather apparel with sensors built in that can report more data more accurately about your movements, your performance, your route and location, and more.
“At the end of the day we kept coming back to the same thing. This will help drive our core business,” Plank said in a call with investors. “Brands that do not evolve and offer the consumer something more than a product will be hard-pressed to compete in 2015 and beyond.”
The company plans to provide a full suite of activity and nutritional tracking and expertise in order to help athletes improve, with the assumption that athletes who are improving buy more gear.
If it has any chance of unseating Nike, Under Armour has to innovate, and that seems to be exactly where this company is planning to go. But it will have to connect its data to its innovations lab and ultimately to the products it sells for this investment to pay off.
Source: forbes.com, November 15, 2016