This year, with the circumstances and precautions surrounding the coronavirus pandemic, has been challenging for most every business, especially retailers. Under Armour, the sportswear purveyor, is no exception. However, the company is seeking to use this unique time to reinvent itself and emerge bigger and stronger. The Baltimore-based company, founded in 1996 by Kevin Plank, has vowed to keep its 2,400 employees working.
What Under Armour is doing to reinvent itself during the pandemic
Under Armour started early in the pandemic to help mitigate the damage to their company from a dramatic drop in consumer spending and a slow-down in supply chains. Their “reinvention” plans touch on most areas of the company, including marketing and operations. Patrik Frisk, Under Armour’s current president and CEO, said of the “reinvention plans” in July that “current efforts to build the brand and streamline costs will better position the company to handle shifts in consumer behavior once global markets stabilize”.
1. Investing in e-commerce. One of the primary changes Under Armour is making to its marketing plan is to focus a larger portion of its efforts on e-commerce. To that end, the company is launching a re-designed website and is putting more effort into connecting with consumers and customers via social media. For example, Under Armour is seeking to build its brand awareness with a series of YouTube fitness videos. Says Christopher D. Burns, a marketing consultant and founder of ARCH-USA, a website dedicated to the sneaker industry. “It’s a great strategy. It’s not clear if it’s hitting the mark, but it’s a start.”
2. Enlisting athlete endorsers. Under Armour is also seeking the assistance of a cadre of athletes to help push the company’s products. Already signed up are the WNBA’s Bella Alarie, Kaila Charles and Tyasha Harris; NASCAR’s Hailie Deegan; heptathlon champion Georgia Ellenwood and world champion track and field sprinter Natasha Hastings. The company is emphasizing female athlete’s, a segment that Under Armour feels their competition has neglected. Other endorsers include the NBA’s Stephen Curry and retired wrestler Dwayne, “The Rock”, Johnson.
3. Pulling back on selling merchandise via discount outlets. Another thing that Under Armour is doing to revitalize its brand is to pull back on selling its products via off-price retailers like TJ Maxx and DSW and Marshall’s. Instead, they are going to concentrate on full-price retailers like Dick’s Sporting Goods and Foot Locker. They see this move as solidifying their brand as a quality product.
4. Reducing excess inventory. On of the situations that drove Under Armour to selling their products via off-price retailers was an excess of inventory in their warehouses. In addition, the pandemic has reduced demand for sports apparel, as consumers are avoiding unnecessary shopping and visiting gyms and fitness clubs. Fortunately, Under Armour acted quickly early in pandemic, and canceled 30 percent of their factory orders for the second half of 2020.
5. More closely defining the company brand. Rather than trying to be all things to all consumers, Under Armour is striving to more closely define their brand as a high-end sports apparel purveyor. Said Frisk, “We believe that consumers are gaining more consistent clarity about who we are and what we stand for: a human performance company with products designed to make you better.”
About Kevin Plank, founder of Under Armour
Kevin Plank led Under Armour from a startup in 1996 to a multi-billion-dollar company with offices in 21 countries. Plank led the company from 1996 until he stepped down as CEO in 2019. The company reported annual revenue in 2019 of $5.2 billion and employs more than 15,000 people around the globe. Quite a change from the small company Plank founded using his college savings, a credit card and a small business loan.
Plank lives in Lutherville, Maryland on 630-acre Sagamore Farm, an historic American thoroughbred horse breeding farm. Plank’s real estate firm, Plank Industries has participated in several revitalization initiatives in the greater Baltimore area, including revamping the taxi service at the Inner Harbor and renovating the circa 1914 Recreation Pier in Fells Point, Maryland.
Plank and his wife, Desiree are well known for their philanthropy. They have been particularly generous to young entrepreneurs and to Plank’s alma mater, the University of Maryland. Recently, he funded 40 summer jobs in the maritime industry. for Baltimore area students. Plank is a member of the Greater Baltimore Committee and the Greater Washington Partnership. He is also a member of the Board of Trustees for Living Classrooms, a non-profit organization that provides hands-on education for students using urban, natural and maritime environments as “living classrooms”.
This past year has been challenging for most all retailers. Under Armour is stepping up to face these challenges and not only survive, but thrive, by increasing their digital marketing presence, partnering with female athletes, reducing their inventory and looking to full-price outlets for their merchandise. It’s a strategy that’s likely to place them ahead of their competition when the world economy finally returns to a more normal landscape.