As a passionate runner, I had to check out the Under Armour (UA) activation at SXSW2018. But before jumping into that, allow me to take a step back to review UA and their approach to sponsorship.
What started as a small music festival in Austin, TX in 1987, is now a massive event, conference, festival, trade show and everything in between, with a declared attendance of 432,000 people for 2018.
A quick glance at the SXSW demographics published by the organization is enough to understand why brands would want the be there. Despite the sheer number of attendees, it’s the type of audience most sought after by marketers: educated, affluent and influential.
The activewear brand Under Armour is no exception, as their presence at SXSW was aimed at the running shoe segment, runners being an affluent, educated and healthy target according to the 2017 National Runner Survey by Running USA. Running is a big business, as its popularity has been steadily growing to reach 65 million runners in the US.
Under Armour Category Overview
Under Armour, as a sports brand, is now valued at $US4.4 billion. While a relatively new player in the sports shoe category, having only launched their first line of footwear in 2006 and then added their performance trackers to the line-up in 2008.
Footwear still represents only a small portion of the company’s sales (21%); the bulk of their revenue still comes from the apparel category. UA now has 2.5% of the footwear market in the US as of 2017, in 7th position; while Nike, the market leader, sits at 36.6% market share.
According to a global study conducted in 2017, running is a category for which the brand is of great importance to consumers: 50% of respondents stated that the brand was either very, or extremely important. UA is in a good position to gain market share in the running category as, for core runners (that is, active adult participants who tend to enter running events and train all year-round), it is second only to Nike as the favourite sports apparel category, at 41% compared to 50% for Nike.
UA’s strategy is focused mainly on athlete endorsement rather than the traditional jersey sponsorship of major teams. While the brand has some small sport properties across American football, baseball, basketball, soccer, golf and rugby, it mostly followed the endorsement route with a large roster of players in baseball, basketball, boxing, soccer, golf, as well as the odd hunting, paintball, skating and swimming athletes.
While their main competitors like Nike and Adidas tend to go beyond sports endorsement into lifestyle partnerships, UA is focused on its sports and performance positioning.
The strategy has often been centred on younger, promising players before they hit stardom, an underdog approach (as compared to a Nike which has tremendous resources), which fits perfectly with the image UA is looking to project to consumers. Like investors scrutinizing the stock market, UA has an internal team analyzing athletes’ performance, making calls about who is underrated yet poised to perform in the long run.
This being said, UA does not only invest in up-and-coming athletes. It also invests in famous sports icons from a wide range of sports such as Stephen Curry (basketball), Andy Murray (tennis), Tom Brady (football), Misty Copeland (dance), Michael Phelps (swimming) and Kathryn Budig (yoga) for example. This way, the brand gets the best of both worlds as this strategy allows it to reach various audiences from multiple sports at various levels.
HOVR SXSW Activation
The brand presence at SXSW was multifold. UA wanted to generate awareness for the connected app and new lineup of running products with HOVR technology designed to reduce shocks. The massive footprint at the center of Austin featured a giant red UA dome, with a pleasant red glow inside.
The flawless production focused on product showcase and trial, with energetic UA staff who collected your shoes so you could slip into a pair of HOVR while enjoying the visit. An interactive demo with a coach allowed you to connect the shoes to the MapMyRun app on the spot, and take it for a spin on the high-end treadmills.
It did take a few minutes to connect the beacon. As you can imagine, there were quite a few pair of shoes busy in the UA Dome. People could then continue their journey in the space to see popular running routes in Austin. The dome also featured a lineup of invite-only events such as runs, yoga and sports clinics.
The overall experience helped the brand to build affinity with customers and improve product consideration, especially for newcomers to either the brand or the shoe lineup.
UA HOVR Sonic Running Shoes
The UA Record Sensor inside the shoe does not need to be charged and should last for about 500 km (310 miles), which is the average lifetime of a running shoe. Being able to leave home without any connected device and then synch up to 6 hours of activity is a great feature.
The shoes are made from quality material and feel very light (I haven’t noticed any wear and tear after 2+ months of use as a training shoe). Does the HOVR technology work? It definitely feels softer. Too soft perhaps, especially for someone who would enjoy the feel of a more minimalistic shoe (I usually race with New Balance v1500). This being said, the soft feel for long training runs was indeed enjoyable*.
The Map My Run app (following the sport-tech startup MapMyFitness acquisition by UA), is pretty straightforward to use; you can synch it with your music and it gives you voice prompts as you run. Besides your speed, the app also tracks the length of your strides.
After non-stop growth since the company went public in 2005, UA announced a 5% decline in revenues for Q3 2017 and again in Q4, while competitors of the likes of Adidas and Lululemon, both pursuing a lifestyle and health-conscious positioning, are showing double-digit growth. While UA’s strategy did pay off in its first 20 years, it may not be surprising to see different market initiatives to get closer to the customer with experiential activations similar to the one we witnessed at SXSW, as a part of a sponsorships play outside of a pure sport environment.
*This is not a sponsored post, however the kind folks at UA did give me a pair of HVOR.
SXSW, Event Statistics, 2018.
SXSW, Demographics, 2018.
Nielsen Scarborough, Number of people who went jogging or running within the last 12 months in the United States from spring 2008 to spring 2017 (in millions), approx. 250,000*; 18 years and older
Forbes, Brand value of the sports company Under Armour from 2012 to 2017 (in billion U.S. dollars)*; 2012 to 2017
Runister; “How important for you is the brand of the running shoes?” June 20 to August 9, 2017; 451 respondents; 12-55 and older, Worldwide.
United States; “What is your favorite sports apparel brand?” Running USA; January - April 2016; 10,000+; 18 years and older; Core runners.
Statista, Running & Jogging - Statistics & Facts, 2018. https://www.statista.com/topics/1743/running-and-jogging/
Forbes, Most valuable sports business brands worldwide in 2017 (in billion U.S. dollars), 2017.
Statista, Share of the athletic footwear market by brand in the United States in 2017, https://www.statista.com/statistics/611891/united-states-athletic-footwear-brands-market-share/
2017 National Runner Survey, Running USA,