As an active individual, what would mean more to you: managing your personal lifestyle, connecting with your gym buddies, or aligning your shirt and shoes with your love of all things tech?
If you’re an active millennial, your answer might be all of the above, but how do you prioritise those aspirations in a way that fits in with who you are and how you interact with the world?
Adam Sussman thinks he has the answer. As Nike’s newly appointed Chief Digital Officer, he is spearheading the brand’s new digital strategy, which was announced in February of this year.
Nike raised some eyebrows by remaining outside of the hot, trendy wearables market and focusing on the “boring, old-school” metrics of ecommerce and global expansion. On the company’s Q2 earnings call in December, Nike reported launching ecommerce sites for Canada, Switzerland, and Norway, while broadening Nike.com coverage to include the sports-obsessive cultures of Mexico, Turkey, and Chile.
This strategy is in stark contrast to Under Armour, one of Nike’s chief competitors. UA has been aggressively pursuing social media workout junkies through its wearables strategy, including a series of acquisitions of digital apps, the release of wearable fitness gear, and a tech platform fueled by IBM’s Watson supercomputer.
This social fitness trend, referred to as “Athleisure”, looks at the way Millennials seem to flock to Facebook and Twitter to talk about their workouts and connect with like-minded athletes. This trend is accelerating growth within the industry, and continue[s] to shape the sports business, according to Matt Powell, an analyst at the research firm NPD Group.
Robin Thurston, Under Armour’s Chief Digital Officer recently told Investors Daily that some form of smart technology would eventually be in all of Under Armour’s products. This might mean biometrics feedback, durability sensors, or something that links seamlessly to a smart phone or app. At the core, Under Armour believes that sensors and data collection will be a central need of tomorrow’s athletes.
At first glance, Nike’s approach sounds remarkably conservative and short-sighted, while Under Armour seems to be preparing for a glorious digital future. But on closer examination, things are much more nuanced.
In a conversation with CNBC last May, Nike’s CEO Matt Parker discussed Nike’s digital strategy from a user-focused perspective.
“Digital, of course, also allows us to deepen the relationships we already have with consumers by tailoring every interaction to their specific needs,” he said.
He has also said:
“Through Nike+ we have created an ecosystem that gives athletes access to their fitness history, training programs, and their favorite gear every time they connect with Nike.”
Nike’s approach seems to involve developing a global ecosystem to reach its audience, convert them to customers, and align with their lifestyle in ways that create a personal affinity between audience and brand. This approach is sound on a number of levels.
First, it creates global presence in a way that generates revenue and is profitable. The R&D associated with new tech is significant, especially if you’re a clothing and lifestyle brand that lacks the tech infrastructure of Apple or Google. Positive cash flow and access to global sports enthusiasts seems like a good first step.
And while we’re mentioning Apple, don’t forget that Nike already has a deep partnership with Apple, and the two companies have confirmed that they are collaborating on a number of applications and digital solutions.
Parker told CNBC that we should “expect more from Apple and Nike- two great brands, lots of potential and opportunity”.
Under Armour’s approach of pursuing data and technology is a good idea, but it may not be the first priority. In our User Centered Design universe, the first thing we all need is to connect with our audience. “Outside-in” is always better than “tech-side, out to audience, then in”.
The likelihood of an audience adopting any brand or technology will depend on how well they feel understood by the brand; it’s the age-old issue of trust. I’ll be reluctant to share socially or harvest data from you if I do not feel an affinity with your brand.
This marketplace will undoubtedly mature over time, and there will be plenty of opportunities for all brands to advance or fall back in the pack. Early adoption is expensive for companies, and this balancing act is being played out before our eyes. Given that Nike has the Apple relationship, they can afford to focus less on tech and more on connecting with users, while Under Armour is apparently looking to bolster a talent gap by developing a tech proficiency.
At first glance, I give the early nod to Nike, as they are focusing on infrastructure, which is a key tenant of digital transformation, while simultaneously creating deeper, personalized relationships with their audience. It’s nothing new… start by connecting with the user, give them the tools that resonate, and they will naturally share them with their peers. It’s a model we all should follow.
By Daniel Giordan, Digital Practice Partner, Wipro Digital
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