Nike, Under Armour invest in watching exercisers' steps
WASHINGTON — Just days after Under Armour's sponsored star golfer Jordan Spieth won the Masters, the sportswear giant was hefting its weight into a very different sports arena: the Boston Marathon. As the company-endorsed elite runner Nicholas Arciniaga on Monday battled the 26-mile course, his pace updated directly to his Twitter and his profile on Under Armour Record, the company's new fitness-tracking app.
It was a subtler partnership than the 16 Under Armour logos covering Spieth during his televised Masters win. But it could prove far more important to the rising athletic titan's long-term strategy: tracking every step of America's casual exercisers and amateur athletes and, perhaps, persuading them just how much better the company's new clothes could help them perform.
Sportswear outfitters like Under Armour and Nike look increasingly like tech companies, with apps and digital ecosystems that stretch far beyond their traditional fitting rooms and football deals. In the age of the Fitbit and Apple Watch, where web-connected fitness is de rigueur, the winner of the health-tracking arms race could potentially secure a goldmine from shoppers looking for the best way to break a sweat.
Boasting “the world's largest digital health and fitness community,” Under Armour executives said Tuesday that their Connected Fitness platform now counts more than 130 million users. Most of those are from Under Armour's $700 million health-app buying spree, during which it gobbled up MapMyFitness in 2013 and, in February, MyFitnessPal and Endomondo.
It is another way America's second-biggest sportswear firm is seeking to get ahead of its chief rival, Nike, and another way in which the underdog is lagging behind. NikeFuel, the company's athletic melange of fitness trackers and mobile apps, boasts a big user base, a longer track record and the backing of the Big Swoosh, which sells far more clothes than Under Armour and remains more easily recognized.
It is a risky, costly maneuver for Under Armour, the $19 billion peewee to Nike's $86 billion varsity star. The amount the Baltimore company has spent on buying up the apps has carved into the firm's profits, hurting its expected revenue and leading its stock to drop about 5 percent in Tuesday trading.
The upshot for Nike and Under Armour: the easier they make it for sweaty shoppers to start tracking all their workouts, the more linked those brands will be in shoppers' heads when they go to buy new gear. Under Armour's online fitness community in January logged more than 100 million workouts, the company said: That's a lot of mid-exercise thinking about comfier shoes and sweat-wicking shirts.
Fitness connections can go much further than suggestion. Through a deal with online shoe store Zappos, Under Armour's MapMyFitness app uses an exerciser's workout history and sends alerts that her sneakers could soon need replacing, adding a Zappos link on where to buy. Under Armour chief executive Kevin Plank said the fitness trackers help connect “us to our consumer like no other brand on the planet.”
Fitness trackers could help companies win over a fast-growing yet underrepresented market among amateur exercisers: women. More than 60 percent of the 130 million users in Under Armour's online world are women, and the company's $600 million business in women's sportswear could prove to be, as Plank said, “as large, if not bigger, than our men's business.”
Health and wellness is one of the fastest-growing categories in app stores for Apple's iPhone and Google's Android, which now count more than 100,000 apps for counting calories, tracking diets or logging workouts.
And Under Armour is serious about staking a claim to digital health, opening a 35,000-square-foot office earlier this year in MapMyFitness's hometown of Austin. But the question of whether Americans will really want to buy into a new slate of fitness-tracking apps may be out of the company's control.
