Sports apparel and equipment maker Under Armour Inc. has big plans for all that data the company is collecting from the 200 million registered consumers using its apps, websites and wearable devices.
Namely Under Armour wants to be the main brand and destination where consumers go online for fitness and nutrition information in the same way Facebook dominates mainstream social media and LinkedIn dominates business-to-business social networking, George Hanson, vice president, North America e-commerce and brand house stores, told attendees Thursday during his keynote address at the 2017 Internet Retailer Conference and Exhibition in Chicago.
With 200 million registered users, Under Armour already has a big and growing base in digital healthcare. “We have the largest health and nutrition community in the world,” Hanson told attendees.
It’s only a small part of the business, but digital healthcare was Under Armour’s fastest-growing sales channel last year. For the year ended Dec. 31, Under Armour posted sales of web-connected fitness products of $80.4 million, an increase of 50.6% from sales of $53.4 million in 2015.
In comparison, total sales for Under Armour increased year over year 21.5% to $4.64 billion from $3.82 billion, while apparel, its biggest category, increased revenue 15.0% to $3.22 billion in 2016 from $2.80 billion in 2015. Connected fitness accounted for 1.7% of sales in 2016 compared with 1.4% in 2015.
For the first quarter of 2017 ended March 31, revenue for Connected Fitness only grew 2.2% to $18.9 million from $18.5 million in the prior year while total revenue was flat at about $1.11 billion.
But UnderArmour is placing a big bet on the company’s future in digital healthcare by investing in web technology, data and products that “change the way athletes live and how we connect with them,” Hanson says. Under Armour also has a sizable investment in digital healthcare and wearables technology.
Under Armour has invested almost $500 million in launching new digitally connected apparel and shoes and in acquiring companies to collect more data. In January 2016, Under Armour rolled out UA Health Box, a suite of wearable devices that includes a wrist monitor that tracks data on sleep and daily physical activity, a heart rate monitor and a Wi-Fi-equipped scale to measure weight and body fat percentage.
The company also rolled out a new line of running shoes embedded with a tracking chip linked to a mobile app for continually monitoring the distance consumers travel on foot. In February, Under Amour spent $475 million to acquire MyFitnessPal.com, a developer of popular websites and fitness apps that track diet and exercise.
In February, in a splashy Super Bowl commercial featuring New England Patriots quarterback Tom Brady, Under Armour launched is Athlete Recovery Sleepwear and an updated UA Record app experience designed to improve sleep and overall athlete performance. Under Armour is using its new line of sleepwear products enhanced with biometric sensors and its updated performance app to build universal digital connectivity to athletes of all kinds, Hanson says. “We are going to connect all of the physical and digital end points,” he says.
Hanson outlined a five-step strategy for how Under Armour will build its direct-to-consumer retail and digital healthcare businesses.
For example Under Armour in February announced an expanded partnership with John Hopkins Medical in Baltimore to introduce evidence-based science and expert insights to the Under Armour’s suite of health and fitness apps: UA Record, MapMyFitness, MyFitnessPal and Endomondo. The collaboration aims to help users maintain and improve their health, wellness and recovery by tapping into the expertise of world-renowned specialists in medicine and patient care, Hanson says.
Under the arrangement Johns Hopkins clinicians will provide clinical and research-based guidance in four key pillars of health and wellness—sleep, fitness, activity, and nutrition—to inform Under Armour’s “connected fitness community,” the company says.
Under Armour also recently used existing digital product design and printing technology from the company’s business-to-business that helps sports teams design their own custom uniform to launch Icon, a new self-service shoe design tools.