Under Armour Looks for Growth in Athletic-Inspired Sportswear Trend

Under Armour Announces New UAS Line

Under Armour launches their newest initiative, UAS or Under Armour Sportswear September 15, at New York Fashion Week for immediate sale at Barney’s, Mr. Porter, their own brick and mortar stores and a dedicated UAS website. This upscale, fashion sportswear product is anything, but performance athletic apparel. The athletic-inspired clothing is targeting “ambitious Millennials” with “modern American sportswear, at home in a professional work place and not on the field.

UAS Under Armour Sportswear

Photo credit Under Armour

Why UAS Makes Sense for Under Armour

Some people may be scratching their heads over this move into sportswear, but it makes perfect sense for a several reasons.

In 1997, Under Armour was a pioneer that introduced expensive, fashion performance apparel to a market used to activewear as thoughtless, cheap basics from footwear companies. They were the first major aspirational athletic brand for men, as Lululemon was for women.

Under Armour created an athletic brand that sold strength, prowess and status in the mind of the wearer and by the way, sold comfortable, performance apparel. Fashion branding is about stirring emotion and they have been squarely in the fashion business, since the beginning. They upped the ante on the whole men’s athletic market.

Under Armour is an epic brand, at a time when it is getting harder to achieve mega-status in a niche-driven, individualist market. The appeal of their brand gives them license to branch out into other categories and price points, upscale, technically-inspired sportswear being one.

Consumers started wearing the higher quality, more stylish and comfortable clothing out of the gym. The use of performance fabrics and athletic details in everyday sportswear has been gaining steam for a while, as a natural extension of this trend.

The market is overflowing with spandex blended fabrics, polyester is no longer considered “low-rent”, performance properties abound and even merino wool has been “recast” as a technical fabric. Apparel startups Kit and Ace (former Lululemon founders) and Ministry (former MIT students) are two examples of this major trend. The new Van Heusen Flex Collection is selling comfort and technical properties to the men’s moderate wear-to-work market.

Sportswear is being inspired by athletic apparel and is experiencing a huge disruptive change to the look, feel and function of these categories.

UAS Under Armour Sportswear for men and women

Photo credit Under Armour

The Athletic Apparel Market Is Extremely Competitive

For more than a decade now athletic apparel has been the big growth story in a lack-luster apparel industry. Athletic startups and existing brand extensions have exploded. There is much less breathing room in the active market right now. Either you innovate, take risks, extend your brand in new categories or stagnate, shrink or die. Puma, Adidas and Nike are all responding to this market shift with collaborations and extensions.

This market explosion has blurred the lines of distribution away from sporting goods to all retail channels, not good news for apparel-dominated sporting goods stores.

Under Armour was born from apparel lineage, so it is an easier transition for them. Many strong athletic footwear or sporting goods brands have yet to even capitalize on the seismic shift that happened in active lifestyle apparel. They are missing a great opportunity and do this at their peril. UAS has now gone beyond athleisure to sportswear.

UAS won’t be Under Armour’s biggest initiative simply because of price points, certainly not the huge opportunity of their new moderate distribution to stores like Kohl’s; but it will allow them to capture the imaginations and wallets of new customers.

 

Some other posts you might enjoy:

Decoding Millennial Shopping Traits & Habits

Are Sporting Goods & Outdoor in a Death Spiral?

7 Common Fashion Brand Management Mistakes

The Dix & Pond Blog, by Stephanie Bernier is the blog of  Dix & Pond Consulting, a Boston-based, company that consults on business strategy, creative direction, brand experience, trends, product development and merchandising. Clients include retailers, apparel, footwear & consumer companies.  CONTACT US TODAY! 

Thank you for sharing with a friend, if you enjoyed the post! 

 

 

 

 

 

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Post Bankruptcies:What’s Next for Sporting Goods Makers?

Sporting Goods And Retail Space Are Shrinking

By now, most major sporting goods suppliers of apparel, footwear and equipment have taken a significant write-off from the Sports Authority bankruptcy and others, like Vestis Group’s Eastern Mountain Sports and Sports Chalet.

Sports Authority represented about 450 big doors for equipment, shoes and apparel. Under Armour has reported a $23 million dollar charge related to the bankruptcy, one of the largest reported losses. Some will be resurrected by buyers like Dick’s Sporting Goods, but most of these distribution points have gone away forever. This is natural pruning of a diseased tree.

The sporting goods channel is challenged by many factors. They have an over abundance of similar apparel, when the athletic apparel market has exploded in terms of styling, new brands and available outlets to buy. Women no longer need to shop in sporting goods stores for clothes. Young people have lower sports participation rates and more single-sport focus. Millennials are increasingly exercising in specialty fitness clubs like SoulCycle, Flywheel, Orange Theory, Pure Barre, Title Boxing and others, versus traditional sports participation.

Health and wellness are mega-trends, but we just don’t need as much square footage in traditional sporting goods doors. A lot of athletic apparel and footwear has migrated away to other retail doors and we are in a seriously over-stored environment for all types of consumer goods.

Sports & Athletic Manufacturers Must Get Creative

What does a traditional manufacturer of athletic apparel, footwear or equipment do when their available floor or virtual distribution space is shrinking? They have to get creative and take share from competitors. That means business focus, seeking alternative distribution points and sharpening their brand and product offerings. Here are six ways to improve athletic related sales in a diluted market:

Focus Your Strategy – Now more than ever companies cannot afford to dabble in duplicative or pet projects that drain precious resources. This means pruning and consolidating your company’s tree, to concentrate on fewer, but clearly promising categories or businesses.

Find New Distribution Channels – This means potentially selling into a channel, location, market or country that you have never considered before.

Under Armour just announced that they are going to sell the moderate channel starting with Kohl’s. This will help them reach more female, suburban customers. They have around 1100 locations, which could more than make up for the Sports Authority loss.

Sometimes creative distribution creates strange bedfellows, but everyone wins. A great example of this is Nordstrom selling J. Crew’s Madewell product, in their full-line stores. Nordstrom is supporting a retail competitor and J. Crew has become a wholesaler. They both have flipped the script and it is working out very well.

Brainstorm for new opportunities by imagining the mirror opposite of your current strategy and point-of-view. Consider complementary partner brands for co-promotion.

Grow Direct to Consumer –Wholesale brands can no longer count on their traditional retail customers for continued future growth. They need to have a strong direct-to-consumer strategy to sell to or introduce their brands to new consumers. This includes considering every possible format…brick and mortar, pop-ups, retail showrooms for e-commerce, e-commerce, brand ambassador selling, direct mail, shopping trucks, event and festival sales, VIP events, home shopping networks, parties, etc. What are the new ways to bring it to the customer, on their terms?

Think Product First – There is no fooling consumers, they know innovation and creativity when they see it. Marginal product always equals marginal results. Frequently companies pour millions into marketing, when their product doesn’t live up to the hype. Creating growth means product first, as they may never see your marketing messages in a splintered media.

Force Fresh Perspectives and Creative Risk Taking – Stella McCartney, Pharrell Williams and Kanye, put Adidas back on the map. Rihanna is growing Puma’s bottom line. These celebrity or designer collaborations can be game-changing and newsworthy (not always successful) to bring new converts into the brand.

The idea is forcing fresh perspectives and taking creative risks. For instance, this can be done by hiring fashion people to do shoes and shoe people to re-imagine apparel. How do you surprise and delight customers? If you are still working like it’s 2006, you’re probably not on an uphill track.

Great Brand Experience is Key – Clearly defined brands that offer a consistent experience to their customers, will fare best in a lukewarm market. Does you product have an identity that it can be identified without labels? Do your products, stores, website, packaging, marketing and service have a compelling and consistent promise for the target consumer?

When was the last time you went in a sporting goods or retail  store and felt excited to buy? Consumers increasingly want experiences from brick and mortar retail, so stores must innovate with decor, services, restaurants, bars, events, fitting clinics and loyalty programs to attract a consumer bombarded with choices. Own The Moment stores by Bauer is an exciting example of a completely reimagined sporting goods experience.

 

Some other posts you might enjoy:

Decoding Millennial Shopping Traits & Habits

Are Sporting Goods & Outdoor in a Death Spiral?

The New Definition of Athletic Apparel

The Dix & Pond Blog, by Stephanie Bernier is the blog of  Dix & Pond Consulting, a Boston-based, company that consults on business strategy, creative direction, brand experience, trends, product development and merchandising. Clients include retailers, apparel, footwear & consumer companies.  CONTACT US TODAY! 

Thank you for sharing with a friend, if you enjoyed the post! 

 

 

 

 

 

 

Will Haters Kill The #Curry2 Chef Sneaker?

Curry 2 Low Chef Sneaker Debut Lambasted

Under Armour debuted NBA, All-Star Steph Curry’s new Curry 2 Low “Chef” athletic sneaker, June 9 to an immediate explosion of haters on social media. They had a field day mocking the all-white, low-top sneaker on Twitter #Curry2 with snarky comparisons to “Dad shoes”, Seinfeld and elderly walkers. Although they were pretty creative and witty in their criticism, I couldn’t help cringe for the battered creative team at Under Armour and the innocently blindsided, two-time Golden State Warrior’s MVP, Stephen Curry. It hurts.

All white sneakers have been trending recently, but they are only “cool” in the context of being worn by cool people. When an urban, badass 18-year-old wears them, they are cutting edge. When clunky, all-white athletic sneakers are worn by anyone over 40, they conjure up images of low-brow, comfortable, nurse and mall-walker shoes. Fashion is always about context; for example, a Millennial can rock a bucket hat, on a man over 40, its touristy, geek-chic.

Curry 2 Low Chef

Curry 2 Low Chef

A Case Study of The Power of Social Media

As a design director, I can easily imagine the path followed to get to this design. White sneakers are trending and they probably thought it was a sure thing to preview this color. It comes in several other colors, that are considerably more radical, like black with team orange details, which was the most sold-down color on their website, as of this post. (White was available in all sizes.) Personally, I would have taken a more risky approach to the overall design and colorways for a such a mega-superstar shoe. Safe can backfire in a crowded market, but it’s easy to be a Monday morning quarterback.

I don’t believe in collective designing but with social media we live in times of instant approval or rejection of people, thoughts, services and products. For a high-profile intro with so much anticipation and hype, I think I would have focus-grouped the design concept mid-stream with sneakerheads, pre-release. This skewering of the #Curry2 can’t help the Under Armour bottom line.

Not sure if the haters will prevail to dent sales, but I think this will go down as a case study for academia on the power of social media and commerce.

Some other posts you might enjoy:

Tough Retail: 7 Ways to Grow Your Consumer Brand

Are Sporting Goods & Outdoor in a Death Spiral?

The New Definition of Athletic Apparel

The Dix & Pond Blog, by Stephanie Bernier is the blog of  Dix & Pond Consulting, a Boston-based, company that consults on business strategy, creative direction, brand experience, trends, product development and merchandising. Clients include retailers, apparel, footwear & consumer companies.  CONTACT US TODAY! 

Thank you for sharing with a friend, if you enjoyed the post! 

 

 

 

Are Sporting Goods & Outdoor in a Death Spiral?

Vestis Retail Group Files for Bankruptcy

Another one bites the dust. The Vestis Retail Group, owner of  Eastern Mountain Sports, Sport Chalet and Bob’s Stores of Meriden, CT is filing for bankruptcy. This follows the high-profile bankruptcy filing of Sports Authority of Englewood, CO and the recent closure of Boston-based City Sports stores. Prediction, the sporting goods graveyard will have more big-name corpses by year-end.

I also believe the outdoor, wood beam and hunter green team, Cabela’s, Bass Pro ShopsL.L. Bean and Dick’s Sporting Goods are seriously challenged these days. Because of the uniformity and proliferation of these outdoor/active mega stores, they are no longer the hot destination stores they once were. They’re surely feeling competitive headwinds from many directions. Dick’s will benefit from Sports Authority closures, but you can’t really say you’re a good student, just because the class average goes down.

In my view, the outdoor and sporting goods channels have reached saturation point and every niche has a ceiling. They will have to get smaller and find serious points of differentiation to thrive.

They also have an aging demographic and won’t have the same appeal to Millennials. 45% of this important demographic belong to a minority group (according to the US Census) unlike the Boomers and Generation X before them. The Millennial generation has more varied taste and less money to spend on apparel and accessories.

Apparel on clearance at EMS.

Apparel on clearance at EMS

What’s Happening in The Sporting Goods Channel?

Why is this happening in the sporting goods channel when sneakers are red-hot and athletic apparel has been biggest bright spot in apparel for almost a decade?

1. Amazon is an elephant in the room. According to a Slice Intelligence survey of 3.5 million consumers Amazon had a 43% share of all online sales last November and December. Their enormous selection, comparative deals, fast speed and free shipping are hard to compete with. According to Cowen & Co They are also on track to become the largest seller of apparel in the US, probably beating Macy’s by next year.

2. Sporting goods stores are no longer a key destination for women to buy athletic apparel. As the “athleisure trend” grew, so did the sources women and men have to buy these looks. Lululemon and Under Armour were the pioneers that challenged the category with fashion, quality and higher prices. Now the competition is fierce with traditional retailers increasing their assortments, specialty retailers like Athleta, brand-owned stores, online specialists and many wholesalers adding active to their assortments. Since women buy 80% of all consumer purchases, there is lot less traffic in sporting goods stores.

3. “Athletic inspired”, lifestyle apparel is far more important than performance apparel. The big expansion of active is wearing these clothes out of the gym. Many sporting goods stores and some apparel brands seem to think it is primarily about functionality and sweat reduction, not fashion and compelling design. Frequently, their lifestyle apparel offering is only the classic “outdoor” brands.

Many sporting goods stores devote enormous square footage to apparel and they generally don’t have the fashion chops to compete in a brutally competitive, rapidly changing apparel sector. Who needs another purple mock half-zip?

4. Sporting goods stores used to be the preferred place to buy sneakers. Performance sneakers,” sport-inspired” vulcanized cousins and fashion variations are the trending casual footwear today. Sporting goods retailers have not kept up with sneaker specialists and have treated the category as important as golf equipment. Women can buy “athletic-inspired” footwear from any of their favorite retailers from Forever 21 to Nordstrom today.

5. Youth participation is down trending for many sports. See this chart from Sports Business Journal in August 2015. There are many things going on here from the cost participation, fear of injuries, lack of interest, over specialization in one sport, etc. The drop in participation naturally creates less demand for equipment and related apparel:Youth sports participation rates.

What Should Brands do to Survive in This Climate?

What is an apparel, footwear brand or store to do in this highly competitive market? It demands creating real brand value, innovation, differentiation, targeting and understanding your competitive advantage in the market.

Competing just on price is a fool’s game. Fashion is emotionally driven by fantasy, hope or self-fulfillment, not just technical features or price. Wearable tech optimists, be warned.

Consumers want simple and exciting shopping experiences from brick and mortar or online stores. It’s time for the sporting goods and outdoor retailers to reimagine their stores for today, with nothing being off-the-table. Well conceived and executed brand experiences will turn this negative outlook positive.

 

You might enjoy these previous posts:

The New Definition of Athletic Apparel

Sports Authority Teeters on Bankruptcy- See The Reasons

Decoding  Millennial Shopping Traits & Habits

 

The Dix & Pond Blog is the blog of  Dix & Pond Consulting,  a Boston-based, company that consults on trends and creative direction, brand experience, business strategy, product development, merchandising and provides executive coaching for retail, apparel, footwear & consumer companies.  CONTACT US TODAY! 

Thank you for liking and sharing this, if you enjoyed the post! 

The New Definition of Athletic Apparel

Athletic Apparel Has Been Permanently Disrupted

Remember when athletic apparel was mostly made by footwear and sports equipment companies? It was budget-priced, logo-driven basic tees, sweats and shorts, sold primarily in sporting goods stores, for working out and active sports. It was the ugly step child to the primary businesses.

Market disruption started about 10 years ago when higher-value athletic apparel started to hit the market by fashion and price pioneers, Under Armour and Lululemon. They were innovators with more costly, functional fabrics, fashion-driven styling and unique branding; think of Under Armour’s powerful mannequins and Lululemon’s yoga cult brand experience.

Their flattering and comfortable styles, outperformed and outlasted their cheaper competitors. Customers found emotional value paying for creative, sexy and fashionable looks at a higher price and started wearing them in and out of the gym. They created “aspirational status” athletic brands.

The athleisure trend took off and has been the biggest trend in apparel for more than 5 years. Active and casual apparel blurred into a new category. The genie is out of the bottle and it is never going back.

Athleta pushes urban lifestyle products.
Athleta pushes urban lifestyle products.

Competition in Athletic Apparel Has Gotten Fierce

As athleisure has grown, the competition for market share has gotten fierce. Many non-athletic brands including Tory Burch (Torysport) and Free People (FP Movement) now offer their own active apparel. Footwear companies like Nike really upped their fashion game and companies are doing designer collaborations like Stella McCartney and Kayne West’s Yeezy for Adidas.

High-end, ecommerce specialists like Carbon 38, and Bandier (online and opening stores), have sprouted up, carrying ediger brands, like Michi and Heroine Sport. Designer ecommerce company Net-A-Porter started Net-A-Sporter.

Lululemon is seriously challenged lately by Gap’s Athleta. Athleta fully understands the blurring of the category with their combination of performance and sophisticated street wear looks (they used to only carry bright colors and the cliché “zen-like” NorCal prints). Lululemon has recently vowed to double-down on market-leading innovation and put a greater focus on performance athletes, in a recent article with Bloomberg.

Lululemon is pushing market-leading innovation.

Lululemon is pushing market-leading innovation.

Retailers like Target, Kohl’s and JC Penney greatly improved their active offerings. Macy’s, late to the athleisure party, now has a big selection in 700+ stores and online. Victoria’s Secret has an growing sports bra and athletic business. In fact, the sport bra  business has seriously dented fashion bras. Fast-fashion stores like Primark, have large active assortments at rock bottom prices.

Primark has rock-bottom prices, like $10 pants.

Primark has rock-bottom prices, like $10 pants.

Active Apparel Distribution Has Been Diluted

Distribution has been widely diluted across all retail channels. Sporting goods stores are no longer where most women buy their athletic apparel. Footwear and sports equipment companies have to sell direct to consumer and forge forward-thinking relationships beyond the sporting goods channel to regain market share.

It’s no wonder retailers like Sports Authority and defunct City Sports didn’t capitalize on this mega-trend. Sporting goods stores have to do more than display apparel in cavernous spaces and start competing head-on with real apparel merchants. They must be discerning, take brand risks and edit out the so-so.

Adidas at Urban Outfitters.

Adidas at Urban Outfitters.

2016’s Definition of Active Apparel

Athletic apparel is two-pronged. A smaller percentage is worn for true performance sports, but the lions’ share is used as casual, lifestyle clothing. Shorts designed for running, are a teenager’s summer staple. Sports bras are worn all day. Leggings and sweats are paired with Uggs for school. Hoodies are everywhere.

Design teams must understand the bulk of their products will never be worn for active sports. Personally, I own at least a dozen Lululemon tops and have never even tried yoga. Active designers simply can’t assign cursory importance to the “lifestyle” part of their business.

The definition of athletic apparel in 2016 is predominantly knit-driven, fitness inspired, comfortable casual apparel that is made of functional and innovative fabrics that can be worn for range of casual uses, including sports activities.

Fierce competition in the women’s and men’s apparel and accessories markets requires real innovation in styling and function. I’m not just talking “anti-stink” here, but unique and compelling designs as trend relevant as the underlying brand. The emotional connection to an active lifestyle is more important than the intended use of the clothes.

The world doesn’t need another ordinary half-zip. If the label was removed would anyone recognize your brand? What’s compelling about your products? The innovative brands will have pricing power, the copy-cats will experience significant mark downs and price deflation.

 

The Dix & Pond Blog is the blog of  Dix & Pond Consulting,  a Boston-based, company that consults on trend and creative direction, brand experience and business strategy, product development, merchandising and provides executive coaching for retail, apparel, footwear & consumer products companies.  CONTACT US TODAY!  or call 617.733.7411

Thank you for liking and sharing this, if you enjoyed the post!  Follow me to get the latest posts!

No Surprise, Sports Authority Teeters on Bankruptcy

Sports Authority misses interest payment

Update. Since this post was written, Sports Authority has since filed for bankruptcy protection…

Sports Authority, the Englewood, Colorado based sporting goods apparel and equipment mega-store has missed an interest payment on debt and bankruptcy is rumored. I can’t say this news surprises me.

What blows me away is that they are in the two hottest sectors of the apparel and footwear industries, athletic apparel and sneakers and couldn’t capitalize on it. We are in a multi-year athleisure trend, the wearing of sports apparel in and out of the gym, disrupting casual apparel and knocking even the venerable jeans business down a peg or two.

What’s wrong at Sports Authority?

Sports Authority is a big store with an enormous selection of sporting goods and apparel. The stores are dimly lit and cavernous, sort of like a warehouse club without the bright lighting, wide aisles and good deals. A visit to Sports Authority means walking long distances through a sea of me-too sweats and hoodies. There are no clear paths or sight lines. They are located in suburban settings, not particularly convenient for those key Millennial shoppers without easy transportation.

For a carrying products that consumers use in the happiest times of their lives, this store is seriously, no fun. They have tons of stuff, allowing little room for discovery. Great retail is emotional theater and Sports Authority falls flat. Bad music, poor lighting, safe selections, old technology and no creative displays. You are on a self-guided tour of a depressing warehouse. They try to be everything to everybody. They are water on the camp fire.

They could benefit from about 50% less SKUS and some focus on the hottest lines and equipment. Too much inventory and no foot traffic = missed loan payment. This store gives equal billing to down-trending golf product as red-hot sneaker lines. Their relatively small sneaker assortment in relation to their size, abdicates the business to mall competitors like Champs and Foot Locker.

The apparel assortment is the retail equivalent of safe-sex, run of the mill products from most of the usual suspects. Why not take a chance on some of the upstart creative athletic brands, mostly found online? Why not an area for discovery of new brands? How about some exclusives? Champion looks way better at Target. “Move on folks, nothing to see here.”

Where’s the creativity to drive traffic? How about fitness demonstrations, classes and athlete appearances? Healthy free snacks? Basketball half-court? Equipment testing areas? Contests? New lighting?  Hip music? You get the picture. Give up some SKUS to free up the dollars for the fun quotient. Tug at my emotions.

All retailers exist in a highly competitive environment today. Consumers are seeking the best experiences for their dollar. Whether it is a simple transaction on Amazon or a red-carpet experience at Neiman’s. They seek rewarding and entertaining retail experiences.

Bauer “Own The Moment” Experience Store

Sadly for Sports Authority, today was the day I decided to visit the new Own The Moment Hockey Experience Store by Bauer (Performance Sports Group, Exeter, NH), in Burlington, MA. My advice to any hockey store within a 100 mile radius, it’s time to retire. This store is state-of-the art retail theater at it’s finest. I see a lot of retail stores and this one takes my breath away. In fact, I just may learn to skate.

There is a huge selection of thoughtfully placed equipment and apparel in beautiful displays with spot halogen lighting. Halogen has a way of making things more precious. It’s like a futuristic hockey museum, with wide spacious aisles from front to back and in between. Everything is precisely displayed. You are intrigued to wander around corners, each area more enticing than the last.  In addition to a big open video viewing area, they even have an in-store ice rink for testing the latest equipment. They offer everything hockey for men, women and kids.

They truly capture the powerful athleticism of the sport. The testosterone soaked displays, images and edgy mannequins, got my heart racing. Who is that bearded guy anyway? Who knew hockey equipment could be so damn compelling?

A destination to visit, this store is an outstanding example of retail as entertainment.

The Dix & Pond Blog is the blog of  Dix & Pond Consulting,  a Boston-based, company that consults on trend and creative direction, brand experience and business strategy, product development, merchandising and provides executive coaching for retail, apparel, footwear & consumer products companies.  CONTACT US TODAY!  or call 617.733.7411

Thank you for liking and sharing this, if you enjoyed the post!  Follow me to get the latest posts!

 

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