I was about to write an analysis of the Curry 3 and how little Under Armour has done to generate content for the footwear. As I started to do my research, I realized that it’s not a Curry and Under Armour issue, it’s a marketing issue and performance footwear is caught in the web of television, print and digital marketing missteps.
NPD’s Matt Powell stated this morning, “In the 17 years that I’ve been doing research, I’ve never seen a time when every single performance category was trending negative.” This was an eye opening moment for me. I was already considering doing a micro to macro comparison based on my online shop to discuss the poor sales of performance footwear and his statement sparked a completely different discussion. Matt recently did an analysis of the Outdoor Retail Market. You can download and look at that here. In that report Outdoor is trending in a similar fashion to performance. Throughout this report there are a number of reasons. One that was overlooked is the disconnect in modern marketing. It’s a problem I’ve been facing since I first made my first shoe and started selling kicks. While looking at the buying and spending habits of millennials accounts for a lot of the issues, analyzing spending without looking at how the shift in marketing has taken place creates half of the story (NPD has done research on this. I’m stating that sports brands aren’t paying enough attention to where the eyes and ears are moving). Let’s jump into this.
My Sales Reports Micro to macro – when I analyze my store I use it like a sample of the market. My online shop has always been primarily performance based. This means I lean heavy on signature shoes, but I also carry retro and casual styles. This analysis will look at the dates from Late November to December 31st. It’s not all of Q4, but these dates represent the time when sales should be increasing from Black Friday to post Xmas.
November 18 – December 31 2016
Note the bold print shows total sales and total shoes shipped during this period.
November 20 – December 31 2015
Comparing the 2016 to 2015 it becomes painfully apparent that performance has been performing horribly. Why was the drop off in performance so bad? I discussed the shift in trends here:
There is something that I haven’t really discussed in many of my analysis. I’ve brought up the failure of retail to create a connection to shoppers that connects online and through digital and carries over into brick and mortar, but I haven’t brought up the problem for all sportswear companies and that is the difficult navigation of the new marketing world. Performance, in particular basketball has had a difficult time generating the emotion that drives sales. This is primarily due to a reliance on print, new print (sneaker blogs), a failure to utilize social media and continued reliance on television and sports to drive the connection to the athlete. This disconnect, right behind the trend shift which is the number one reason for the slowdown in performance sales, is the main reason performance is lagging. If viewership is down in MLB, NFL, and sporting events in general, then sportswear companies can no longer rely on televised events to drive interest. Consider this:
1. Since Curry 3 dropped there has been one promo video done. That one promo video was featured on opening night of the NBA. People can’t fast forward through commercials, but if people were watching during opening night, when the commercials started, every person watching picked up either their notepad or phone and began using Facebook or Twitter to talk trash during the game. This means Under Armour paid for a television spot that was probably overlooked by 80% of the people watching the game. Under Armour also failed to pay for a sponsored ad with YouTube. How do I know this? I recently checked the numbers on the video and it had only been watched 5 million times vs 2 million for the Kyrie which was released in December vs October. Nike ran a sponsored YT video.
2. Since the Harden from adidas dropped there has been 1 video and 1 campaign placed behind the footwear utilizing YT. Harden has been used in multiple Twitter campaigns and FB promos, but YT hasn’t been consistently utilized to promote. adidas has been very good about updating information on their news site, but there is a clear disconnect in connecting the online market to the brand/Harden and it can be seen on the website specifically, but more important I go back to YT, 1 video and 1 campaign.
3. Since the KD 9 was first dropped there have been 6 different YouTube videos to analyze/promote the footwear. Nike has had more time to promote the KD 9, but with only 6 videos it would appear that the ball has been dropped… it hasn’t. The KD has actually been a solid shoe for me and it has been much better than the last two KDs. How is Nike avoiding the issues Curry and Harden are facing? Nike has benefitted from KDs move to Golden State, Under Armour has not. There really isn’t a reason for Nike to spend a lot on marketing KD because he is all over the place whenever Golden State performs well, whenever Golden State faces his former teammates in Harden and Westbrook. Whenever KD faces LeBron, you get the picture.
4. Since the Kyrie 3 dropped on Christmas Day Nike has run 4 distinct campaigns to promote the footwear. I wrote that Nike would start figuring out a way to move people back towards performance. The Kyrie 3 is the latest release of the performance basketball market. Since this shoe has dropped, it has had two colorways. The initial promo “Improv” featuring Questlove of The Roots was released on television and YouTube simultaneously. Nike also ran the ad as a sponsored video. The video in 3 weeks has been watched 2.3 million times. Nike didn’t rest there, the sponsored Jahmani Swanson a little person who plays streetball in a viral video and then for the second shoe for Kyrie 3 they dropped a pop-up shop.
Performance sportswear is struggling for the same reason that stores are closing down. The disconnect between digital and brick and mortar. In basketball and performance this is being corrected with the new stores being opened by the brands. The physical locations are no longer static. Websites are no longer static (some are and that’s why the brand is struggling… Under Armour). If the Kyrie is a representation of how brands will begin to handle the rollout of performance footwear and apparel, the performance footwear market may be headed in the right direction. Honestly, I’m not hanging my hat on performance getting it right. Not when adidas is doing excellent marketing for its retro and casual styles, but nothing is being done featuring Harden.