Items I’m looking for are basic, how will UA overcome its lack of heritage to advance. Will the brand address diversity issues? Will Plank make a decision to step down or move on. (My notes will be in parenthesis)
Kevin Plank takes the stage with his welcome.
Consistent Adaptation
Entrepreneurial Growth Company
At the end of 2018 we are two years into a three year transformation. Presented in three year intervals:
In The Rearview 2013-2016
Here . Now . Today 2017-2019
Moving Forward 2020-2023
First three years we expanded in North America first to drive scale. In 2010 the biz grew to 1 billion. Footwear tripled to 1 Billion. DTC grew to 1.5 Billion and by the end of 2016 we were able to “Get Big Fast”.
We grew so fast we failed to keep the business simple.
2016 was the year to address the rapid expansion (bankruptcy, promotional activity) UA should have been better at segmentation and pricing. UA had to evolve (But have they?)
(At this point in Plank’s opening speech if you’re familiar with what has happened with the brand you feel that this is redundant and all has been discussed on every conference call since 2015. I can’t help but compare this to Nike’s Scale of Sport ID in 2017. Within the first 20 minutes with Nike we were introduced to 5 different segments and technical discoveries that the brand would build their future on. This was during the intro. We were told that Kobe would announce 360 Flyknit and given pictures of 720 and 270. Plank at this point shows a picture of him and Patrick Frisk wearing unplanned matching clothes?)
UA is touting its digital ecosystem with Connected Fitness. Paul Fips will handle the Digital discussion and how it will drive growth.
Visitors were given HOVR Infinite with Connected Fitness
The Focused Performer (I actually like this. UA does not have heritage at its foundation. They are creating the foundation and if they look at their potential customer as a focused performer they are realizing their only strength is in sport solely. It appears that UA will focus primarily on finance which isn’t very exciting. If the day moves along in this manner I don’t see this ID inspiring interest.)
Plank admits that they have yet to build their defining product. (He doesn’t realize how true this is. It’s not saying that we aren’t perfect but we’re working; it’s saying we don’t have an Air Force 1 or Stan Smith in my head.)
Patrick Frisk takes the stage
Is discussing Protect the House phase in the Here Now Today.
(The brand is adhering to the slides and they are telling the same stories. There is danger here. I understand the idea of looking back to understand what has occurred, but an Investor’s Day has to inspire excitement and this far both Frisk and Plank are simply restating similar discussion points from conference calls. It’s a bit frustrating.)
Go To Market is all about targeting the consumer. They talked with over 22,000 consumers to develop the concept of the Focused Performer. Emotional and Functional drivers (This is an important discussion point, but I get that this is a more rigid presentation, but I really want product excitement. Right now Frisk is actually discussing Recovery.)
Consumer Decision Journey (Slide 22) Frisk just discussed Instagram as being critical and then moved to Alibaba and Amazon as being equally important. Where and how the customer finds UA happens outside of their ecosystem. (He just said Men and Women shop similarly!!!!!! Nooooo they don’t, not at all.)
This chart from Frisk shows the opportunity available to UA as being around 92 Billion. (When Nike discusses 50Billion it’s realistic. If UA discussed that they wanted to be at 7Billion I would trust it a lot more.)
Limiting SKUs expands creativity. (Interesting)
Consumer Centric Storytelling will tie the app world with the brand. (They keep saying, “to sell more shirts and shoes.” I can’t help but cringe when Frisk and Plank say this. Nike came out in the first moments and gave a name to their system – Consumer Direct Offense. I’m not sure about what the primary concept is. Frisk is delivering an introducion to every aspect, regions, divisions, but the excitement isn’t there.)
Moving Forward UA will be balanced. The brand will think through go to market to be structurally sound when working in a more predictive manner.
Paul Fipps Chief Digital Officer takes the stage
Using digital to drive engagement to get better. Performance
The brand is really touting their digital assets. App users buy 36% more online and the digital community has grown 65%. (This sounds familiar) Premium subscription has grown and this will create opportunity for tailoring experiences in training. Data will drive the future. (Unfortunately data is great for understanding what the consumer is buying, but what and where will UA find the heart?)
(I really liked the MyFitnessPal video of the guy who lost 70lbs. They can definitely build on that.)
Under Armour app 20% higher order value
(The Digital Ecosystem is their CDO)
The Connected Shoe is considered a wearable. (Map My Run feeds into UA App for footwear and apparel. I’ve had a misunderstanding of where UA has been headed. That isn’t my fault considering how closely I follow the company. Then again I don’t interact with the brand via apps. This is my fault and creates a broken narrative when looking at the brand. However, if the apps are the primary engagement … ahh look below.)
UA.com is going through a redesign. The Interface is going to be much better. (I noticed this through the News/Blog platform. I like this.)
Jim Attica SVP Consumer Engagement and Attica Jakes VP Global Brand Management
Discussed the past with Tentpole Campaigns. Attica states that they underutilized their own platforms. (Yep) Jim has moved into the data discussion immediately.
Attica takes a deeper dive into the Focused Perfomer and will discuss their access to this consumer and how they represent a 92Billion dollar opportunity. Inclusive Sizing will be a focus in 2019.
Jim looks at Consumer Engagement. This is the scroll and swipe generation. Brands are competing with publishers, brands and friends. Consumers dictate the terms of their interactions. The challenge is generating engagement. UA has to consistently create interactions. Speed + Learning + Growth
CDP Customer Data Platform
RMI Return on Marketing Investment
DMA Digital Marketing Accelarator
The customer journey is like a bumblebee. (Yes!!!!) The brand will stop repurposing content and build the content for each individual platform. Connected Fitness. (Now that the division has been broken down they are better able to utilize the date from that area.) 130 Million organic views on UA video content. (UA has shifted towards becoming a media company and they understand the importance of it.)
15 Minute Break
Clay Dean Chief Innovation Officer takes the stage
In the Rearview discusses how UA failed by focusing on the ingrediant side and they failed to push forward the story of what the technical team did. (I understand the beginning, middle and end, strategy but in doing so I have yet to really be inspired and excited. I’m looking for product, not the focus on the customer and how you have decided to reach them.)
Innovation for UA is
Revolutionary = Disruptive
Evolutionary = Build Upon Existing Ideas
Orthogonal = Evolve via Innovation
Dow Chemical is the company behind HOVR Foam. The company will continue to look in different places for ideas to evolve.
(Once again the delivery of this information is an expansion of a conference call. Where is the product. Three hours into the presentation during Nike’s ID2017 they had given everyone in the room a look at the future via Air Max 270. There were actually pictures. What Clay is doing is building towards something, but without an actual image of product I really don’t care that you think you know how you’re going to get there because this market is fluid and shifts quickly. Delivery doesn’t matter if the product isn’t strong.)
Clay reiterates that they have yet to make their defining product. (They shouldn’t keep this as a part of the rhetoric.)
Colin Brown Chief Supply Chain Officer takes the stage
46% of sourcing was from China. (The brand is reducing reliance on China as the economy is not predictable with tariffs by Trump’s administration.) The entire supply chain was 2500 people and it required too much effort to keep up with the growth. (Now I want to hear where they are going to create their supply… They introduced a new chart at slide 108
(http://investor.underarmour.com/static-files/dfc6720a-9980-4fd4-8d92-c1deb4242f96)
Distribution Optimization (When adidas discusses this they use Speedfactory and Carbon 4D. Nike uses Express Lane and UA has not mentioned the name of their speed to market process and system.)
Although the brand is reducing reliance on China, they are still going to produce footwear there of course. Sourcing is key to the brands margins increasing. Throughout the process they have utilized “Trust the Process”, but no one has alluded to Joel Embiid. There really hasn’t been any dialogue on the athletes at all, only pictures being cycled through on video.
Colin said they are building the Avengers… At this point that’s kind of a bad thing to do considering they were wiped out with a snap, lol.
Jason Larose President North America takes the stage (5 years with UA)
North America is a 95 Billion dollar market. 180 stores in North American Canada and US. 13,500 points of distribution. UA is underdistributed. Finally kind of a goal. 29Billion potential focused consumers.
UA has their first generation who have never lived without UA. (This is where UA has to shine. But they will have to wait ten years for those kids to find UA cool enough to wear.
UA Global Discussion from Managing Directors from Regions. (I took a break to process orders) but the presentation hasn’t deviated from the slides.
Kevin Eskridge Chief Product Officer (10 years with the company 1 year in this position)
Last Iinvestor’s Day was 3 years ago.
4 Categories Train, Run, Authenticate, Connect
Category immersion happens at 12:45
Afternoon Session begins with detailed discussion on how 2018 has turned. David Bergman delivers the information. The information has been captured in a detailed breakdown on the site at this location:
My notes and thoughts
I understand that ID2018 was about removing the fears of investors who worried that the brand is faltering. However, when you have a chance to inspire you have to inspire. This Investor’s Day gave very little excitement for those viewing online. There weren’t any athletes invovled. There wasn’t any storytelling and the brand failed to introduce all of the new signees. They didn’t show online viewers any footwear. The Curry 6 debut was yesterday. It wasn’t discussed at all today. The M-Tag is leading the way with a focus on the basketball roster and they didn’t discuss that. While there were pictures of The Rock, they didn’t double down and discuss how this could move the brand towards lifestyle. In regard to women they did discuss plus size as an addition, but they didn’t deliver any of the narrative around women’s stories.
They did discuss the importance of DTC and digital, but these are all items that could have been summarized at a conference call at the year’s end. With Nike’s ID2017 as the bar Under Armour failed to even reach 10% of the excitement. The company talked about footwear becoming 25% of the business which is going to take considerable work. Now, I wasn’t able to see the breakouts, but during the morning session they didn’t tell us or show us anything and I think that’s a mistake. What do I ultimately see for UA? I think they are doing a lot of things right in regard to the data and growing based on information, but the fact that they aren’t in many doors this will hurt them. They are still doing a lot of things wrong in marketing, but they are getting better. The customer still buys after touching and right now it’s difficult to touch UA product because it isn’t in the stores.
I think the distribution chain for UA undercuts their hope for better pricing strategy. UA is a Kohls and Ross’ product. It’s a discount brand and they haven’t really presented any reason to make me think they will find the solution to the promotional issues for the company.
