Under Armour boss Kevin Plank, 43, could effortlessly rattle off the average weight (192 pounds), night’s sleep (six hours, 38 minutes) and run distance (4.2 miles) of men his age — and not just for personal reasons.
That’s because in the past three years the athletic giant’s founder and CEO has spent $710 million on bolstering its digital health and fitness community, Connected Fitness, by acquiring the apps MapMyFitness, MyFitnessPal and Endomondo. The goal? To make more-informed decisions on behalf of its consumers.
Plank is confident data collection gives Under Armour an advantage in the robust athletic market. Industry experts agree.
“The more [the industry] knows about athletes today, the better positioned we are to leverage that knowledge,” said Matt Powell, sports industry analyst with The NPD Group. “[Plank’s] going to have much deeper and richer knowledge than we currently have about how athletes use their products and how athletes work out.”
But Plank, who founded the firm 20 years ago, knows data alone won’t be enough to defeat the competition. To strengthen the company, he’s investing in a new Baltimore campus — featuring a 100,000-plus-sq.-ft. retail space off I-95 — and focusing on its international growth.
The executive spoke with Footwear News about the motivational quotes on his infamous whiteboard, the relentless plan to improve the health of Under Armour’s consumers and why industry innovation is “laughable” so far.
What have you learned over this 20-year journey?
KP: How much you don’t know, how many things surprise you. The thing about sports and life is everything could seem like it’s going perfectly and then all of a sudden you get surprised. One of my favorite quotes is from the great philosopher Mike Tyson: “Everybody’s got a plan until they get punched in the face.” We talk about the map, the terrain, and we have the best plan in the world, but we’ve demonstrated over the past 20 years our ability to move and act and react with what the market gives us.
What’s written on your whiteboard today?
KP: The most recent thing I put on my whiteboard simply said, “I don’t have to be right, I just want to win.” That’s important for business. There are people that spend more time, energy and effort trying to prove themselves right versus if it works, take it — and move on to the next one.
Why is Under Armour obsessed with data?
KP: The most important asset anyone has is health, but why is it that we know the least about it? When I ask how many days were you sick last year, why don’t you know? You could have $400 in a checking account and the bank would send reams of data. But if I ask, “How’s your health?” You’ll say, “I don’t know. I feel pretty good; I was at the doctor 18 months ago.” You have nothing monitoring [health]; we run through life and expect to remain healthy, but things happen and the ability for us to use predictive analytics and data can help us. Over 2 billion workouts and over 389 million runs were logged into our database last year. We’re finding the smartest people that could help us inform our consumer to make better decisions, to live healthier lives.
How will having this data be used to generate new products and increase sales?
KP: Our consumer wants us to have more information about them, and we need to give them some- thing back. When they give us data and tell us this about themselves, how are we using that to inform, to make their lives easier and better? If you went on seven hikes last month, wouldn’t you like for us to know that? We should be solving the problem of the shoe you’re wearing and saying, “We saw the distance, the altitude, the wind and the weather where you were hiking; we could make a recommendation for a better shoe.” Under Armour established itself as a shirts-and-shoes business that built credibility and trust with the consumer. We find the best assets that will help make an athlete better, whether its partnerships with Harmon Kardon to help make our headphones or HTC with our Connected Fitness.
Would you say Under Armour is the smartest athletic brand tech-wise?
KP: We’re positioned to be a brand unlike anything that’s been defined. When our industry talks about innovation, it’s a joke, it’s laughable. My competitors talk about how innovative they are with a new knit upper. A new knit upper is your definition of innovation? A shoe that doesn’t tie? That’s innovation? Great, another thing my kids aren’t going to have to learn. Go back to 1985 and wonder what expectations consumers would have today. Twenty years ago, the innovation that lives inside a simple phone today would have taken a Greyhound Bus [size] supercomputer and it wouldn’t have taken a picture or played music, yet today this fits in my back pocket. That’s innovation.
How important is your international growth?
KP: It’s critical. It’s been a long slog for us; we’re on year 10 in Europe, and it took us that long to get to profitability. Latin America is very important to us; Central America and Brazil are very important. Japan has always been the stalwart of our leading markets internationally, but China is fast on the way to becoming larger than Japan and be our largest market outside the U.S. Under Armour in Asia — particularly in China — is known as the professional brand. If sport is your life — or when you practice, if you want to be like the professionals — this is the brand you wear. That is a foundation that’s going to allow us to expand, and there are many other terrific lifestyle moments and opportunities to continue to grow.
The hardest thing is finding and reallocating people. We want to breed our own team; we can hire executives from other places, but it’s so much better if we can build them from within. With our China business — from 2010, when we launched there, to 2012 — we grew from $1 million to $3 million, and we didn’t have the right leader. I took who was running our outdoor business, Kevin Eskridge, and sent him to China at the end of 2012. He took over a $3 million business; in 2013, he did $7 million. In 2014, he did $30 million. In 2015, he came home and was replaced by Erick Haskell; we did roughly $80 million in 2015, and this year the plan is north of $160 million.
Talk about your new campus. What do you hope to achieve from the new home?
KP: The purpose of building this campus is to have an amazing place for my team and my company to grow. We have 600 or 700 people spread all over Baltimore in addition to the 1,700 or 1,800 at headquarters. Now, we’re able to move everybody into one building. [And] we could also be a center of energy to attract other great brands and bring things to this side of the city, which was old industrial land, and turn it into some- thing vibrant that’s a true live, work and play environment. The selection of this campus was critical; it has water on one side and I-95 on the other, where 225,000 cars drive by a day. We’re going to have a 100,000-sq.-ft. gym, our Hungry and Humble Café will be expanded, we’ll have fields and indoor basketball courts, and it will be anchored with a 100,000-plus-sq.-ft. store called Under Armour World that will be the ultimate destination for what people do when they want to see, feel and experience the brand.
Ten years from now, what do you hope Under Armour will look like?
KP: We’ll be the best player in this space; we’ll be the best player in sports footwear. Competition in our space [is] beatable, [and] I think innovation has not been at the cornerstone of sports. We’re going to push the envelope — and by us pushing so hard, it’ll make our competitors better, too, so I’m not predicting anyone’s going away — but Under Armour will be around for the long haul, and we’re going to keep running and fighting until we’re the No. 1 brand in the world. And then we’re just going to be where we’ll be comfortable, which is leading.
Update: Under Armour Announces Executive Changes
On Tuesday, Under Armour announced chief merchandising officer Henry Stafford would exit the firm in July, after six years with the company. Under Armour’s former chief marketing officer Kip Fulks will assume the chief merchandising officer responsibilities on an interim basis. Under Armour’s chief digital officer Robin Thurston will also be leave the company in July. Michael Lee, co-founder of Under Armour-acquired MyFitnessPal, will assume responsibility for the brand’s global digital operations.