No sports. Few open stores. And housebound consumers. What’s an athletic brand to do?
Some are pitching new ways to engage customers — and they are connecting. Yet others are swinging and missing.
Nike, for instance, has established itself as a leader during the coronavirus crisis. The Swoosh has earned consumer and insider trust with initiatives such as making its subscription-based fitness platforms free, which has encouraged people to stay active, while delivering inspirational messaging on social media.
However, its biggest competitor, Adidas, has tripped itself up with moves that brought it unfavorable headlines. The German giant has experienced controversies stemming from pushing to keep stores open when other brands heard the health warnings. And it used a local law meant to help those facing hardship in an attempt to defer rent payments.
With that in mind, FN ranks the efforts of five leading athletic companies, from first to worst.
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The coronavirus has created a feeling of unease worldwide, but if there is a bright spot amid the chaos, it’s the leadership shown by Nike. Both consumers and industry insiders have applauded the efforts of the athletic powerhouse as the health crisis has disrupted how the world lives, whether it’s for being proactive in the shuttering of stores or engaging with compelling social media efforts. Nike was early in closing its U.S. stores to help flatten the curve (doors closed March 16) and since has revealed inspirational messaging on social media that encouraged people to stay indoors, such as its “Play inside, play for the world” post on Instagram; has issued athletic challenges to consumers, like the Living Room Cup digital workout series; and has made its Training Club premium subscription app free to keep people active. Also, during its third-quarter earnings call on March 25, CEO John Donahoe stated the company is working with the Oregon Health & Science University to plan ways it can help. These plans included using its manufacturing facilities to prototype protective face shields for nurses and doctors treating those infected with the coronavirus. The company has also opened up its wallet to stop the spread of COVID-19. On March 18, Nike revealed it was making a donation of more than $15 million, which included $10 million in contributions from Phil Knight, co-founder and chairman emeritus; Mark Parker, former CEO and current executive chairman; and John Donahoe, the company’s new president and CEO.
The social media channels for the Boston-based brand have been relatively quiet since the coronavirus shut down the U.S., but the few times the brand has posted were impactful. On March 24, the company used its platforms to announce $2 million in nonprofit grants to support local, regional and global communities via the New Balance Foundation. The money was distributed to multiple organizations including No Kid Hungry, Good Shepherd Food Bank in Maine and several more in its network of more than 60 grantees. Three days later, New Balance announced it would make protective face mask prototypes in its Lawrence, Mass., manufacturing facility with an image of a mask and the phrase, “Made shoes yesterday. Making masks today.” The company also said it would soon scale production to its other New England factories. These efforts came a week after New Balance stated it was closing its office, factory and retail operations, effective March 16.
Under Armour was another brand that was quick to shutter stores temporarily to slow the spread of the coronavirus, with the closures starting March 16. Since then, the athletic company announced it would donate $2 million to nonprofits to support people affected by the coronavirus pandemic, which would be split between Feeding America and Good Sports, and has started manufacturing protective equipment from its Lighthouse innovation hub in Baltimore to support the health-care providers of the University of Maryland Medical System. For its consumers, Under Armour has activated its ambassadors to provide free workouts via social media and issued the “Healthy From Home” challenge using the MyFitnessPal to track activity. All of these efforts were well-received, and industry insiders believe this will earn the company goodwill with consumers when life returns to normal. However, like many brands and retailers, Under Armour has resorted to furloughs and pay cuts. The company revealed April 3 that it would temporarily lay off associates at its full-price and Factory House outlet stores, as well as roughly 600 people at its U.S.-based distribution centers, starting April 12. Also, Under Armour said its board of directors will take a 25% cut to their compensation and all EVP-level leaders and top executives will see a 25% reduction in their salaries.
Throughout the coronavirus crisis, Puma has kept to business as usual on its social media channels, showcasing new product and sharing viral videos. However, CEO Bjorn Gulden has used his personal Instagram account to share inspirational messages and images of his morning runs and workouts in Germany. One of the more notable photos was shared on March 19 with someone he encountered on a run, Adidas CEO Kasper Rørsted, with the caption, “I wish Kasper and all the adi people all the best in these difficult times! We are competitors … but still friends!” The shot received several positive comments, with some requesting the rivals stay fit together. “I love this!!! What a positive [message] in this challenging situation for both our companies. Would be great if you convinced Kaspar [to go] on a joint run @bjoern_gulden! #puma #adidas,” wrote Instagram user @geb.mar. The brand, however, did have to take measures to combat the sales hit the company has experienced, including its board members forfeiting their April salaries and senior managers having their salaries reduced by 25%.
As the coronavirus crisis escalated, Adidas launched its “#HomeTeam” campaign, which consists of athletes and creators offering workouts, advice and encouragement to keep its community of consumers engaged. Although it produced some fun social media moments, which included runner Lee Ryan completing a full marathon on a makeshift loop in his backyard, the athletic company has upset its consumers with several controversial decisions during this anxiety-ridden time. For instance, as its toughest competitors were closing stores, an alleged internal email leaked on March 16 that reportedly stated, “Closing down is easy, staying open in a healthy environment requires courage, persistence and focus,” which was widely criticized as tone-deaf and unsafe. The next day, Adidas responded by temporarily closing all directly owned Reebok and Adidas stores in Europe, the U.S. and Canada. And on March 30, the company’s decision to use Germany’s eviction freeze to defer rent payments on stores that are closed due to the coronavirus pandemic was lambasted by officials, which explained the protection was meant to help those facing financial hardship. The company apologized on April 1 in an open letter for its decision and stated it had paid its landlords for the month.