[sound of commercial] ﻿
Under Armour is one of the world’s most popular sports equipment companies.
Founded in 1966 by a college football player Kevin Plank,
the brand has since then remained an American favourite when it comes to sports apparel.
Currently, the brand's net worth is around $6.71 Billion USD,
giving competition to names like Nike and Adidas. Plank was only 24 when he came up with his brand’s
revolutionary new microfiber moisture-wicking fabric.
Through this, he turned sweat into a billion dollar business
that’s still up and running today. This is the story of Under Armour.
Chapter 1: The Billion Dollar Idea
[Kevin Plank]: "But whether a) you were sweating or b) you were pouring
water on your head to stay cool or whether it was raining outside,
there's nothing worse than that wet heavy feeling. That slow lethargic cotton t-shirt feeling."
Being an athlete himself, Kevin Plank would often soak through his sports attire,
resulting in him being weighed down during games.
As the captain of the University of Maryland football team,
he realized how seriously this sweat problem was affecting athletes.
He used this frustration to come up with T-shirts
made from special compression fabric that would remain dry
no matter how much one sweats. It took him a number of attempts and
quite a lot of money from his personal savings to get the formula right.
He spent around $17,000 dollars to manufacture 500 shirts which he then sold to his former
team-mates who were all playing for the NFL by that time.
Plank worked out of his grandmother’s basement and
used his connections in the sports industry to promote his T-shirts.
Throughout college, he managed to sell $20,000 dollars worth of T-shirts,
with athletes like Barry Bonds also becoming regular
customers of the brand that went on to be called ‘Under Armour’.
However, after the first year of selling T-shirts,
Plank went broke because of a lack of profits.
Then, he made his first sale to Georgia Tech for about $17,000.
Two dozen NFL teams soon followed suit.
At the end of his second year, he had sold $100,000 in product, hence helping the business take off.
Chapter 2: Strategizing
Plank’s initial business strategy was through word of mouth.
He wanted Under Armour to be exclusive to elites in the sports industry,
hence creating more hype around the brand. He started off by pitching his shirts to
sportsmen and if they were interested, Plank would send them free samples,
letting his product do all the talking. This is how he infiltrated into Georgia Tech,
with all of the team’s players switching over to Under Armour gear for their games.
They were followed by the Atlanta Falcons, the New York Giants and the Miami Dolphins.
The Dolphins specially helped Plank a lot because their match was televised on national tv,
which helped bring Under Armour out into the public.
And speaking of media attention, the brand reached a huge milestone when they were asked to design
uniforms for Oliver Stone’s iconic sports film ‘Any Given Sunday’.
This move actually helped the company’s sales to
grow nearly five times faster than the previous year, to $5 million.
Chapter 3: Branding After that, Plank heavily invested in advertising
and creating the right image for his brand. Under Armour launched its first national
campaign in December 1999 by spending $25,000 on a half-page ad in ESPN magazine to let
people know that the brand wasn’t just fictional.
[Kevin Plank]: "Our goal that we had with this first campaign was to create a movement.
Movements that are bigger than the 30 seconds that we can afford to buy on television.
You gotta remember, when you're competing against others you think about how to make $1 spend like $3.
How do you leverage? How do you make yourself much bigger than just that 30 seconds that you have on TV?"
Initially, they did their advertising in-house,
but then Plank brought external agencies on board to widen the brand’s horizons.
The marketing for Under Armour has been a huge part of the brand’s success.
All of its campaigns reflect the company’s core values,
which is something that the consumers appreciate. With their great products and a strong point
of view, Under Armour managed to build strong foundations with their brand.
Around 2002, around 2500 retail stores all over the States started carrying the brand,
head to head with the biggest names in the sportswear industry.
On November 18, 2005, Under Armour went public, trading at NASDAQ under “UARM” and became the
first U.S.-based initial public offering in five years to double on its first day of trading.
And only a few years later, the brand opened its own first retail store in Maryland,
helping sales skyrocket even further. With the launch of the brand’s footwear in 2009,
Under Armour created an even larger customer base.
The brand’s peak came in 2011 when they shed their ‘male-centric’ image through their ‘I
Will What I Want’ campaign that embraced female athletes as equal to their male counterparts,
instead of just an afterthought. They created practical sportswear for women
and marketed it as such, instead of trying gimmicks to win over their female fanbase.
This campaign featured women like Lindsey Vonn, Gisele Bundchen and Misty Copeland,
focusing on their strengths and how they overcame personal adversities.
This brilliant marketing strategy combined with quality female clothing
resulted in bigger sales in Under Armour’s North American women’s apparel division.
Chapter 4: Entering the Digital World
After the brand found a stable footing in the industry, they decided to expand
their name through digital innovation. After years of creating sweat-proof products,
Under Armour decided to put their knowledge of their customer base towards something new.
In 2013, they acquired three apps, including Map My Fitness,
for tracking health, fitness and nutrition, and turned themselves into a digital sports company.
Plank didn’t just go digital for the sake of it, instead he waited and strategized
to see whether this was a viable future plan for his company - and it worked!
The brand’s digital worked through connecting athletes’ devices and daily apparel, deciphering
the data, and providing actionable insights to produce better and healthier performers.
At the same time, the brand launched an internship program that made use
of social media for people to apply. The contest drew more than 10,000 inquiries and
over 5,000 applications on Facebook and Twitter. This was such a huge success that the brand
went on to conduct this ‘internship contest’ every year after that.
Chapter 5: What The Future Holds For Under Armour As of now, Under Armour has been in the sportswear
industry for over 21 years, with a steady revenue generation since its inception.
The brand currently has about 5,900 employees and makes over
$1.83 Billion dollars in yearly retail sales. Athletes like Tom Brady and Stephen Curry swear by
Under Armour’s sweat-proof apparel which has only helped the brand retain its relevance through its
products and smart advertising strategies. Plank managed to turn a small idea into a
billion dollar business by making sure that he delivered exactly what his customers wanted.
Through personal experience, he identified a problem that athletes
faced and worked towards solving it. Under Armour was only 2% the size of Nike
but has grown to 6% with the brand’s commitment to its customers.
As far as the future is concerned, Under Armour has managed to retain its brand identity
even during the rocky economic conditions of this year.
Of course, as a brand, Under Armour still has a long way to go.
But considering the way Plank has constantly managed to make his brand evolve through
innovation, it’s safe to say that his brand is here to stay for a long time.
What do you think of the brand’s success story? Let us know in the comments below.
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We’ll see you next time!