The business model of Under Armour
- Business Model Shifts
Physical and digital fitness in one experience
Under Armour is showcasing how seriously they are taking the digital shift by spending over $700 million on acquiring multiple fitness apps. Their main goal is to merge physical and digital fitness into one experience as can be seen in the Business model canvas of Under Armour below. The brand now has access to over 200 million registered users, which makes Under Armour one of the largest players in the digital health and fitness industry. Question is, how is the brand using their community to serve them better?
The start of Under Armour
In 1996, Kevin Plank was part of the football team of the University of Maryland. He identified himself as “the sweatiest guy on the team” and was often annoyed by the cotton t-shirts that “didn’t do the job”. Motivated by this frustration, he went on the quest to find the perfect sport shirt. By experimenting with different materials, he found out how to make a basic layer shirt out of moisture-wicking formfitting fabric. After testing the prototype t-shirt with his teammates, he decided to start his own business working from his grandmother’s basement.
From sports to digital player
Under Armour quickly gained market share and started competing with sportswear giants such as Nike and Adidas. Although Under Armour started in sports fashion, they quickly opted for a digital strategy to enhance the brand. In 2013, MapMyFitness was acquired, in a series of multiple acquisitions of fitness apps. Over the years also MyFitnessPal, and Endomondo were added to the list of purchases. In total Under Armour spent over $700 million to realize their digital strategy that until today seems to pay off.
During a keynote, founder and CEO Kevin Plank asked his audience if isn’t weird that we know more about our cars than we do about our well-being? “When we step into our car, we see how much gas it has, and when something needs to be fixed, we see a light signal. However, we don’t have these insights into your body and health.”
Therefore, Under Armour started using the app data of their 200+ million users to get better insights into their customer lifestyle with the goal to provide better products and services. For Under Armour this goes beyond athletic performances and stretches to all areas that influence health our such as sleep activity, nutrition and mental wellness.
First of all, the insights generated by the Under Armour Digital community are integrated in the design and production process. Resulting in new products that are developed based on their immense pool of data and therefore are proven to contribute to better results.
Second, by comparing all their customer data, they can give athletes personalized insights into their habits and performance results. Based on their data the brand knows that, for example, the average running shoes loses support after being used for more than 400 miles and that this increases the risk of injuries. Therefore, they inform the athletes with a push notification when it’s time to buy new shoes in order to stay on track and prevent injuries.
The Business model canvas of Under Armour
The next race
We will see more and more connected sportswear coming to the market in the upcoming years. Where we are currently using our smart phones and watches it’s likely that new technologies, such as chips in our clothing, will become part of our work outs. Therefore, there is a huge opportunity for Under Armour to claim this space and to deliver the best omni-channel athlete experience possible.
However, the vision of Under Armour isn’t about technology. It is about improving the lives of athletes. That’s why their ultimate goal is to combine all their apps into one health and fitness tracker and connect their app with all our devices. Because the more Under Armour knows about us and our health and fitness habits, the better Under Armour can help us to become better.
This case is part of the research for our upcoming book Business Model Shifts.
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