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Will The Under Armour I WILL Campaign Kill Nike?

02/13/2013
Slugging It Out

Slugging It Out

Nike is famously known for its “Just Do It” slogan that has driven much of Nike’s advertising and marketing over the years.

Ten years ago, performance apparel upstart Under Armour, challenged athletes of all stripes to “Protect This House”. Yesterday CEO and Founder Kevin Plank announced the launch of the UA’s “I Will” global campaign – which is essentially an athlete’s response to the “protect this house” challenge.

The two brands have been slugging it out for a decade…and UA is clearly gaining on Nike.

In fact, Under Armour has posted 10 consecutive quarters of 20%-plus year-over-year sales growth. In a soft economy those numbers are eye-popping.

The domestic sports apparel market according to our estimates is approximately $50 billion. Under Armour’s market share has increased to nearly 3% from 0.6% in 2003, while Nike’s share has roughly stayed flat at 7% over that period. As UA’s brand recognition increases in the U.S. and as they continue to innovate and enter new apparel segments, their market share should continue to steadily increase.

For UA to really compete with Nike the company must nail the footwear segment.

Under Armour started selling footwear in 2006 and since then the contribution of this segment has steadily grown to 12% of sales. The company estimates that the addressable footwear market is $26.4 billion, of which they currently only have $200 million in sales, or 0.7% market share. Nike, on the other hand, has domestic footwear sales of $6 billion.

This segment is still in its nascent stage for UA and if successful, can mean significant growth for the company. Whether or not the company is successful in this segment will depend on the brand’s appeal to consumers.

It will take more than slogans, campaigns and high-profile athletes for UA to kill Nike. UA must play to win in Nike’s house – footwear. To get anywhere near Nike’s $6 billion in footwear sales will require Under Armour hitting on all cylinders – product development, sourcing, design, distribution, etc. Marketing alone will not make it happen.

If UA makes a better shoe, will I buy it? I will.

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One Comment leave one →
  1. Juetta permalink
    02/13/2013 11:09 am

    Of course I love this article–very interesting.

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