Under Armour And The Future Of Fitness

Data are increasingly becoming the most important asset in the world. Everything that we do in every facet of our lives is being recorded in some database somewhere. Data scientists then tend to use the collected data to draw patterns, inferences, and generalizations about people and their choices regarding just about anything. Such algorithms have now found their way into fitness as well. Nowadays, there are apps and tools that have the ability to collect vital data while you exercise. This data is then analysed to help you understand your progress, while giving you suggestions and advice. In other words, technology now has the ability to steer us towards physical improvement. Since earlier this decade, Under Armour (NYSE:UA) has found itself at the forefront of this revolution. 

The company has clearly understood the importance of implementing technology within its products and has always been somewhat of a pioneer when it comes to connected fitness technology. For instance, its performance apparel business is built on a technologically superior fabric that does not absorb sweat when the wearer starts to perspire. However, the retailer is working towards taking things a step further. It has always been targeting a smart apparel option that incorporates electronic functions and data gathering capabilities into the fabric. According to CEO, Kevin Plank, there will be 50 billion retail items with a connected chip by 2020. Plank wants the company to be at the forefront of the apparel side of that trend—i.e., a leader with apparel that can read biometrics. It is quite likely that the company’s leadership in the performance apparel market and its strong connection with its current user base can help it achieve those targets.

The company’s first connected fitness acquisition was in 2013 when it purchased MapMyFitness at a price of $150 million. Soon after, Under Armour concluded an additional $560 million deal with MyFitnessPal and Endomondo. However, the company didn’t lay the groundwork for its connected fitness business until 2015, when it created a digital fitness community across its four mobile platforms: UA Record, MapMyFitness, Endomondo and MyFitnessPal.

Early last year, the company released its first connected fitness portfolio at the Consumer Electronics Show in Las Vegas. Plank introduced the UA HealthBox, which includes a Bluetooth-enabled scale, a heart rate monitor and a band for the wrist that tracks steps, distance, resting heart rate and sleep. Furthermore, the company announced the release of its connected shoes, called the SpeedForm Gemini 2. The shoe has a chip in the heel to track your pace, stride and distance. All of the data collected from these products are recorded on UA Record. This data is then studied by the app to give you a detailed analysis about your workout.

So far, the company has witnessed great participation on the apps. A report from ARC (the research wing of the digital testing company Applause) found that the Under Armour apps faired significantly better than Nike and Fitbit in user sentiment. Additionally, the Under Armour Record app, MyFitnessPal app, MapMyFitness app, and Endomondo app scored much better than the fitness category average. Furthermore, the company recorded more than 190 million registered users (the year end goal) on its Connected Fitness platform by mid Q4. This is great news for a company that has taken a gamble to change their business model to include technology in their products at a very nascent stage in a still-developing market.

All said and done, it seems likely that Under Armour is moving in the right direction. With increased internet penetration, cheaper smartphone prices, and an emerging health wave, Kevin Plank seems to have positioned his company to tap into a very nascent market that could make or break Under Armour.

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