Plugging in to the Customer
I recently wrote about what sports clothing and accessories company Under Armour was doing right with its wearables and data collection. It’s no coincidence that last year Under Armour surpassed Adidas to become the second largest fitness brand in the world. They’ve built a unique, hyper-engaged community of digital users, creating brand loyalty and collecting priceless feedback into consumer preferences and market trends. Meanwhile, analysts note that one of Adidas’ major failures is that its German offices are out of touch with American trends and require far too much lead time to adapt to what’s next. This problem extends far beyond its corporate headquarters’ location or even time from concept to manufacturing.
Under Armour has embraced business and marketing technology and emerged as a brand that can achieve 20 percent annual growth. Partnering with multiple fitness apps, Under Armour became more than just a clothing manufacturer—and in the process leapfrogged an industry mainstay with a much longer pedigree. Bringing fitness apps into the fold of an apparel brand gave it unrivaled insight into market trends, which Adidas sorely lacks. Business transformation requires unconventional thinking and trust in the power of tech.
A more stark case is HTC—a brand which built a great product with its latest series of smartphones, but still watched its global market share dwindle. Industry experts note that the M7 model, which was marketed with a campaign of Robert Downey Jr. commercials, grew the brand’s market share to 10.7 percent in the second quarter of 2011. Its successor, the M8, was reviewed by phone experts to be a better product than the M7, but HTC did not support the phone with a commensurate ad campaign. The brand watched its market share fall to below two percent. Even though HTC built great products, it didn’t tell a convincing story or engage users the way successful smartphone brands like Samsung and Apple do. There wasn’t anything sustainable about how HTC connected with its customers.
A Plot Twist
Interestingly, it was announced earlier this year that HTC is teaming up with Under Armour to leverage each of the brands’ respective areas of expertise. HTC saw remarkably high market share for a small brand at the height of its success—an obvious testament to its quality products—but saw that market share plummet when it forgot that smartphones don’t sell themselves. The same software and brand gurus that so impressed Under Armour also caught HTC’s attention. The partnership promises big things for both brands; Under Armour can maximize its software potential with tailor-made hardware instead of piggybacking on existing fitness wearables, and HTC will immediately enter a dialogue with over 130 million active users. One brand can now offer devices that answer the requests of its ardent users, while the other can finally inform eager users that its products are great, if only they knew about them.
Using data the right way can make all the difference when it comes to building a healthy brand. Understanding what customers want and how to give it to them can make the difference between a business that succeeds and one that fails. Adidas’ slip proves that brand reputation alone cannot maintain market share. Under Armour’s atmospheric rise underlines the incredible growth potential of brands that embrace technology and use it to quickly meet market demand. HTC demonstrated that great products don’t always sell themselves, especially in hyper-competitive tech sectors. But, with its new strategic partnership with Under Armour, we have a front row seat to an intriguing transformation of a company that promises big things.
From these brands’ successes and failures, we can learn that reaction speed and business storytelling are essential components of successful companies. When it comes to business transformation, it’s all about having a conversation. Listening to customers and telling them your story in the right way is a recipe for success. Anything less than healthy dialogue will spell disaster.
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About the AuthorMore Content by John Montesi