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NPD: Sports Apparel Brands Must Go ‘Digital First’ and Double Down on Brand Equity

The challenges facing sports brands and retailers during the coronavirus pandemic are not insurmountable, according to the NPD Group, but overcoming them will require investment in more than just liquidity.

NPD Group vice president and sports industry advisor Matt Powell recently tweeted out the market research firm’s latest sneaker sales statistics, revealing a 35 percent drop in sales—bad news for sports apparel.

Even that growth was better than expected, Powell wrote on Twitter, as sales figures were likely inflated by a non-comparable Jordan release, bad weather in 2019, the Easter shift and the influence of coronavirus stimulus checks.

In his latest Sneakernomics blog post, Powell said the industry must react to this market by investing in brand equity and a stronger connection with consumers.

“Sometimes brand equity might conflict with liquidity efforts, but we must not let this pandemic ruin the good names of our brands,” Powell said. “When making any decision during this crisis, the first question must always be, ‘Is it right for the brand?’ If the answer is ‘no,’ then move on.”

It’s time for brands and retailers to walk the walk, Powell wrote, and put the safety of consumers and workers at the top of the list of their priorities. Empathetic marketing and charitable donations can help with this, as well as enhanced loyalty programs to remind consumers that brands have their back during the crisis.

Adidas, for one, quickly pivoted to address consumers’ quarantine needs, acknowledging that many “have turned to running or had to step away” during recent weeks. In response, the company said its Adidas Running community has partnered with Facebook Mentorships “to create a virtual space for connection and support.”

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Though the partnership, announced on April 23, launched as a pilot, “our aim is to potentially build this out,” said Alberto Uncini Manganelli, general manager of Adidas Global Running, “scaling our impact where possible, as we know it is important to keep our minds and bodies healthy, today more than ever.”

Adidas, which also flexed its supply chain expertise to produce pandemic-essential PPE, has tapped “mindset coaches” including L.A.-based Christian Straka and New York City’s Ameerah Omar “to share their expertise in an even more intimate way.”

Nike, meanwhile, shared with consumers the behind-the-scenes “story of one team’s race to deliver protective equipment” to front-line healthcare workers in dire need of PPE. “Early morning on Friday, March 20, I got a call asking if I could pull a few people together,” Michael Donaghu, vice president of innovation, said, counting the first small steps of assembling a group to set face shield production in motion, just days after the Beaverton, Ore., company decided to shut down stores nationwide.

“We had just started encouraging our teams to telework, so I was calling people up and asking, ‘Hey, can you jump into a meeting? Can we dial you in? We need to get a team together and see what we can do,’” he added.

Baltimore’s Under Armour also raced to “manufacture and assemble face masks, face shields and specially equipped fanny packs” for the 28,000 health care providers and staff working in the University of Maryland Medical System. “When the call came in from our local medical providers for more masks, gowns and supply kits, we just went straight to work,” said Randy Harward, Under Armour’s senior vice president of Advanced Material and Manufacturing Innovation. “More than 50 Under Armour teammates from materials scientists to footwear and apparel designers from laboratories in Baltimore and Portland quickly came together in search of solutions.”

Charitable work and goodwill aside, NPD’s Powell says e-commerce is the primary channel through which sports-centric brands can forge empathetic connections for the time being, and stressed his belief that consumers will continue to move their purchases online as the pandemic subsides.

“Now is the time for brands and retailers to double down on their online business,” he said. “‘Digital first’ must be the mantra of retail now. Don’t rest on your laurels, as there is always room for improvement. Make your website the best it can be.”

Nike has taken this sentiment to heart, marking the 50th anniversary of Earth Day on April 22 by simplifying the process for consumers to search, shop for and learn about the sustainable features of the brand’s products. Beyond adding a “Shop Sustainable Materials” tab to the e-commerce navigation bar, Nike now distinguishes the product pages of its eco-friendly apparel and footwear merchandise with a Sunburst logo, designed by Nike’s first employee Jeff Johnson in 1974. Nike defines its sustainable products as those containing at least 50 percent recycled material or organic cotton by weight. A new “How This Was Made” feature on product pages dives into the production nitty-gritty behind each item, offering some transparency on the garment or shoes’ origins.

Powell also takes issue with the number of stores in the American retail landscape, lamenting that there were too many stores “selling the same stuff” before the pandemic. It may be time, he added, to “ruthlessly” confront the fact that retail is overstored. Although bankruptcies and mall closures may do some of this work for the industry, all of retail must address its holdings and embrace change, he added. Nike’s investment in experiential flagships and data-driven stores could insulate the brand from some of the store-closing carnage that will be all but inevitable in the months and years ahead.

Powell cautioned brands and retailers from valuing the opinion of politicians when making the decision to reopen stores, suggesting the industry rely on the customer to make the choice regarding when they’d like to return.

“Retailers can open their doors, but no amount of proclamations can force people to buy,” Powell said. “Thus far, early reads on reopening retail have been disappointing.”

“Season-less” goods or “markdown-proof” product is another false hope, he added.

“I totally understand the desire to improve margins and avoid more markdowns, but the truth is, ‘markdown proof’ or ‘season-less’ is another way of saying ‘boring,’ and boring retail can never succeed,” Powell said.